Rm-1/97

Reference no.:
Rm-1/97
Objavljeno:
Official Gazette RS, no. 40/97 and OdlUS VI, 86 | 05.06.1997
ECLI:
ECLI:SI:USRS:1997:Rm.1.97
Act:
Ratification of the Europe Agreement Establishing an Association between the Republic of Slovenia, of the one part, and the European Communities (hereinafter: the Community) and their Member States, Acting within the Framework of the European Union, of the other part (hereinafter: the ESP)
Operative provisions:
I. Upon the request of the Government in the procedure of ratification of the Europe Agreement Establishing an Association between the Republic of Slovenia, of the one part, and the European Communities (hereinafter: the Community) and their Member States, Acting within the Framework of the European Union, of the other part (hereinafter: the ESP), the Constitutional Court herby pronounces its opinion concerning the conformity of provisions of clauses 7.b and 7.c of article 45 and Annex XIII in reference with paragraph 2 of article 64 of the ESP with the Constitution. II. The provision of clause 7b of article 45 of the ESP, according to which subsidiaries of Community companies shall have the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities for which they are established, is not in disagreement with the Constitution in so far as subsidiary of Community company shall be deemed to be a company established, registered and operating on the territory of Slovenia and in accordance with the law of the Republic of Slovenia. III. The provision of clause 7c of article 45 of the ESP, according to which Slovenia shall grant to Community nationals and branches of Community companies the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities, is, in so far as the right to acquire and sell real property refers to land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution). IV. The provision of clause I of Annex XIII to the ESP, according to which Slovenia shall take the measures necessary to allow the citizens of the Member States of the European Union, on a reciprocal basis, the right to purchase real property on a non-discriminatory basis, is, in so far as the right to purchase real property refers to the purchase of land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution). V. The provision of clause II of Annex XIII to the ESP, according to which Slovenia shall grant to the citizens of the EU Member States, having permanently resided on the present territory of the Republic of Slovenia for a period of three years, on a reciprocal basis, the right to purchase real property, is, in so far as the right to purchase real property refers to land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution). VI. The provision of clause II of Annex XIII to the ESP is not in disagreement with the provision of the Constitution according to which foreigners shall, in accordance with international agreements, enjoy all those rights which are guaranteed by the Constitution, with the exception of those rights which only citizens of Slovenia may enjoy pursuant to the Constitution or the law (article 13 of the Constitution), nor in disagreement with the provision of the Constitution according to which in Slovenia each individual shall be guaranteed equal human rights and fundamental freedoms irrespective of national origin, race, sex, language, religion, political or other belief, financial status, birth, education, social status or whatever other personal circumstance (paragraph 1 of article 14 of the Constitution), in so far as interpreted in the sense that the citizens of the Member States of the European Union shall have the right to purchase real property in Slovenia under conditions equal to those applying to the citizens of the Republic of Slovenia. VII. Competent State body may not approve any such commitment of the Republic of Slovenia under international law as would be in disagreement with the Constitution. A commitment under international law would be in disagreement with the Constitution if, by the coming into force of an international agreement, it created directly applicable unconstitutional norms in internal law, or if it bound the State to adopt any such instrument of internal law as would be in disagreement with the Constitution. By passing a law on ratification of the ESP, the Republic of Slovenia would bind itself to adopt legal instruments which would guarantee the rights contained in the provisions of the ESP mentioned in items III, IV and V of this Opinion. The most important legal instrument which the Republic of Slovenia would bind itself to adopt would be an enabling statute for amending the applicable constitutional provision according to which foreigners may not acquire title to land (paragraph 2 of article 68 of the Constitution).
Abstract:
I. Upon the request of the Government in the procedure of ratification of the Europe Agreement Establishing an Association between the Republic of Slovenia, of the one part, and the European Communities (hereinafter: the Community) and their Member States, Acting within the Framework of the European Union, of the other part (hereinafter: the ESP), the Constitutional Court herby pronounces its opinion concerning the conformity of provisions of clauses 7.b and 7.c of article 45 and Annex XIII in reference with paragraph 2 of article 64 of the ESP with the Constitution.

II. The provision of clause 7b of article 45 of the ESP, according to which subsidiaries of Community companies shall have the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities for which they are established, is not in disagreement with the Constitution in so far as subsidiary of Community company shall be deemed to be a company established, registered and operating on the territory of Slovenia and in accordance with the law of the Republic of Slovenia.

III. The provision of clause 7c of article 45 of the ESP, according to which Slovenia shall grant to Community nationals and branches of Community companies the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities, is, in so far as the right to acquire and sell real property refers to land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution).

IV. The provision of clause I of Annex XIII to the ESP, according to which Slovenia shall take the measures necessary to allow the citizens of the Member States of the European Union, on a reciprocal basis, the right to purchase real property on a non-discriminatory basis, is, in so far as the right to purchase real property refers to the purchase of land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution).

V. The provision of clause II of Annex XIII to the ESP, according to which Slovenia shall grant to the citizens of the EU Member States, having permanently resided on the present territory of the Republic of Slovenia for a period of three years, on a reciprocal basis, the right to purchase real property, is, in so far as the right to purchase real property refers to land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution).

VI. The provision of clause II of Annex XIII to the ESP is not in disagreement with the provision of the Constitution according to which foreigners shall, in accordance with international agreements, enjoy all those rights which are guaranteed by the Constitution, with the exception of those rights which only citizens of Slovenia may enjoy pursuant to the Constitution or the law (article 13 of the Constitution), nor in disagreement with the provision of the Constitution according to which in Slovenia each individual shall be guaranteed equal human rights and fundamental freedoms irrespective of national origin, race, sex, language, religion, political or other belief, financial status, birth, education, social status or whatever other personal circumstance (paragraph 1 of article 14 of the Constitution), in so far as interpreted in the sense that the citizens of the Member States of the European Union shall have the right to purchase real property in Slovenia under conditions equal to those applying to the citizens of the Republic of Slovenia.

VII. Competent State body may not approve any such commitment of the Republic of Slovenia under international law as would be in disagreement with the Constitution. A commitment under international law would be in disagreement with the Constitution if, by the coming into force of an international agreement, it created directly applicable unconstitutional norms in internal law, or if it bound the State to adopt any such instrument of internal law as would be in disagreement with the Constitution.

By passing a law on ratification of the ESP, the Republic of Slovenia would bind itself to adopt legal instruments which would guarantee the rights contained in the provisions of the ESP mentioned in items III, IV and V of this Opinion. The most important legal instrument which the Republic of Slovenia would bind itself to adopt would be an enabling statute for amending the applicable constitutional provision according to which foreigners may not acquire title to land (paragraph 2 of article 68 of the Constitution).
Password:
Property right, protection of.
Property right of foreigners.
Rights of foreigners.
Discrimination.
Reciprocity.
Equality before the law.
International agreement, direct application of.
Ratification.
Jurisdiction of the Constitutional Court to engage in preventive review of conformity of an international agreement with the Constitution.
International law, transformation of international law into internal law.
Constitutional Court, opinion concerning constitutional review of an international agreement.
Dissenting opinion of a judge of the Constitutional Court.
Concurring opinion of a judge of the Constitutional Court.
Legal basis:
Constitution, articles 1, 2, 8, 13, 14, 67, 68, 69, 70, 71, 86, 107, 153, indent 1 of paragraph 1 of article 160, paragraph 1 of article 160, paragraph 2 of article 160, articles 168, 169, 170. Vienna Convention on Contract Law, articles 1, 2, 7, 19, 20, 26, 27, 46.
Constitutional Court Act (ZUstS), articles 23, 24, 30, 49, 70.
Document in PDF:
The full text:
Rm-1/97
5.6.1997

D E C I S I O N

At the meeting of 5 June 1997 concerning the procedure for the evaluation of constitutionality of an international agreement commenced upon the request of the Government of the Republic of Slovenia, the Constitutional Court on the basis of paragraph 2 of article 160 of the Constitution and article 70 of Constitutional Court Act (Official Gazette of RS, No. 15/94) pronounced the following opinion:

I. Upon the request of the Government in the procedure of ratification of the Europe Agreement Establishing an Association between the Republic of Slovenia, of the one part, and the European Communities (hereinafter: the Community) and their Member States, Acting within the Framework of the European Union, of the other part (hereinafter: the ESP), the Constitutional Court herby pronounces its opinion concerning the conformity of provisions of clauses 7.b and 7.c of article 45 and Annex XIII in reference with paragraph 2 of article 64 of the ESP with the Constitution.

II. The provision of clause 7b of article 45 of the ESP, according to which subsidiaries of Community companies shall have the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities for which they are established, is not in disagreement with the Constitution in so far as subsidiary of Community company shall be deemed to be a company established, registered and operating on the territory of Slovenia and in accordance with the law of the Republic of Slovenia.

III. The provision of clause 7c of article 45 of the ESP, according to which Slovenia shall grant to Community nationals and branches of Community companies the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities, is, in so far as the right to acquire and sell real property refers to land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution).

IV. The provision of clause I of Annex XIII to the ESP, according to which Slovenia shall take the measures necessary to allow the citizens of the Member States of the European Union, on a reciprocal basis, the right to purchase real property on a non-discriminatory basis, is, in so far as the right to purchase real property refers to the purchase of land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution).

V. The provision of clause II of Annex XIII to the ESP, according to which Slovenia shall grant to the citizens of the EU Member States, having permanently resided on the present territory of the Republic of Slovenia for a period of three years, on a reciprocal basis, the right to purchase real property, is, in so far as the right to purchase real property refers to land, in disagreement with the provision of the Constitution according to which foreigners may not acquire title to land except by inheritance subject to reciprocity (paragraph 2 of article 68 of the Constitution).

VI. The provision of clause II of Annex XIII to the ESP is not in disagreement with the provision of the Constitution according to which foreigners shall, in accordance with international agreements, enjoy all those rights which are guaranteed by the Constitution, with the exception of those rights which only citizens of Slovenia may enjoy pursuant to the Constitution or the law (article 13 of the Constitution), nor in disagreement with the provision of the Constitution according to which in Slovenia each individual shall be guaranteed equal human rights and fundamental freedoms irrespective of national origin, race, sex, language, religion, political or other belief, financial status, birth, education, social status or whatever other personal circumstance (paragraph 1 of article 14 of the Constitution), in so far as interpreted in the sense that the citizens of the Member States of the European Union shall have the right to purchase real property in Slovenia under conditions equal to those applying to the citizens of the Republic of Slovenia.

VII. Competent State body may not approve any such commitment of the Republic of Slovenia under international law as would be in disagreement with the Constitution. A commitment under international law would be in disagreement with the Constitution if, by the coming into force of an international agreement, it created directly applicable unconstitutional norms in internal law, or if it bound the State to adopt any such instrument of internal law as would be in disagreement with the Constitution.

By passing a law on ratification of the ESP, the Republic of Slovenia would bind itself to adopt legal instruments which would guarantee the rights contained in the provisions of the ESP mentioned in items III, IV and V of this Opinion. The most important legal instrument which the Republic of Slovenia would bind itself to adopt would be an enabling statute for amending the applicable constitutional provision according to which foreigners may not acquire title to land (paragraph 2 of article 68 of the Constitution).

