1. The current enforcement system of the Energy Community lacks effectiveness due to its political nature, lack of sanctions, and inability to directly involve private parties or allow preliminary references or direct actions. 2. Alternatives for enforcing energy law, such as relying on national courts or international arbitration, are also limited due to weak institutions, lengthy proceedings, and unsuitability for small disputes. 3. Reforming the enforcement system to establish a judicial body and revise the sanctions system could help overcome political deadlocks, allow treaty interpretation, and increase compliance with energy law.

1. Energy Community SecretariatEnergy Community Secretariat
Rozeta Karova, Ph.D.
What is wrong with Energy
Community law enforcement?
Energy lawyer, Energy Community Secretariat
Vienna Forum on European Energy Law, 13 March 2015, Vienna 1

2. Energy Community SecretariatEnergy Community Secretariat 2
Outline
1. Energy Community enforcement system – status quo
2. Why it does (not) work
3. Reform of the existing Energy Community enforcement system
Vienna Forum on European Energy Law, 13 March 2015, Vienna

3. Energy Community SecretariatEnergy Community Secretariat 3
Enforcement: Dispute Settlement Mechanism
Art.90-93 EnCT: Failure of CP to comply with EnC law
Vienna Forum on European Energy Law, 13 March 2015, Vienna
Reasoned Opinion by ECS (or CP or ECRB)
Detailed statement of
reasons
CP concerned to
comply with EnC law
Reply by CP concerned
Opening Letter by ECS
CP concerned submits observations
in 2 months
Reply by CP concerned
Preliminary procedure
Complaint by private
body
*Broad standing
Notification by Party or
ECRB
ECS initiative

4. Energy Community SecretariatEnergy Community Secretariat 4
Enforcement: Dispute Settlement Mechanism
Vienna Forum on European Energy Law, 13 March 2015, Vienna
Ministerial Council – binding decision
Existence of a breach
Existence of a serious
and persistent breach +
sanctions
Dismissal of a complaint
(partially / entirely)
Advisory Committee opinion
* 3 members + EU representative
Procedure before the Ministerial Council
Request by ECS, Party
or ECRB
Proposal for a decision Reply by CP concerned

5. Energy Community SecretariatEnergy Community Secretariat 5
Why it does not work?
EnC dispute settlement procedure
1. Main characteristics of the existing EnC dispute settlement:
 Political mechanism which does not lead to a judicial decision
 Infringement against Contracting Parties only
no direct actions (no right of appeal)
no preliminary references
 No disputes between private parties & No investor-State disputes
2. Draw-backs and limits to such dispute settlement:
 Political nature
 No Court
 No effective (dissuasive) and adequate sanctions
Vienna Forum on European Energy Law, 13 March 2015, Vienna

6. Energy Community SecretariatEnergy Community Secretariat 6
Why it does not work?
Other options
1. Energy Community enforcement system
=> one of the weakest points of the Energy Community & constant calls for its
improvement
2. Other protection of Energy Community values and legal rules
 national courts
 Problems beyond the energy sectors => weak institutions; lack of functioning
judiciary; lengthy proceedings...
 Direct applicability of EnC law & State liability => not used
 international arbitration
 not suitable for domestic undertakings & small investors
Vienna Forum on European Energy Law, 13 March 2015, Vienna

7. Energy Community SecretariatEnergy Community Secretariat 7
EnC dispute settlement in action
 Non-transposition and non-implementation cases
 Areas of law beyond energy (State aid; environment; energy efficiency; RES)
 Cases against one or more CPs (lack of common coordinate congestion
management method x 6 CPs)
 Issues not dealt in EU
 Cost-reflectivity of tariffs
 Local content requirement
 Lack of unbundling
 Positive results in preliminary procedure by ECS - pursuasiveness of legal
arguments (reliance on free movement; competition; general legal principles, ECJ case
law when available), bilateral negotiations
 Limits: politically sensitive cases and/or weak not pursuasive sanctions
Vienna Forum on European Energy Law, 13 March 2015, Vienna

8. Energy Community SecretariatEnergy Community Secretariat 8
The future...
1. Establishing a judicial body would:
 introduce judicial protection
 de-politicize the enforcement system
 overcome a possible dead-lock in the Ministerial Council
 allow interpretation of the Treaty and applying the EU constitutional principles
 contribute to development of EU energy law
2. Revision of the system of sanctions would:
=> Increase compliance with EnC law – ensure timely and effective implementation
Vienna Forum on European Energy Law, 13 March 2015, Vienna

9. Energy Community SecretariatEnergy Community Secretariat 9
www.energy-community.org
Thank you
for your attention!
Vienna Forum on European Energy Law, 13 March 2015, Vienna