R e a s o n s :

A.

I. Procedure

1. The Government on 15.5.1997 filed a request for the evaluation of constitutionality of some provisions of the ESP.

On 20.5.1997, the Government, upon the request of reporting judge, supplemented the request and submitted texts of association agreements of other countries, abstracts concerning the regulating of property right in some other countries and explanations concerning the envisaged modification of normative regulation with respect to the provisions of the ESP.

On 22.5.1997, the Government submitted resolutions of the Madrid Summit of the Council of Europe.

On 28.5.1997, the Chair of International Law Sciences of the Law School of Ljubljana submitted an opinion concerning international law and constitutional aspects of the ratification of the ESP.

On 20.5.1997, the National Assembly, upon the request of reporting judge, submitted the positions and resolutions concerning the relations between the Republic of Slovenia and the European Union, Italy and Nato adopted at the session of 11.4.1996, and a legal opinion of the Secretariat for Legislative and Legal Matters concerning the conformity of Annex XIII of the ESP with positions and resolutions of the National Assembly of 11.4.1996.

2. The Constitutional Court fist considered the request at its meeting of 22.5.1997 and deferred its decision concerning the request. At its meeting of 5.6.1997, the Constitutional Court reached a decision concerning the request. The Opinion was publicly announced at 2 p.m. of the same day together with the presentation of the basic reasons for such decision of the Constitutional Court. The disposition of the Opinion was on the occasion of public announcement delivered to representatives of the National Assembly and the Government.

II. Proposal on the part of the Government

3. The Government proposes to the Constitutional Court to pronounce an opinion, based on paragraph 2 of article 160 of the Constitution and article 70 of Constitutional Court Act (hereinafter: "the ZUstS") concerning the conformity of provisions of clauses 7.b and 7.c of article 45 and of Annex XIII in reference with paragraph 2 of article 64 of the ESP with the Constitution. The Government considers that the Agreement is not in conflict with the Constitution. The Government also asks a fundamental question of whether it is constitutionally admissible to ratify the Agreement, which also includes the commitment of the Republic of Slovenia to amend the Constitution.

III. Legal system of the Europe Agreement Establishing an Association

1. European Union

4. European Communities designate three fundamental treaties1, which correspond with the idea of their creation - to establish organizations which will endeavour, though their institutional structure and on the basis of real solidarity to give Europe an identity and personality which former organizations were unable to provide. The Member States mutually agreed that, from then on, they would deem some of their competencies as matters of common interest in which operation in the framework of the organization or through it would be more effective and profitable as it would have been if they performed them each by itself.2 The European Union Treaty3 introduced some changes in the institutional structure and changes which should serve as the basis for economic, monetary and also political union.

According to the provision of article 238 of the Treaty, the Community may conclude with one or more countries or international organizations association agreements introducing reciprocal rights and obligations, joint activities or special procedures.

The European Community initially offered negotiations concerning association to three countries of East Europe which fulfilled certain "fundamental conditions with regard to democracy and market economy". Negotiations with these first countries, to whom associate membership was offered (Czech Republic, Hungary and Poland) started in August 1990 and lasted approx. one year.4 As distinguished from other association agreements of the European Community, agreements with the said three former communist countries were concluded in December 1991, and were referred to as "Europe Agreements". These are agreements of "the second generation", whose aim is to widen the scope of former bilateral trade and cooperation agreements. The structure of agreements is similar, but their specific subject matters differ in accordance with the requirements of each several country.

Subsequent agreements were signed by Romania in December 1992 and Bulgaria in February 1993.

2. Procedure of association in the case of Slovenia

5. On 28.3.1995, the Government considered and supported the motion for concluding the Association Agreement.

On 5.4.1995, the motion was adopted at the joint meeting of the Committee for International Relations and the Committee for the Economy of the National Assembly.

On 11.5.1995, the Government considered and adopted a special Report on technical talks.

On 15.6.1995, the heads of negotiation delegations initialled the text of the Agreement.

On 27.10.1995, the Government considered and adopted a draft program of integration into the European Union.

On 6.6.1996, the Government considered and approved a report on negotiations.

On 11.4.1996, the National Assembly adopted positions and resolutions concerning the relations of the Republic of Slovenia with the European Union, Italy and Nato. According to clause 2 of the said resolutions, the National Assembly authorized the Government to sign the ESP on the basis of the positions of the European Union expressed in the resolutions of the Madrid Summit of the Council of Europe and the resolutions of the European Parliament.

On 10.6.1996, the ESP was signed.

On 24.10.1996, the European Parliament ratified the ESP.

On 17.4.1997, the Government considered and adopted the Bill on ratification of the ESP.

3. Subject matter of the ESP

6. With the coming into force of the ESP, association relationship would be established between the Community and its Member States, of the one part, and Slovenia, of the other part. The aims of the said association relationship are defined in clause 2 of article 1 of the ESP, and they are as follows: 1) to provide an appropriate framework for political dialogue, allowing the development of close political relations between the Parties; 2) to promote the expansion of trade and harmonious economic relations between the Parties and so foster dynamic economic development and prosperity in Slovenia; 3) gradually to develop a free trade area covering virtually all trade between the Community and Slovenia; 4) to support Slovenia's efforts to develop its economy and to complete the transition into a market economy; 5) to provide an appropriate framework for Slovenia's gradual integration into the European Union. To this end, Slovenia shall work towards fulfilling the necessary conditions. The ESP consists of the text of the Agreement, 16 Annexes designated I to XIII, and 7 Protocols. The text of the Agreement comprises 132 articles of this Agreement, which include: political dialogue (articles 4 to 7), free movement of goods (articles 8 to 37), movement of labour, right of establishment and delivery of services (articles 38 to 61), payments, capital, competition and other economic issues, and approximation of legislation (article 62 to 72), economic cooperation (articles 73 to 97), prevention of illegal activities (article 98), cultural cooperation (article 99), financial cooperation (articles 100 to 106), provisions relating to Osimo Agreements and economic cooperation between Slovenia and Italy (articles 107 to 109), and institutional, general and final provisions (articles 110 to 132).

7. According to the provision of article 126 of the ESP, Annexes and protocols shall form an integral part of the ESP. Annexes either make operational particular provisions of the ESP, or represent concessions of one or the other Party. The role of concessions is also in that the acquisition of particular rights is on their basis excluded from national treatment, and that the application of national treatment in connection with these is postponed for a certain period of time. Among the Annexes, three relate to the right of establishment: Annex IX a, which specifies the sectors, to which the transitional period applies (articles 45 and 52), Annex IX b, which specifies the sectors not included in this right (article 45), and Annex IX c, which deals with financial services. According to the provisions of Annex IX b, the sectors which are excluded are: organization of games of chance, betting and lotteries and other similar activities, trading and acting as agents in connection with cultural and historic monuments and buildings, and nature reserves. Annex IX c deals with financial services in reference with which, in accordance with clause 2 of article 48 of the ESP, a State party to the Agreement may take specific protective measures and ensure the integrity and stability of the financial system. Annex XIII concerns the exchange of letters concerning article 64 of the ESP and relates to the right to purchase real property. Protocols concern textile products and articles of clothing, the products dealt with by the Treaty establishing the European Coal and Steel Community, the trade between Slovenia and the Community in processed agricultural products, the definition of the term "originating products" and the ways of administrative cooperation, mutual assistance between administrative authorities in customs matters, and concessions with annual limitations. A special protocol amends the ESP.

8. According to the provision of clause 1 of article 3 of the ESP, the Association shall include a transitional period of a maximum duration of six years divided into two successive stages, the first in principle lasting four years, the second two. The first stage shall begin upon the entry into force of this Agreement. According to the provision of clause 2 of this article, the Association Council shall regularly examine the application of this Agreement. This is a body established under article 110 of the ESP. It shall meet once a year at ministerial level, and whenever dictated by circumstances. It also examines all important questions arising from this Agreement and all other bilateral and international questions of mutual interest.

According to the provision of article 111 of the ESP, the Association Council shall be composed of members of the Council of the European Union and members of the Commission of the European Communities, of the one part, and members of the Government of Slovenia, of the other part. According to the provision of clause 1 of article 113 of the ESP, each of the two parties may refer to the Association Council any dispute relating to the application or interpretation of this Agreement. According to clause 2 of this article, the Association Council may settle the dispute by means of a decision. If this is not possible, either Party may, in accordance with clause 4 of this article, notify the other of the appointment of an arbitrator; the other Party must then appoint a second arbitrator within two months. The Association Council shall appoint a third arbitrator. The arbitrators's decisions shall be taken by majority vote. Each party to the dispute must take the steps required to implement the decision of the arbitrators.

9. According to the provision of article 123 of the ESP, the Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. They shall see to it that the objectives set out in this Agreement are attained.

According to the provision of article 127 of the ESP, this Agreement is concluded for an unlimited period. Either Party may denounce it by notifying the other Party. This Agreement shall cease to apply six months after the date of such notification.

4. Controversial provisions of the ESP

10. 1) article 45 of the ESP

7. "Notwithstanding the provisions of this article: a) (...)

b) subsidiaries of Community companies shall also have the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities for which they are established.

c) Slovenia shall grant the rights under (b) to Community nationals and branches of Community companies by the end of the first stage of the transitional period."

2) Annex XIII to the ESP

"A. Letter from the Government of the Republic of Slovenia Sir,

Concerning the provisions5 of article 64(2) of the Association Agreement relating to the Community rules on the movement of capital, and in view of Slovenia's accession to the European Union, I would like to confirm the following commitment of the Government of the Republic of Slovenia:

I. to take the measures necessary to allow the citizens of the Member States of the European Union, on a reciprocal basis, the right to purchase real property in Slovenia on a non- discriminatory basis by the end of the fourth year from the entry into force of the Association Agreement;

II. to grant to the citizens of the EU Member States, having permanently resided on the present territory of the Republic of Slovenia for a period of three years, on a reciprocal basis, the right to purchase real property from the entry into force of the Association Agreement.

I would be grateful if you could confirm the agreement of the European Communities to the above.

For the Government of the Republic of Slovenia"

"B. Letter from the European Community and its Member States I have the honour to acknowledge the receipt of your letter concerning the provisions of article 64(2) of the Association Agreement relating to Community rules on the movement of capital, which reads as follows:

(content of the letter)

The EC and its Member States have the honour to confirm their agreement with the commitment taken in this letter, on a reciprocal basis, by your Government.

On behalf of the European Community and its Member States".

B.

I. Jurisdiction of the Constitutional Court

11. Paragraph 2 of article 160 of the Constitution reads: "At the instigation of the President of the Republic, of the Government or of no less than one third of the Deputies of the National Assembly, the Constitutional Court shall provide an opinion as to the conformity of an international agreement in the process of being adopted by the State, with the Constitution. The National Assembly shall be bound by any such opinion of the Constitutional Court."

By the said provision, the Constitutional Court has been vested, in addition to the powers specified in paragraph 1 of article 160 of the Constitution, with a special power of prior (a priori) constitutional review of international agreements6.

12. In our constitutional system, international agreements rank above statutory provisions in the hierarchy of legal acts.

According to the provision of article 8 of the Constitution, statutes and other legislative measures shall accord with international agreements which bind Slovenia. According to the provision of paragraph 2 of article 153 of the Constitution, statutes must conform with international agreements currently in force and adopted by the National Assembly, and regulations and other legislative measures must also conform with other ratified international agreements. To actually ensure such conformity, the constitutioner in indent 2 of paragraph 1 of article 160 of the Constitution laid down the jurisdiction of the Constitutional Court to decide upon the conformity of statutes, regulations and by-laws with international agreements adopted by the State. Thus, in the hierarchy of legal acts in Slovenia, international agreements rank above statutory provisions. Our legal system, however, does not recognize the primacy of international law over constitutional provisions.7

13. According to the provision of indent 1 of paragraph 1 of article 160 of the Constitution8, the Constitutional Court is empowered to decide upon the conformity of a law on ratification of an international agreement with the Constitution. If in the process of such assessment the Constitutional Court should find that a provision of international law is in conflict with the Constitution, it may abrogate the law on ratification of the said agreement, but such decision of the Constitutional Court has effect only in internal legal system. Such decision does not have any effect on the obligation of the State under international law, which in such a case remains unchanged. The aim of this empowerment is (as in the case of evaluation of other statutes) to eliminate unconstitutional legal norms from the internal law of the Republic of Slovenia; if this occurs after the coming into force of an international agreement, this leads to the violation of obligations of the Republic of Slovenia arising from international law. In the instant case, the Constitutional Court did not take a position concerning the question of whether the possibility for reviewing the constitutionality of a ratification agreement exists right from the coming into force of the same, that is, prior to the coming into force of the international agreement (as practised by the Federal Constitutional Court in Germany) - whether, then, the empowerment to subject to review a ratification agreement, in the case if such review is carried out subsequent to the coming into force of the law on ratification and prior to the exchange of ratification instruments, also has preventive aim, namely to promptly prevent the undertaking of an unconstitutional obligation arising from international law by the Republic of Slovenia. Neither did it take a position on whether it is in the case of subjecting to constitutional review a law on ratification relevant whether the international agreement contains directly applicable legal norms9.

There is no doubt that prior subjecting to constitutional review of an international agreement in the process of being adopted (paragraph 2 of article 160 of the Constitution) has a preventive aim. Its aim is to prevent the concluding of an international agreement the coming into force of which would introduce unconstitutional norms10 in the internal law, or for the fulfilment of which such legal instruments of internal law would be necessary as would be in conflict with the Constitution. The aim of preventive review is to promptly prevent the State from failure to comply with international obligations which have been undertaken, because of their disagreement with constitutional provisions.11

14. The Government considers that the ESP is not in conflict with the Constitution, substantiating this by claiming that the Agreement will not yet become effective at the moment of the coming into force of the law on ratification, and that it will also not yet become effective after it will have been approved by the Parliaments of all Member States, if by that time Slovenian Constitution should still not be amended. This is why the Government proposes that, at the time of ratification, the National Assembly should adopt a declaratory statement. In this it should be laid down that the National Assembly interprets the controversial provisions of the ESP in the sense that "for the Republic of Slovenia, the obligations shall start to apply after the completion of the procedure of amendment of paragraph 2 of article 68 of the Constitution or, within the time limits set in the Association Agreement itself, but in no case prior to the coming into force, under international law, of the Association Agreement.".

The Secretariat for Legislative and Legal Matters of the National Assembly considers that Annex XIII to the ESP will become binding only in the sense of the commitment that Slovenia will in the future take certain measures and ensure certain rights relating to transactions with real property. This is why, in accordance with the legal opinion of the Secretariat of the National Assembly, the mere act of ratification does not make the subject matter of Annex XIII contrary to the Constitution, for the content itself of the commitment will not become effective until the expiry of the time periods specified in Annex XIII and in articles 131 and 132 of the ESP; from then onward, it would be unconstitutional only if the constitutional provisions should not be changed so as to make possible the carrying out of the commitment under Annex XIII of the ESP.

15. According to the provision of paragraph 2 of article 160 of the Constitution, the Constitutional Court is not empowered either to review a proposed law on ratification, or to review any such declaratory statements as may be adopted by the National Assembly on the occasion of the ratification. Subject to review are only provisions of an international agreement which is itself in the process of being ratified - that is, of an agreement which has not been ratified yet. The Constitutional Court must pronounce an opinion concerning the conformity of the object being reviewed with the Constitution. An opinion of the Constitutional Court, issued in accordance with the provision of paragraph 2 of article 160 of the Constitution, is not consultative opinion. Regardless of a different designation, what is involved is a decision of the Constitutional Court whose legal character is, with respect to its effects, identical with other decisions of the Constitutional Court. It differs from decisions in that it cannot be used by the Constitutional Court in a manner which will interfere with the international agreement itself, so as it can interfere with acts of internal law - which are abrogated retrospectively or prospectively whenever a nonconformity has been identified. In the case of assessing the conformity of an international agreement with the Constitution, also, the Constitutional Court acts as a State body governed by internal law. This is exactly why the Constitutional Court will carry out a review of an international agreement from the viewpoint of its conformity with the Constitution, but not also from the viewpoint of international law. Opinion concerning the conformity with the Constitution as established, however, does not bind just the National Assembly but, to an equal degree, with regard to the scope of and the reasons for the review, it also binds the Constitutional Court itself - and thus has the effect of a matter adjudged (res iudicata).12

16. A proposal for the evaluation of constitutionality can only be filed by three petitioners who are defined as such by the Constitution, the President of the Republic, the Government or one third of the Deputies of the National Assembly. It can be lodged only during the ratification procedure, that is, at the time when an international agreement has been signed already and after a proposed law on ratification has been submitted for consideration but has not been adopted yet by the National Assembly. As the Constitution provides that the National Assembly shall be bound by any such opinion of the Constitutional Court, the National Assembly can, after a motion for constitutional review has been filed, decide concerning the ratification only after the opinion of the Constitutional Court has been delivered to it.

17. The Constitutional Court evaluates the conformity of provisions of an international agreement with the Constitution at the time of reaching the decision, and regardless of when (if at all) the agreement will become effective.

Article 8 of the Constitution provides that proclaimed and ratified international agreements shall apply directly. From the viewpoint of international law, ratification is unilateral declaration of intention of one contracting party addressed to the other contracting party, to the effect that it accepts the content of a signed agreement as binding. Such declaration of intention is delivered by the State on the occasion of exchanging instruments of ratification. According to the provision of indent 5 of article 107 of the Constitution, such instruments are published by the President of the Republic.

However, the President of the Republic may publish such instrument of ratification after the National Assembly ha passed the law on ratification of an international agreement. The instrument of ratification is an international act, and the law on ratification is an act under internal law, whose importance is twofold.13 On the one hand, it is a sort of authorization14 granted to the President of the Republic, allowing him to publish an instrument of ratification and, on the other hand, it is a normative act by which obligations under international law are transformed into internal law of the State under the above mentioned conditions in accordance with provisions of article 8, article 86 and paragraph 2 of article 153 of the Constitution.

18. Thus, provisions of an international agreement are integrated in the internal legal system of the Republic of Slovenia with the coming into force of such agreement on condition that they have been ratified in accordance with the internal law of the Republic of Slovenia. By an international agreement, rights and obligations are created for the State.

When the international agreement has been approved by the law on ratification, it can create rights and obligations also for natural and legal persons in the country if its provisions are by their nature such that they make this possible (in the case of the so called "self-executing treaty")15.

19. By international agreements, the Republic of Slovenia binds itself as a State in relation to other parties to the agreements, these being other States or subjects of international public law. By international agreement, Slovenia undertakes international obligations to which international law applies. Concluding and implementing of international agreements is manly regulated by the Vienna Convention on Contract Law (Official Gazette of SFRY, No. 30/72 - hereinafter: "the MDKPP"), which is also binding upon Slovenia. The same in article 7 defines when, from the viewpoint of international law, an individual should be deemed to be State representative authorized to accept or authenticate the text of an agreement or express the consent of the State to the effect that the agreement is binding upon it.16 According to the provision of clause 2.a of the said article of the MDKPP, heads of States, prime ministers and minister of foreign affairs shall be deemed, without the need to present appropriate authorization, to be representatives of their respective State on the basis of their office - which applies to all instruments connected with the concluding of an agreement.

20. An obligation undertaken on the basis of an international agreement binds the State to also fulfil such obligation.

According to the provision of article 26 of the MDKPP, each applicable agreement shall bind its parties, and they must fulfil it in good faith (bona fide). The principle of pacta sunt servanda is one of the fundamental principles of international contract law.17 According to the provision of article 27 of the said Convention, a particular Member State may not invoke its internal law in justifying the non-fulfilment of an agreement, unless this be admissible under article 46 of this Convention.

Article 46, however, concerns exclusively the violation of internal law in reference with authorization for concluding an agreement and may be used by the State whenever claiming that an approval is faulty, if an essential rule of internal law has been manifestly violated. If the fulfilling of an international obligation requires the passing or amending of corresponding normative rule, which should apply in internal legal system, then, the State is in accordance with international law obliged is such a way also to fulfil the said obligation. Failure to fulfil an obligation constitutes a violation of the agreement - that is, it constitutes a breach of international law.18.

The fulfilment of an international agrement can be realized already by the fact that its provisions pass directly into the internal legal system of the State at the time of the coming into force of such agreement. Such fulfilment takes place in the case if an international agreement has been ratified in accordance with the internal legal system of the Republic of Slovenia and if its provisions are, in the nature of the matter, directly applicable (self-executing treaties), for they regulate the rights and obligations of natural and legal persons.

However, if the provisions are not directly applicable, it is necessary, with a view to fulfilling contactual obligations, for appropriate measures to be taken by internal law - the adopting of appropriate legal instruments. From the viewpoint of international law, it is essential that the State fulfil an international obligation, but it is not of importance in what way such fulfilment has been effected (through direct application of provisions of the international agreement in internal law or by the adoption of the necessary instruments of internal law); the manner of fulfilment would only be of relevance to international law in the case if this is expressly provided by the international agreement.19

21. On the basis of the said starting points, the Constitutional Court evaluated the motion of the Government for the evaluation of conformity of provisions of the ESP with the Constitution. In this respect, the Constitutional Court, bearing in mind the assertions made in the motion, in the process of evaluation, for below stated reasons, confined itself to those provisions of the ESP in connection with which there is doubt as to their conformity with the Constitution. And such are the provisions of clauses 7 b and c of article 45 of the ESP, and the provisions of clauses I and II of Annex XIII in reference with paragraph 2 of article 64 of the ESP.

22. According to the provision of paragraph 1 of article 162 of the Constitution, the procedure of the Constitutional Court shall be regulated by statute. Constitutional Court Act (hereinafter: "the ZUstS") in article 70 repeats the first part of the provision of paragraph 2 of article 160 of the Constitution, which defines the jurisdiction of the Constitutional Court, and adds a rule according to which the Constitutional Court shall reach its opinion in camera. The ZUstS does not contain any other explicit procedural provisions concerning the pronouncement of opinion. This is why it is necessary, in line with the provision of article 49 of the ZUstS, in reference with the procedure of pronouncing the opinion, to apply on mutatis mutandis basis the provisions of Section IV of this statute, which regulates the procedure and the reaching of decisions by the Constitutional Court in reference with the evaluation of constitutionality and legality of laws, regulations and general acts issued for the exercise of public powers. In the procedure for the evaluation of constitutionality of a law or regulation, the Constitutional Court evaluates the conformity of those provisions of the law or regulation which are claimed to be non-conforming by an initiator under article 24 of the ZUstS or petitioner under article 23 of the ZUstS. In this connection, the Constitutional Court may not ex officio extend its evaluation of

constitutionality to provisions which are not being disputed, unless it is allowed to do so by the provision of article 30 of the ZUstS. This empowers the Constitutional Court also to evaluate the constitutionality and legality of other provisions of this or some other law, regulation or general act issued for the exercise of public powers, whose constitutionality or legality have not been challenged, if such provisions are mutually connected or if this is absolutely necessary to resolve the case. In the case of pronouncement of opinion, no reasons exist for holding another view.20 The Constitutional Court evaluates only those provisions of an international agreement which are claimed by the petitioner to be controversial, and it will only evaluate other provisions under the conditions specified in article 30 in connection with article 49 of the ZUstS.

II. Evaluation of constitutionality of controversial provisions of the ESP

1. Real property transactions as a right of subsidiaries of companies (clause 7b of article 45 of the ESP)

23. The Constitutional Court evaluated the provision of clause 7.b of article 45 of the ESP from the viewpoint of conformity of the same with provisions of paragraphs 1 and 2 of article 68 of the Constitution, which read as follows:

"Foreigners may only acquire title to real property under such conditions as are determined by statute.

Foreigners may not acquire title to land except by inheritance subject to reciprocity." (article 68)21

According to the provision of clause 1ii of article 45 of the ESP, Slovenia shall, during the transitional period referred to in article 3, facilitate the setting-up of operations on its territory by Community companies and nationals. To that end, it shall grant, from the entry into force of this Agreement as regards the operation of subsidiaries and branches of Community companies in Slovenia, once established, treatment no less favourable than that accorded to its own companies and branches or to any Slovenian subsidiary and branch of any third country company, whichever is the better. According to the provision of clause 7.b of article 45, and having regard to the provisions of this article, the subsidiaries of Community companies shall also have the right to acquire and sell real property and, as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights are necessary for the conduct of the economic activities for which they are established. The meaning of the term subsidiary for the purposes of the ESP is given in clause b of article 47, according to which "subsidiary" of a company shall mean a company which is effectively controlled by the first company. This definition, then, does not include the definition of subsidiary with regard to legal status. For the evaluation of this provision, however, it is important whether, from the viewpoint of internal law, this is domestic or foreign legal person. If this were a foreign company, also with respect to this provision, there would continue to be in existence reasons for considering the same to be in disagreement with the provision of paragraph 2 of article 68 of the Constitution.

24. Having regard to the provision of clause 1ii of article 45, from the viewpoint of legal status, such company could be defined as a company whose capital is under the control of a foreign company, but established, registered on the territory of Slovenia and operating in accordance with the rules of the law of the Republic of Slovenia. This is why it is possible to consider such a company to be a company under domestic law, which is why the share of foreign capital in it, and the question of who is the one with effective control over its operations is unimportant for its status. As legal person under domestic law, such company can enjoy all the rights enjoyed by our other legal persons under the same conditions as are prescribed for all domestic legal persons. As regards the right to own real property and as regards natural resources, agricultural land and forestry, these conditions are defined from the viewpoint of constitutional law in particular by provisions of article 67 (the manner in which property is acquired and enjoyed shall be regulated by statute so as to ensure the economic, social and environmental benefits of such property; the manner in which property may be inherited, as well as the conditions under which it may be inherited, shall be determined by statute), article 69 (land and property affixed to land may be compulsorily acquired, or ownership thereof may be limited by the State in the public interest and subject to a right to such compensation in kind or monetary compensation from the State as shall be determined by statute), paragraph 2 of article 70 (the conditions governing the exploitation of natural resources shall be determined by statute), and paragraphs 1 and 2 of article 71 (for reasons of effective exploitation, special conditions for land use shall be prescribed by statute; agricultural land shall be afforded special protection by statute).22

25. Having regard to the foregoing, the provision of clause 7b of article 45 of the ESP is not in conflict with the Constitution in so far as interpreted in accordance with preceding paragraph hereof.

26. At this point, however, one should immediately point out that it will in no way be possible for regulation by statute in accordance with the above mentioned constitutional provisions to introduce discriminatory treatment of citizens of Member States of the European Union outside the regulatory framework allowed by the provisions of the ESP.23 Approval of an international agreement on the part of the Parliament and the consequent ratification in the form of exchange of instruments of ratification for the State means that it has ultimately undertaken the obligations arising from the international agreement. For Slovenia, this would mean the granting of national treatment to citizens, companies and enterprises of Member States of the European Union on the territory of Slovenia on the basis of the principle of non-discrimination and subject to reciprocity. Thus it would be impossible for any subsequent piece of legislation to limit the rights of such foreigners in comparison with the rights of citizens of the Republic of Slovenia. Also by the so called "protective legislation" or, more precisely, domestic laws passed on the basis of article 67 and other of the above mentioned articles of the Constitution, by which Slovenia would prescribe the manner in which property is acquired and enjoyed so as to ensure the economic, social and environmental benefits of such property, it would not be possible to change the undertaking of Slovenia to ensure such rights of foreigners as are granted by the ESP.

2. Real property transactions as a right of citizens of Members States of the European Union and branches (of companies) in reference with the conduct of economic activities (clause 7c of article 45 of the ESP)

27. The Constitutional Court evaluated the provision of clause 7.c of article 45 of the ESP from the viewpoint of its conformity with provisions of paragraphs 1 and 2 of article 68 and paragraph 3 of article 70 of the Constitution, which read as follows:

"Foreigners may only acquire title to real property under such conditions as are determined by statute.

Foreigners may not acquire title to land except by inheritance subject to reciprocity." (article 68)

"The rights of foreigners to exploit natural resources, and the conditions under which any such exploitation may take place, may only be determined by statute." (paragraph 3 of article 70).

According to clause 7c of article 45 of the ESP, Slovenia shall grant the rights under (b) to Community nationals and branches of Community companies by the end of the first stage of the transitional period. The rights under (b) include: 1) the right to acquire and sell real property and, 2) as regards natural resources, agricultural land and forestry, the same rights as enjoyed by Slovenian nationals and companies, where these rights, that is, the rights under 1) and 2) are necessary for the conduct of the economic activities of nationals of Members States of the Community or branches of Community companies.

Nationals of Member States of the Community in the Republic of Slovenia are foreigners. A branch of a company for the purposes of the ESP is defined in clause c of article 47 as a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension. The branch of a company, then, is, from the viewpoint of legal status, an integral part of Community company established in one of the Member States of the Community - from the viewpoint of Slovenia, abroad. Thus, the branch, in spite of being an independent business entity, is an integral part of a foreign legal person who is the sole holder of rights and obligations also in legal transactions.

According to the said provision, then, Slovenia must grant the right to acquire and sell real property to the foreign legal person.

28. In so far as "the right to acquire real property" under clause 7c of article 45 of the ESP applies to land, the said right is in conflict with the provision of paragraph 2 of article 68 of the Constitution. In so far as the said right applies to the acquisition of title to other real property, the said provision is not in conflict with paragraph 1 of article 68 of the Constitution, for the latter provides that the conditions for its acquisition shall be regulated by statute. The Enabling Statute for the Implementation of the Constitution in fact provides in paragraph 1 of article 9 that, prior to the enactment of article 68 of the Constitution, foreigners may not acquire the right to own property affixed to land. But this provision by itself does not present obstacle under constitutional law, for it prohibits the acquisition of title to real property other than land only until the time of the adoption of statutory provisions in accordance with paragraph 1 of article 68 of the Constitution.

29. Paragraph 3 of article 70 of the Constitution leaves it for the legislator to determine whether foreign persons may exploit natural resources. The provision of clause 7c of article 45 of the ESP is thus not in conflict with the said constitutional provision in so far as applying to the ensuring of the right of foreign natural and legal persons to exploit natural resources for the purpose of conducting economic activity.

3.Real property transactions as a right of nationals of Members States of the European Union (Annex XIII in reference with paragraph 2 of article 64 of the ESP)

30. The Constitutional Court evaluated Annex XIII in reference with paragraph 2 of article 64 of the ESP from the viewpoint of its conformity with provisions of article 13, paragraph 1 of article 14 and paragraph 2 of article 68 of the Constitution, which read as follows:

"Foreigners shall, in accordance with international agreements, enjoy all those rights which are guaranteed by the Constitution and by the law, with the exception of those rights which only citizens of Slovenia may enjoy pursuant to the Constitution or the law." (article 13 of the Constitution)

"In Slovenia each individual shall be guaranteed equal human rights and fundamental freedoms irrespective of national origin, race, sex, language, religion, political or other belief, financial status, birth, education, social status or whatever other personal circumstance." (paragraph 1 of article 14 of the Constitution)

"Foreigners may only acquire title to real property under such conditions as are determined by statute.

Foreigners may not acquire title to land except by inheritance subject to reciprocity." (article 68).

According to the provision of article 126 of the ESP, Annex XIII forms an integral part of this Agreement. The said Annex is in the form of exchange of letters between the Government of the Republic of Slovenia and the Community and its Member States, that is, an exchange of letters between parties to the ESP. By ratification of the ESP, clauses I and II of Annex XIII would become, in accordance with article 126 of the ESP, an integral part of international obligations, which would bind Slovenia, on this basis, to fulfil them. According to the provision of clause I of Annex XIII, Slovenia would bind itself to take the measures necessary to allow the citizens of the Member States of the European Union, on a reciprocal basis, the right to purchase real property in Slovenia on a non-discriminatory basis24 by the end of the fourth year from the entry into force of this Agreement. In reference with this provision, also, the conclusion is the same as in the case of the provisions of clause 7c of article 45 of the ESP, namely, that it is in conflict with the provision of article 68 of the Constitution in so far as the said right refers to the acquisition of title to land. In so far as the acquisition of title to other real property is concerned, the finding is the same as that in item 28 hereof. Article 121 of the ESP provides that "in the fields covered by this Agreement (...) the arrangements applied by Slovenia in respect of the Community shall not give rise to any discrimination between the Members States, their nationals or its companies or firms". The said principle of non- discriminatory basis" or of "national treatment" (namely, a treatment of nationals and companies of Members States of the Community which is no less favourable than that accorded to own citizens and companies), while at the same time taking into consideration the "subject to reciprocity" condition, also binds the European Union in the treating of Slovenian nationals, companies and firms.

31. According to the provision of clause II of Annex XIII, Slovenia shall grant to the citizens of the EU Member States, having permanently resided on the present territory of the Republic of Slovenia for a period of three years, on a reciprocal basis, the right to purchase real property from the entry into force of the ESP. This provision is, already for the above mentioned reasons, in conflict with paragraph 2 of article 68 of the Constitution.

32. The Constitutional Court also examined whether this provision is in conformity with paragraph 1 of article 14 of the Constitution. As the provision of clause II of Annex XIII does not make reference to the principle of non-discrimination, the question arises of whether, according to the said provision, Slovenia would be under the obligation to grant the nationals of Member States of the European Union the right to purchase real property even under more favourable conditions than those applying to its own citizens. The omission of the principle of non-discrimination in clause II of Annex XIII does not imply this; with respect to foreign persons, Slovenia may in its laws and regulations set the same conditions (within the framework of regulating the manner of acquisition of property right within the context of economic, social and environmental benefits of such property) regarding the purchase of real property as apply to its own citizens, without in this way infringing the said provision. For this reason, this provision is not in conflict with article 13 and paragraph 1 of article 14 of the Constitution.

33. Through the provisions of clause 7 of article 45 and of Annex XIII, then, Slovenia would undertake obligations of legal character in as far as their content is concerned. Through them Slovenia would undertake to adopt all legal instruments which are necessary to ensure their effective application. Slovenia would be bound to do so both on the basis of international law, more specifically, of the provisions of the MDKPP, and on the basis of provisions of the ESP (article 123). As it would be necessary, in this context, to modify also the provision of paragraph 2 of article 68 of the Constitution, the undertaking of such obligation is, for the reasons stated hereinafter, in disagreement with the Constitution. The provision of clause 7.c of article 45 and the provisions of clauses I and II of Annex XIII in reference with paragraph 2 of article 64 of the ESP, then, are, to the extent mentioned above, in disagreement with the Constitution.

III. Prohibition of any such commitment of the State under international law as is not in conformity with the Constitution

34. The petitioner points out that the basic question is whether the State is allowed through the law on ratification of this Agreement also to undertake to modify the Constitution. In this connection the petitioner considers this is inadmissible only in the case if the adoption of ratification agreement would affect prejudicially the subsequent modifying of the Constitution. In the instant case, however, such obligation is allegedly not involved.

35. The National Assembly may not approve the ratifying of an international agreement by which the State would undertake, on the basis of authorization on the part of the former, to fulfil a commitment under international law, in spite of being aware that, at the time of deciding concerning the approval (according to constitutional terminology, during the procedure of ratification as the approval of an agreement in accordance with domestic law), it is in disagreement with the Constitution.

What would be involved in this case would be a decision of the National Assembly which would, to a certain extent, affect prejudicially the decision on the part of the constitutioner, or would place the former in much the same position as the latter.

Ratification of an agreement in the field of international law means that the State has undertaken such obligations as are set down in the agreement. From the viewpoint of international law, such legal obligations as have been undertaken will be in existence as obligations of the State, and in this reference the State cannot and will not be able to invoke in its aid the fact that is not in a position to modify a thing because it has not managed to modify its Constitution. Such arguments may have effect in the context of domestic law, but their effect in international law is nil. From the viewpoint of assessment of constitutionality of the said provisions with respect to the provision of paragraph 2 of article 160 of the Constitution, it is thus also immaterial whether these provisions are directly applicable; as is also immaterial the envisaged time of the coming into force of these provisions.

36. By ratification of any such international agreement as would require constitutional amendment for the same to be fulfilled, the responsibility in the case of violation of any obligation undertaken under international law would be transferred to the constitutioner, and this is inadmissible. According to the provision of article 86 of the Constitution, the National Assembly shall enact laws and make other decisions and shall authorize adherence to international agreements by the vote of a majority of those Deputies present and voting, save where otherwise stipulated by the Constitution or by statute.

According to the provision of paragraph 2 of article 168 of the Constitution, in the procedure for amending the Constitution any such proposal for commencing the procedure for amending the Constitution shall first be decided by the vote of a two-thirds majority of those Deputies who are present. According to the provision of article 169 of the Constitution, the National Assembly may only enact legislation to amend the Constitution upon the vote of a two-thirds majority of all elected Deputies.

The mere fact that the National Assembly could (for, in accordance with the provision of article 86 of the Constitution, the National Assembly may only vote on a matter if a majority of its Deputies are present at the time the vote is taken - that is, 46 Deputies - which means that a decision can be taken by 24 votes or, in the case of abstention, of even less votes) on the basis of less than a third of votes of all Deputies indirectly bind the constitutioner, whose decisions are reached by a two- thirds majority of votes of all Deputies, speaks against constitutional admissibility of such commitment. In addition to this, in accordance with the provision of article 170 of the Constitution, any proposal for the amendment of the Constitution must be presented to the electorate at a referendum if the same is demanded by no less than thirty Deputies.

37. According to article 1 of the Constitution, Slovenia is a democratic republic and a state governed by the rule of law (article 2 of the Constitution). Slovenia enacted its Constitution on the basis of the Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia and the fact that we Slovenians created our own national identity and attained our nationhood based on the protection of human rights and freedoms, on the fundamental and permanent right of the Slovenian people to self-determination and as a result of our historical and centuries-long struggle for the liberation of our people (Preamble to the Constitution). On this basis and on such grounds it is admissible for the Constitution to be amended in accordance with the procedure specifically set down in Part IX of the Constitution. The procedure for amending the Constitution is on the one hand especially demanding legal procedure and, on the other hand, a procedure subject to the need for legitimacy. And the latter is provided by democratic and public execution of it, which should not be encumbered by any threat that the constitutioner might commit a violation of international law if the procedure were not brought to a successful completion by the same. Precisely for this reason, the constitutioner also instituted the institute of prior review of constitutionality of an international agreement, before the latter has been ratified. If competent authorities who, in accordance with the provision of paragraph 2 of article 160 of the Constitution, may file a motion for the evaluation of conformity of an international agreement in the process of being adopted, with the Constitution, fail to do so, and if the National Assembly - in spite of any such instances of disagreement with the Constitution as may exist - approves the ratification of such agreement, the responsibility with regard to the violation under international law rests with the National Assembly. However, if competent authorities ask for prior evaluation of constitutionality of the international agreement, then, the responsibility for the above mentioned conformity with of the foundations of the Constitutions rests with the Constitutional Court. This is why the finding of the latter, that individual provisions of the international agreement are in disagreement with the Constitution, can only have the concurrent effect of prohibition of ratification of such provisions of the agreement (if with respect to these reservation cannot be applied).

38. Paragraph 2 of article 160 of the Constitution places the public interest, for the State not to commit itself under international law to fulfil obligations which are not in conformity with its Constitution, at the level of a constitutional value. The respect for such public interest, which can also be described as international reputation or credibility of the State (who complies with the principle of pacta sunt servanda and fulfils, in good faith, the obligations undertaken by international agreements) cannot be, as is claimed by the petitioner, exclusively an object of political responsibility of the holders of power with regard to the electorate, for the respect for it should also be deemed to be a question of conformity with the Constitution. The principle of execution in good faith of an international agreement also applies to Europe Association Agreements and requires that provisions of the international agreement be implemented regardless of any obstacles presented by rules of domestic law.

In this respect, a contracting party cannot invoke the constitutional provisions of substantive law. The contracting party must assert the right to extensions of time and exclusion from national treatment during the negotiations, but not later than by the time of exchanging the instruments of ratification of the agreement, in the form of reservations, in our case through actual formulation of articles of the basic text, or via Annexes to the basic text or to Protocols, whose content will have the effect of reservation in the sense of the MDKPP. If Slovenia wanted to obtain from the other contracting party additional concessions, which exceed those arrived at during the negotiations prior to the signing of the agreement, it should express these in the form of additional reservations. A reservation, according to international law, is "a unilateral statement drawn up or pronounced at any time, which a State gives when signing, ratifying, adopting or approving an agreement, or acceding to it, and by which it desires to exclude or modify the legal effect of individual contractual provisions when these apply to it" (clause 1.d of article 2 of the MDKPP).

However, in such a case the question would arise of legal possibility of a reservation under article 19 of the said Convention, and the key question of a probability that such reservation would be accepted by the other contracting party in accordance with article 20 of the MDKPP. Thus, if subsequent to the signing of the ESP and the approving of the same on the basis of enacting a law on ratification, Slovenia made any further reservation or reservations which would not be accepted by the other contracting party, this could, at most, start a new round of negotiations.

39. The part of the provision of article 160 of the Constitution which makes the opinion binding also specifies the legal effects of such opinion. When the Constitutional Court has pronounced its opinion, that an international agreement is not in conformity with the Constitution, it is the National Assembly who should decide, on the basis of political assessment, concerning the passing of the law on ratification. When, on the other hand, the Constitutional Court has pronounced its opinion, that individual provisions of an international agreement are in conflict with law, the effect of such decision is as follows: 1) if the agreement can be ratified subject to reservations, the National Assembly may only ratify it on condition that, with regard to the provisions concerning which an opinion on their non-conformity has been pronounced, the State has made reservations25; 2) if such reservations are not admitted by the agreement, or if they are not permitted under the provisions of the MDKPP, the National Assembly may not - having regard to the constitutional system in force - ratify such international agreement. In each case, however, competent authorities may also start a new round of negotiations concerning the object of the agreement. The said interpretation of this part of the provision of article 160 of the Constitution is confirmed also by the aim of prior review of constitutionality of an international agreement - which is to prevent the State from undertaking any such obligations under international law as are in disagreement with the Constitution. In the case of identifying an instance of non-conformity, and if reservations are not admissible, such aim can only be realized by modifying, prior to ratification, that constitutional provision which presents the obstacle of non- conformity with respect to individual provisions of the international agreement. If appropriate constitutional amendments have not been made, the National Assembly may not ratify the international agreement.26 In each case, the decision of the Constitutional Court has effect in internal law - its opinion is binding for the National Assembly, but in the area of international law such decision does not have any effect.

40. If the National Assembly approved the ratification of an agreement whose provisions would not be in conformity with the Constitution, obligations would arise for the Republic of Slovenia which would necessitate the amending of the Constitution itself. The power of the Constitutional Court to carry out prior review of constitutionality of an international agreement has the aim of preventing the undertaking of such obligations. This power, then, can be understood as a safeguard against the occurrence of unconstitutional norms in internal law of the Republic of Slovenia, as well as against the occurrence of such obligations under international law as the Republic of Slovenia would not be able to fulfil in the framework of the constitutional system in force for reasons arising from its internal law.

C.

41. This Opinion was pronounced by the Constitutional Court in the following composition: Dr. Lovro Šturm, President, and Dr. Peter Jambrek, Dr. Tone Jerovšek, Matevž Krivic, M.L., Janez Snoj, M.L., Franc Testen, Dr. Lojze Ude and Dr. Boštjan M. Zupančič, the judges. Items I and III to VII were adopted with seven votes in their favour and one against them. Vote against was cast by judge Krivic, who will prepare a dissenting opinion. Item II was adopted with six votes in its favour and two against it. Votes against were cast by judges Jerovšek and Krivic, who will prepare dissenting opinions. Concurring opinions will be prepared by judges Jambrek and Ude.


P r e s i d e n t
Dr. Lovro Šturm


Notes:
1The European Coal and Steel Community - the Treaty on the establishing of the same was signed in Paris on 18.4.1951 and came into effect on 25.7.1952. (Europe of six countries - FRG, Belgium, France, Italy, Netherlands and Luxembourg).
The European Atomic Energy Community and the European Economic Community - the Treaties on their establishing were signed on 25.3.1957 in Rome.
On the basis of accession agreement, which was signed on 22.1.1973 and came into effect on 1.1.1974, Great Britain, Denmark and Ireland acceded to the Community.
The Europe of nine States became the Europe of twelve States with the accession of Greece (signed on 28.5.1979 and came into effect on 1.1.1981) and Spain and Portugal (signed on 12.6.1985 and came into effect on 1.1.1986). Austria, Finland and Sweden became members in 1996.
2Source: Jean Boulois: Droit institutionnel des communautes europeennes, 4ume edition, Montchrestien, Paris, 1993, p. 46. 3The European Union Treaty was signed in Maastricht on 9.2.1992.
4Already during initial negotiations, protectionist interests of Member States of the European Community and of acceding States were being harmonized: "Only when Hungary and Poland embarrassed the Community by threatening to abandon the negotiations, and when Vaclav Havel warned against 'right-wing authoritarian and nationalist forces' which would take advantage of the break-down of negotiations" (Source: Desmond Dinan, Ever Closer Union, London, MacMillan, 1994, pp.473-482, more specifically p. 478), the negotiations were resumed and ended in compromise solutions as contained either in provisions of the basic text or in reservations set down in Annexes to the basic text, which are an integral part of corresponding Europe Agreements.
5Paragraph 2 of article 64 of the ESP reads as follows: "By the end of the fourth year from the entry into force of this Agreement, the Association Council shall examine ways of enabling Community rules on the movement of capital to be applied in full.".
6 1. In the legal area of Western Europe, such power is also held by France and Spain.
Article 54 of the French Constitution provides: "If, following a request of the President of the Republic, Prime Minister President of either House of the Parliament or a request of sixty members of parliament or sixty senators, the Constitutional Council (Conseil Constitutionnel) has established that an international agreement contains such provisions as are in conflict with the Constitution, authorization of ratification or approval of the agreement concerned may only be given after the amending of the Constitution.".
Article 95 of the Spanish Constitution provides:
"(1) The concluding of an international agreement which includes such obligations as are in conflict with the Constitution shall be subject to prior constitutional review.
(2) The Government or either of the Houses may ask the Constitutional Court to find whether any such conflict is in existence.".
2. Constitutional Courts of other countries carry out constitutional review with respect to international agreements within the framework of their general power of review of conformity with the Constitution of laws, this being either prior review (the effect of which, where a law on approval is concerned, has similar effects as prior review of a contract, for, before a law on approval has come into effect, there can be no ratification), or subsequent review of constitutionality of a law (which only has effects within the framework of domestic law).
According to the law of Federal Republic of Germany (sources:
Maunz - During, Grundgesetz, C.H. Beck, Munchen, 1994, Bonner Kommentar, 1982; Pestalozza: Verfassungsprozessrecht, C.H.Beck, Munchen, 1991), the Federal Constitutional Court does not have jurisdiction to review the constitutionality of international agreements. It only has jurisdiction (articles 93 and 100 of the Constitution) to subject to constitutional review the laws by which the legislator has approved the ratification of an international agreement (the so called "Zustimmungsgesetz"). The Federal Constitutional Court has established a practice of subjecting to constitutional review such laws in the period after the passing of the same, even though the international agreement has not become effective yet. The reason for such practice is that, after the ratification, the State can no longer avoid the international consequences of abrogation of a law on approval (BVerfGE, 1, 396).
The Constitutional Court may assess formal conformity of a law with the Constitution, but substantive (material) assessment is in the opinion of commentators possible only in the case of laws for the approval of international agreements which contain directly applicable legal norms (norms which regulate the rights and obligations of entities subject to internal law and which can be applied, for example by court, directly).
From substantive (material) viewpoint, the object of review are provisions of an international agreement incorporated by "Zustimmungsgesetz" into the internal law of the Federal Republic of Germany; the Constitutional Court evaluates whether the legislator had the right to approve the ratification of an agreement of such content.
7In the opinion of some French theoreticians of constitutional law, in countries in which norms of international law are not at a hierarchical level above constitutional norms, there is a relationship of coexistence between these two types of norms.
Thus, between these norms, the question of hierarchy of legal norms cannot even be posed. Review of constitutionality of an international agreement is not carried out from the viewpoint of constitutional norms - that is, the norms of internal law.
Source: L.Favoreu and L.Philip: Les grandes decisions du Conseil constitutionnel, 7ume edition, Sirey, Paris, 1993, p. 813.
8 1. The institute of prior review of constitutionality of an agreement does not exclude the institute of subsequent review of constitutionality. In so far as review of the same agreement by the application of both institutes is concerned, within the limits of review as already effected, the rule of res iudicata should be observed.
This also applies in France.
On the basis of paragraph 2 of article 62 of the French Constitution (general provision concerning the jurisdiction of the Constitutional Council to review the constitutionality of a law), the Constitutional Court is empowered to decide on: 1) a law granting authorization for ratification, or on ratification of an international agreement (example: decision no. 78-93 D.C. of 29.4.1978, in which the Constitutional Council decided concerning the constitutionality of a law on approval of an increase in the share of France in the International Monetary Fund,
2) whether the Constitutional Court has jurisdiction to review an international agreement which has already come into force, by reviewing a law by which the application of the agreement in domestic legal system has been effected via, for example, determining the consequences for the budget (example: decision no. 78-89 D.C. of 30.12.1977, when the Constitutional Council reviewed the text of 1978 Finance Act). Source: P.Gaoa: Le Conseil constitutionnel et l'insertion des engagements internationaux dans l'ordre juridique interne, Economica, Presses Universitaires d'Aix - Marseille, 1991, p. 80. 2. Before the French Constitutional Council, in 1992 thrice a proceeding was initiated for review of constitutionality of the Maastricht European Union Treaty. On the first occasion, the Constitutional Council assessed the conformity with the Constitution of the Treaty on the basis of a request by the President of the Republic, in accordance with the provision of article 54 of the French Constitution, and found some of its provisions to be in disagreement with the Constitution. On the second occasion, it assessed the constitutionality of the Treaty following the amending of the Constitution on the basis of a petition of a certain number of members of the Senate, in accordance with article 54 of the French Constitution. Within the framework of this review it assessed the conformity of provisions of the Treaty with the newly adopted provisions of the Constitution and, in a certain part, in its assessment reference was made to res iudicata of the initial review. On the third occasion, review was requested on the part of a certain number of Members of Parliament on the basis of the power granted in paragraph 2 of article 62 of the Constitution concerning the law on authorization of ratification. As the said law was adopted at a referendum, the Constitutional Council pronounced, on the basis of its past practice, that it was not within its jurisdiction to assess the constitutionality of a law adopted by the people at a referendum.
9The answer to this question also depends on the aim of reviewing a law on ratification. If the aim is just to exclude from domestic law such provisions as are unconstitutional, then, the review, from the viewpoint of subject matter, is only possible in the case of "self-executing" treaties. However, if the aim is also preventive (prevention of the undertaking of an unconstitutional obligation under international law), the review, from the viewpoint of subject matter, can also be considered in the case of such international agreements as do not include directly applicable provisions.
10This may occur in the case if an international agreement contains such provisions as are directly applicable in domestic law. If this should occur, the Constitutional Court would in the framework of the proceeding for the evaluation of
constitutionality abrogate the law on ratification, or those unconstitutional provisions of the international agreement which have been incorporated by it in the domestic law. Thus, such provisions of the international agreement would cease to be in force in domestic law, and this would bring about the infringing of obligations of the Republic of Slovenia under international law (breach of international law).
11."Such prior review of constitutionality of agreements obviously has the aim of avoiding disorder which would result at the level of foreign policy and international relations of the State in the case of any subsequent (a posteriori) finding that a norm included in an agreement, which has been concluded already, is not in conformity with the Constitution." Source:
Luis Lopez Guerra, Alvaro Rodriguez Bereijo: Raport de la delegation, Espagnole, Protection constitutionnelle et protection internationale des Droits de l'Homme: Concurrence ou complementarite, IX. Conference of European Constitutional Courts, Paris, May 1993, page 272.
12The position of the Spanish Constitutional Jurisprudence concerning this question is as follows: "Although in its form this finding may not acquire the legal character of decision, it nevertheless represents a jurisdictional decision which has mandatory power and which as such has, erga omnes, all the effects of a matter adjudged - both negative (following the procedure of adjudication, the court can no longer be requested to adjudicate the matter) and positive (obligation imposed upon all public authorities, which these should observe and bring their actions in accord with it). Source: Luis Lopez Guerra, Alvaro Rodriguez Bereijo: Raport de la delegation Espagnole, Protection constitutionnelle et protection internationale des Droits de l'Homme: Concurrence ou complementarite, IX.
Conference of European Constitutional Courts, Paris, May 1993, page 274.
13 1. Attention should be drawn to the correct interpretation of the notion of "law on adherence (= ratification)" and the application of the term "adopted (=ratified) by the National Assembly" (article 86 of the Constitution, paragraph 2 of article 153 of the Constitution). This term does not mean that, from the viewpoint of international law, the National Assembly ratifies an international agreement. From the viewpoint of international law, this term should be understood in the sense of approval of the international agreement.
2. "Approval in the form of a law on ratification is a special act taking place between the signing of the agreement and its ratification, and is an indispensable element in making major international agreements. An agreement which is subject to approval binds the State, and even an individual person, not because of being approved by the legislator but because of being ratified by the Head of State or Prime Minister authorized to perform such acts after legislative approval has been obtained (...). Approval is in fact an act governed by domestic law; this is a reason why it cannot represent direct ratification. But approval is a step in the process of making an international agreement and, thus, a proper act of cooperation in the process of concluding the agreements. Also, the approval is an authorization granted for ratification. Undoubtedly, it is always the executive power which carries out the ratification, without having obtained legislative approval for this (...).
Approval (...) ensures actual implementation, for both the executive and judicial branches assume the responsibility for the agreement. If the international agreement is directly applicable, it may be expected that the legislator, who has approved the agreement, will not pass such laws as would be in disagreement with the agreement. If the agreement requires the implementation after the ratification, it may be expected that the approval obliges the legislator to pass the implementing legislation.." Source: Luzius Wildhaber: Treaty-Making Power and Constitution, An Internal and Comparative Study, Hlebing & Lichtenhahn, Basel, 1971, pp. 82 to 84.
3. Also shown by way of comparison is the relation between ratification as a commitment under international law and a law on approval of an international agreement in internal law of the Federal Republic of Germany. Article 59 of the German Constitution (enabling statute) provides:
"(1) The Federal President represents the Federation in matters of international law. On behalf of the Federation he/she shall conclude agreements with foreign States. (...)
(2) Agreements which regulate political relations of the Federation or which refer to a subject matter subject to federal legislation shall be subject to approval (...) in the form of a federal law."
The legal nature of the law by which the concluding of an international agreement is approved (Zustimmungsgesetz" - hereinafter: law on approval) is described in theory (Maunz - During, Grundgesetz, C.H.Beck, Munchen, 1994) in the following way (summarized):
The Federal State President expresses the will of the State outwards, and this will is formulated within the framework of internal law by the Constitution. Law on approval is an act governed by internal law, which authorizes the Federal State President to conclude an international agreement. However, the law may also have a transformational function. If an international agreement contains provisions which are "capable of transformation" ("transformationsfahig"), the law on approval will transform its provisions into the internal legal system. In such a case, the law on approval is the law in formal and substantive sense (for it acts, via legal norms of an international agreement - on legal relations under domestic law in an abstract and general way);in the case when an agreement only regulates political relations of the State with other entities of international law, its provisions are not directly applicable, which is why in this case the law on approval is law only in formal sense. The nature (direct applicability) of provisions of an international agreement is determined by interpretation; in this connection the role of legal theory and judicial practice is of importance. By formulations in the law on approval, the legislator cannot transform into a legal norm something which is not such.
An international agreement concluded without a law on approval does not have any effect in domestic law - it has not become part of the internal legal system. Effectiveness under international law, on the other hand, depends on rules of international law, and not on those of internal law.
14If the Parliament does not approve an international agreement (treaty) which has been signed by the Government, or if it makes an additional reservation with respect to it, this means that, via the legislative act of approval, it has exercised "a sort of parliamentary control over the Government. Denial of approval would, in this sense constitute the passing of a vote of no confidence against the Government." Source: L. Wildhaber, Treaty-Making Power and Constitution, An Internal and Comparative Study, Basel: Hlebing & Lichtenhahn, 1971, p. 84. 15Buerghental (Self-Executing and Non Self-Executing Treaties in national and International Law, Martinus Nijhoff,
Dordrecht/Boston/London) says that there are two methods or approaches by which effect of an international agreement in internal law is achieved (in this connection he points out that what is given is just an outline, which disregards details of implementation). According to the first possibility, the agreement acquires the nature of a piece of internal legislation by ratification and promulgation in accordance with rules of domestic law of the State (this is true in particular of the major part of Latin America, USA, Germany, Italy, France, Spain, Belgium, Switzerland etc.). The legislative organ (one of the organs of the legislative body) of these States grants an approval to the executive branch, to ratify the agreement; when the agreement has been ratified (in accordance with international law), it acquires the nature of international law. The legislator takes part in the procedure of ratification (naturally, just in the part of this procedure concerned with domestic law), which is why its subsequent intervention aimed at incorporating norms of international law in domestic law is not necessary. In other States (Great Britain, Ireland, some former and current Members States of the British Commonwealth), as a rule, the executive branch itself (without obtaining approval on the part of the legislator) decides concerning the ratification. The executive branch in these countries is authorized, at its own discretion, to bind the State under international law. For provisions of an international agreement to become part of domestic law, it is however, necessary for the legislator to pass the corresponding law. The third, smaller group of States (e.g., Scandinavian countries), on the other hand, has a mixed system, in which ratification is approved by the legislator; still, yet another legislative intervention on its part is subsequently required for provisions of the agreement to become a part of domestic law.
The fact that, by the approval of ratification in a particular State, the international agreement acquires the character of internal law, however, does not yet mean that such agreement can create obligations and rights that could be directly applied before courts. Such effect can only pertain to the so called "self-executing treaties - agreements which contain directly applicable provisions. The question of whether an agreement is a self-executing one or not is one of internal law. The answer to this question should be provided by courts in the State concerned. Buerghental finds that courts answer this question differently - depending on the Constitution of the State concerned, legal tradition, historic precedents and political institutions. It is not at all uncommon for the same agreement to be applied in one country as the self-executing one, while in another this is not so.
Buerghental especially points out that an agreement which is not directly applicable also becomes, by ratification, part of internal law. Such law is not directly applicable, but it has legal effects; for example, it grants authorization to State bodies to act in specific manner (the passing of a law etc.), or binds the same to act so. Such agreement, then, is a legal source, but it is not directly applicable in concrete relations in which entities of private law are involved.
From the viewpoint of international law, the manner of executing an international agreement has no relevance, unless the agreement contains explicit request that its provisions be directly applied in internal law. However, such request are rare in international law, says Buerghental.
16International agreement is a bilateral legal transaction. This is why legal security dictates that formalities relating to the effecting of a transaction should clearly ascertain the content of the declaration of intention and of the obligations undertaken on its basis, should ascertain that the declaration of intention has in fact been made on behalf of specific entities, and that these entities are in fact bound by such declaration. Source: J. Andrassy: MeŽunarodno pravo, seventh edition, Zagreb, 1978, p. 323.
17International law requires a system in which States must organize their power in the field of foreign affairs in such a way that they will be capable of cooperating in international transactions in active, stable, reliable, reasonable and responsible manner (...). The State must ensure the implementation and execution of all international agreements being in force. The principle of pacta sunt servanda and the entire structure of international relations depend on this rule. International agreements would be void of importance if each State could evade international obligations under the pretext that they are in conflict with provisions of its domestic legislation. Source: Luzius Wildhaber, Treaty-Making Power and Constitution, An Internal and Comparative Study, Hlebing & Lichtenhahn, Basel, 1971, pp. 175 and 184.
18 1. Breach of international law is any act or omission in disagreement with international law on the part of an international entity, from which damage results (moral damage is enough - and this accompanies any breach of agreement) for another international entity. Liability in tort of the State refers to acts or omissions made by the State in its capacity of holder of sovereign power. In this connection, the State shall be held responsible for any act or omission which is contrary to international obligations, regardless of the body by which the breach has been committed: the constitutioner, the legislature, the Government or judicature. If internal laws and regulations are the cause of violation, the entity under international law is responsible if only because it has not modified such laws or regulations. Source: J. Andrassy: MeŽunarodno pravo, Zagreb, 1978, pp. 356-364.
2. The State is responsible for any non-fulfilment of an agreement. It is irrelevant whether the Parliament has failed to pass the implementing legislation such as is required by an international agreement, or whether the relevant foundations which are required for implementing the international agreement are rejected by the legislation (...), or whether the executive branch or judicature makes impossible the coming into effect of the agreement, for example by pronouncing the same to be unconstitutional. Source: Luzius Wildhaber, Treaty-Making Power and Constitution, An Internal and Comparative Study, Hlebing & Lichtenhahn, Basel, 1971, p. 184.
19International law does not demand from the State to fulfil an agreement in a precisely defined manner... International law does not create the obligation of "the way" but the obligation of "the result": States are responsible for dutiful fulfilment of obligations. Source: Luzius Wildhaber, Treaty-Making Power and Constitution, An Internal and Comparative Study, Hlebing & Lichtenhahn, Basel, 1971, p. 183.
20The same position is held in practice by Spanish constitutional jurisprudence. Source: Luis Lopez Guerra, Alvaro Rodriguez Bereijo: Raport de la delegation Espagnole, Protection constitutionnelle et protection internationale des Droits de l'Homme: Concurrence ou complementarite, IX. Conference of European Constitutional Courts, Paris, May 1993, pp. 272-275.
In the case of the request for the evaluation of
constitutionality of the Maastricht Treaty, the French President also had to supplement his request by specifying more precisely the provisions of the Treaty to which his request referred.
Source: L.Favoreu and L.Philip: Les grandes decisions du Conseil constitutionnel, 7ume edition, Sirey, Paris, 1993, p. 799. 21 1. Corresponding provisions from Constitutions of some other States which concluded the Association Agreement:
Bulgaria, article 22:
"(1) A foreign natural person or foreign legal person may not acquire title to land, unless by legal succession in title. (2) A foreign natural person or a foreign legal person shall freely acquire the rights of use, building rights and other rights in rem under such conditions as are determined by statute.".
Estonia, article 32, paragraph 3:
"Determined by statute, in public interest, shall be the categories of property in Estonia which are reserved for ownership by Estonian citizens, certain categories of legal persons, local authorities or Estonian State."
Slovakia, article 20, paragraph 2:
"... It may also be provided by statute that title to certain things may only be acquired by citizens or legal persons having the seat in the Slovak Republic.".
Czech Republic, article 11, paragraph 2 of the Charter on Human Rights and Fundamental Freedoms, which is an integral part of the constitutional system of the Czech Republic:
"(...) Statute may also provide that certain things can only be owned by citizens or legal persons having the seat in the Czech Republic.".
Lithuania, article 47 also provides: "(...) Title to land, inland waters, forests and parks may be acquired only by citizens and the Republic of Lithuania as the State." Romania, article 41, paragraph 2 also provides: "(...)
Foreigners and persons without nationality cannot acquire title to land."
2. Statutory provisions regulating the acquisition of title to real property in some States (according to Government information):
Foreign natural and legal persons who engage or intend to engage in a particular economic activity in Hungary enjoy the same rights as Hungarian nationals. Foreigners may freely purchase buildings and apartments without prior acquisition of approvals and without being subject to restrictions on surface area of premises. To purchase the land affixed to these, however, the foreigner must obtain approval from local authorities. If a foreign person intends to purchase an apartment or building for personal use, he/she must obtain prior approval from local authorities, who shall be entirely free to use their discretionary power when granting approval concerning such purchase. A foreigner may not acquire title to land. Statute prohibits domestic and foreign legal persons from purchasing land. Owners of agricultural land can only be the Hungarian State, local authorities, associations and public foundations which manage forests and pastures.
Purchase of real property in Poland is subject to rigorous control exercised by the Ministry of Internal Affairs, which is competent for the issuance of prior approvals on the basis of which a foreigner (natural or legal person) my acquire title to real property. The Ministry of Internal Affairs issues approvals in agreement with the Ministry of Defence, which must check whether the piece of real property concerned is located on a territory of special military importance. Purchase of agricultural land is subject to approval of the Ministry of Agriculture.
22According to the information submitted by the Government, this legislation is partly in existence already, while a part of it will still have to be passed, but not later, says the Government, than on the occasion of amending the Constitution.
According to this information, real property is subject to special regime of protection regarding agricultural land based on Farmland Act, which links the validity of a legal transaction of transfer of title to the approval by the administrative authority, prescribes preemptive right, which can be asserted by seven rightful claimants to preemptive right, and regulates separately the status of farmer. The Act also contains special provisions on leasing of agricultural land and special provisions on agrarian operations. Special regime of protection also applies to forests in accordance with Forests Act, which protects public benefit in transactions relating to forests and envisages the legal institute of preemptive right of the Republic of Slovenia, local government units, neighbouring owners and other owners whose forests are nearest to the forest being sold. Also regulated are transactions relating to apartments and residential houses, and transactions relating to business buildings and business premises.
According to the assertions of the Government, pertaining legislation is being prepared, and its subject matter is as follows:
1)- introduction of lawful preemptive right to non-built-up building land,
- doing away with provisions on building land stocks, - definition of the notion of the right to engage in building operations at a particular piece of land,
- modernization of provisions relating to nationalization, - setting up of a comprehensive system of acquisition and furnishing of building land;
- modernization and setting up of a system of integration of various physical planning components,
- precise delimiting of local and central government competencies according to physical planning areas, - formulation of rules applying to the settlement of disputes between various regimes of special purpose use at the same area, when such regimes exclude rather than complement each other, - determination of the role of former agents of planning in the sense of sustained development, in particular of institutions for the protection of cultural and nature heritage, - determination of special regimes for coastal and border areas and of a special procedure to be used in determining the structures of special importance for the defence,
- determination of ways and procedures of determination of special areas where holiday dwellings would be allowed to be built,
- regulating of tax on real property,
- introduction of tax on unused land,
- instruments for assessing the increased value of land, - incentive instruments, and
2) introduction of a regime of approvals (prior approval, consent or certificate of competent administrative authority) regarding the real property acquisition and transactions.
23The interpretation of development of the procedure and the results of association negotiations between Slovenia and the European Community is made possible on the basis of comparative analysis of the following levels of domestic and international statutory regulation in nine States who have already concluded association agreements and Slovenia:
1) comparison of restrictive constitutional provisions concerning the setting up and operation of companies of the European Community on the territory of an associate State and concerning real proper, and in particular land transactions, 2) comparison of the development of corresponding constitutional provisions in statutes and regulations of domestic law, 3) comparison of reservations which individual associated States managed to incorporate in "their respective" "Europe Agreement." The results of comparative analysis as carried out at the above three levels show the extent to which, following the end of "the game between the internal and the external" (more on this subject in Wildhaber's most recent study on reciprocal effect of conditions of domestic and international law: Luzius Wildhaber, "Wechselspiel zwischen Innen und Aussen, Basel, Hlebing und Lichtenhahn, 1996), these States (Hungary, Poland, Slovakia, Czech Republic, Bulgaria, Romania, Lithuania, Latvia and Estonia) have managed to safeguard the key elements of their restrictive legal regulations.
States have succeeded in securing concessions in the following ways:
1) by formulating the corresponding article of the basic text, which corresponds to article 45 of Slovenian ESP, 2) by defining a transitional period of ten years (five years of transitional phase I and five years of transitional phase II), 3) by extending the period of non-application of national treatment (national treatment is defined as a treatment of nationals and companies of Community Member States which is not less favourable than the treatment of domestic citizens and companies), or by extending the period before the coming into force of the condition of non-discriminatory treatment, and (4) by permanent exclusion from national treatment.
Prima facie comparison of Slovenian and other Europe Agreements shows that Slovenia has not asserted reservations, essential for the present constitutional review, concerning the setting up and operation of Community companies on Slovenian territory and concerning real property transactions, in particular those regarding land. On the other hand, Slovenia consented to some important concessions to Members States of the European Community which are contained in Annex XIII - the so called Spanish compromise proposal.
Review of Association Agreements of the European Union and its Member States with countries of Central and East Europe shows that, in these Agreements also, the provisions relating to the acquisition of title to real property are contained in the Chapter on the right of establishment, which provides that the States shall grant the so called national treatment to Community companies, branches and nationals.
Review of the content of Association Agreements (issues relating to the acquisition of title to and of other rights relating to real property:
a) Hungary
Community companies set up on the territory of Hungary shall have, from the entry into force of the Agreement, the right to use, rent and sell real property, and the right to take on lease natural resources, agricultural land and forestry, where this is necessary for the conduct of the economic activity for which they are established (article 44/8). Excluded are companies set up for the purpose of trading or acting as agents in the field of real property and natural resources. Branches of Community companies and nationals of Member States working as self- employed persons in Hungary shall be granted this right by Hungary after the expiry of the first part of the transitional period (5 years). Also excluded here is the activity of trading and acting as agents in the field of real property and natural resources.
Annex XII b in connection with article 44/1 postpones, until the end of the transitional period (10 years) at the latest, the obligation of Hungary to grant national treatment (treatment which is no less favourable than that accorded to own companies and citizens) to Community companies and nationals in the sector of acquisition, renting and sale of State property in the process of privatization.
Annex XII c in connection with article 44/7 specifies the areas or matters to which national treatment does not apply. Among these areas or matters one finds agriculture and fishing, ownership, sale and long-term lease or right of use of real property, land and natural resources.
According to the provision of article 44/6, the Association Council shall be authorized to examine the possibility of expediting the granting of rights and of including in national treatment also the areas otherwise excluded by the Agreement: it may, however, also extend the exclusion of certain sectors from national treatment.
b) Poland
The Association Agreement with Poland (article 44/7) includes identical provisions concerning the rights of Community companies established on the territory of Poland, and concerning the branches of Community companies. Only with regard to Community nationals a longer period (ten years) is envisaged as regards the acquisition of these rights.
Annex XII d in connection with article 44/1 lists the sectors where national treatment must be granted at the latest by end of the transitional period (10 years). These sectors inter alia include: acquisition, renting and sale of State property in the process of privatization; ownership, use, sale and leasing of real property; trading and acting as agents in the field of real property and natural resources.
Exclusion from national treatment (Annex XII e) applies to the following areas or matters: acquisition and sale of natural resources; acquisition and sale of agricultural land and forestry.
c) Slovak Republic
As regards the rights of Community companies, branches of these and Community nationals self-employed on the territory of Slovakia, the same provisions apply. National treatment has been postponed by not more than ten years, (inter alia) in the following sectors: acquisition of State property in the process of privatization; ownership, use, sale and leasing of real property; trading and acting as agents in the field of real property and natural resources. Wholly excluded from national treatment are the following areas or matters; acquisition and sale of natural resources; acquisition and sale of agricultural land and forestry; cultural and nature monuments (including buildings).
d) Czech Republic
The Provisions of the Association Agreement with the Czech Republic on the rights of Community companies, branches and Community nationals self-employed on the territory of the Czech Republic regarding national treatment are, in essential points, identical with the provisions of the Association Agreement with the Slovak Republic.
e) Bulgaria
The basic text of the Agreement does not contain any express provisions on the right of Community companies, branches of these and Community nationals to acquire real property. Annex XV d lists the matters exempted from the obligation to grant national treatment: acquisition of land, acquisition of apartments, except in the case of exercising the construction (building) right, or in accordance with a procedure prescribed by statute; title to real property in areas defined by Bulgarian law on economic activities of foreigners and on protection of foreign investments. In reference with these provisions, Bulgaria adopted a unilateral declaration: "Prohibition against the acquisition of land shall not affect the possibility of acquiring title to a building erected on such land. The owner may, in accordance with Bulgarian law on property right, grant to another person the right to erect a building on his land, and such person shall become owner of the building. The owner may transfer title to such building separately from title to land."
f) Romania
The Association Agreement (article 45/7) grants to Community companies, from the entry into force, the right to use, rent and sell real property, and the right to take on lease public property (according to article 135/4 of the Constitution, public property comprises underground natural resources, communication networks, airspace, water resources which can be exploited for energy production or otherwise in the public interest, coast, territorial sea, natural resources of exclusive economic zone and continental shelf, and other property defined as public property by statute), land and forestry, where this is necessary for the conduct of the economic activity for which they are established. Excluded are companies set up for the purpose of trading or acting as agents in the field of real property and natural resources.
Branches of Community companies in Romania shall be granted this right by Romania at the latest by the end of the first part of the transitional period (5 years), and nationals of Member States registered as self-employed persons in Romania at the latest by the end of the transitional period (10 years).
Excluded from national treatment are (inter alia) the following areas (Annex XVII): purchase of, title to and sale of land and forestry; purchase of, title to and sale of residential buildings which are not connected with foreign investments in Romania; cultural and historic monuments and buildings. g) Lithuania
Article 44/2 of the Association Agreement grants to branches of Community companies, from the entry into force of the Agreement, the right to acquire, use, rent and sell real property, and the right to take on lease natural resources, agricultural land and forestry, where this is necessary for the conduct of the economic activity for which they are established. By the end of the transitional period, Lithuania shall grant such rights also to Community nationals.
Excluded from national treatment are the following sectors (Annex XVII a): acquisition of land on the territory of Lithuania; mining of minerals and extraction of natural resources.
h) Latvia
According to the provision of article 44/2 of the Association Agreement, Latvia shall grant national treatment to Community companies and branches of these, from the entry into force of the Agreement. With respect to Community nationals, this obligation shall apply after the expiry of the transitional period. The commitment of granting national treatment to Community companies shall be postponed, until the end of the transitional period at the latest, (inter alia) in the following sectors: trading and acting as agents in the field of real property; ownership of port infrastructure (Annex XV). In sectors listed in Annex XV, Community companies may also not set up their branches.
24Statutory regulating of the acquisition of title to real property in the neighbouring countries of Italy and Austria, which are Member States of the European Union (information of the Government):
In Italy, foreigners enjoy the same civil rights as belong to its citizens, subject to reciprocity and in conformity with provisions of special legislation. Special laws set restrictions: 1) concerning areas of military importance, where all land on specifically defined areas of military importance along national inland and sea borders are subject to restrictions; all operations on such land is at all times subject to prior approval on the part of military authorities; 2) all acts of complete or partial disposal of real property located in provinces along national inland borders are subject to prior approval on the part of the Governor of the province concerned; such approval is also necessary in the case of such transfers of title to real property as result from the sale based on execution proceeding. Grounds for dismissal of an application need not be given.
In Austria, conditions relating to the acquisition of title to real property are regulated by provincial legislation. In the Federal Province of Carinthia, the Act on Land Transactions of 1994 sets as one of the objectives of this statute also the restricting of the acquisition of title to land by foreigners.
Land transactions by foreigners are regulated separately. An approval must be obtained from competent administrative authority to be able to acquire title, in the case of leasehold period in excess of three years, and to acquire certain usufructuary rights.
Approval of the acquisition of title to land is granted to a foreigner if real property is designed to be used as principle residence, for conducting an economic activity or, exceptionally, as holiday dwelling, subject to the condition that the acquirer has had his principal residence in Austria five years without interruptions.
25Also according to the interpretation of French legal experts, the provision of article 54 of the French Constitution, which regulates the effects of a decision taken by the Constitutional Council in greater detail than the Slovenian Constitution, does not prevent this possibility. Source: L.Favoreu and L.Philip:
Les grandes decisions du Conseil constitutionnel, 7ume edition, Sirey, Paris, 1993, p. 809.
26Thus, in the context of considering preventive review of constitutionality, Kristan also says: "If the Constitutional Court considers that an agreement is not in conformity with the Constitution, the same cannot be ratified." Source: Grad, Kaučič, Ribičič, Kristan: Državna ureditev Slovenije, second revised edition, ČZ Uradni list, Ljubljana 1996, p. 197.
Type of procedure:
review of treaties
Type of act:
other acts
Applicant:
Government of the Republic of Slovenia
Date of application:
15.05.1997
Date of decision:
05.06.1997
Type of decision adopted:
decision
Outcome of proceedings:
establishment – it is inconsistent with the Constitution/statute
Document:
AN01328