Building capacity to help Africa trade better

Is the AfCFTA a Legal Person? Does it matter?


Is the AfCFTA a Legal Person? Does it matter?

Is the AfCFTA a Legal Person? Does it matter?

International organizations can be (and often are) subjects of international law. Whereas States possess the totality of international rights and duties recognized by international law (they enjoy “sovereignty”), the rights and duties of international organizations must be specified in their constituent instruments.[1] When creating international organizations, States can provide for institutions and grant them powers which may qualify the exercise of their own sovereign powers.

Why would the Member States (MS) of an international organization do so? The answer relates to the functions which they want an organization to perform, including those to be undertaken on behalf of the collective. In this manner future actions can be streamlined and convergence be promoted; which are very necessary with respect to regional trade arrangements. Un-coordinated national measures lead to fragmentation. The MS will indicate what the new entities must be able to do and what the implications of their actions will be for them. They may e.g. decide that the organization could conclude international agreements and enter into contracts in its own name.[2]

If an international organization must implement tasks associated with an advanced regional integration and trade arrangement, “supra-national” institutions may be called for. The EU Commission is an example. It enjoys wide-ranging powers and undertakes tasks normally performed by the executive branches of national governments.[3]

For international organizations (or their institutions) to enjoy international legal personality they must be granted the necessary status and powers. It then becomes necessary to distinguish between the powers of such institutions and those of the MS. A judicial body will, as a rule, decide disputes about the demarcation of such powers. To ensure certainty for the MS as well as the private sector affected by the implementation of the agreement in question, the arrangements agreed upon should ideally be rules-based.

Several of the treaties establishing African Regional Economic Communities (RECs) provide for legal personality and associated powers. Article 3 of the Southern African Development Community (SADC) Treaty, for example, states that SADC “shall be an international organisation, and shall have legal personality with capacity and power to enter into contract, acquire, own or dispose of movable or immovable property and to sue and be sued. In the territory of each Member State, SADC shall... have such legal capacity as is necessary for the proper exercise of its functions.” Article 4 of the East African Community (EAC) Treaty reads: The Community shall have the capacity, within each of the Partner States, of a body corporate with perpetual succession, and shall have power to acquire, hold, manage and dispose of land and other property, and to sue and be sued in its own name.

What is the position regarding the AfCFTA? The founding Agreement does not state that this arrangement will be a legal person. However, Article 13 of the Agreement provides:

  • The AU Assembly shall establish the AfCFTA Secretariat, decide its nature, location and approve its structure and budget. (The AU Commission shall be the interim AfCFTA Secretariat, until the latter is fully operational.)

  • This Secretariat shall be a “functionally autonomous institutional body within the AU system”, but with independent legal personality. The nature and extent of its legal status and powers are still to be determined.

  • The Secretariat shall be “autonomous” of the AU Commission.

  • The funds of the Secretariat shall come from the overall annual budgets of the AU.

  • The roles and responsibilities of the Secretariat shall be determined by the Council of Ministers of Trade. (This Council consists of Ministers of Trade of the State Parties.[4])

The AfCFTA Agreement grants important powers to the AU Assembly, which is composed of all AU Member States. Some of them may not join the AfCFTA, or may only do so at some future date after the AfCFTA Agreement has entered into force. (The AU has 55 Members but only 22 ratifications are required for entry into force of the AfCFTA Agreement.[5]) The implication is that AU Members which are not AfCFTA Parties, will be able to (jointly) exercise all those powers AfCFTA which have been allocated to the AU, including those related to the Secretariat. These AU members will not be bound by such decisions. AU Assembly decisions are taken on the basis of consensus, or failing which, by a two-thirds majority of the AU MS.[6]

The AfCFTA is a unique arrangement. Its establishment required compromises between two different viewpoints: The AfCFTA as a stand-alone trade arrangement, on the one hand, and it being an organ of the AU, on the other, the followed can be noted:

  • The AU Assembly forms part of the Institutional Framework for the Implementation of the AfCFTA.[7] The other AfCFTA institutions are the Council of Ministers (of the State Parties), the Committee of Senior Trade Officials (of the State Parties) and the Secretariat.[8]

  • The Assembly (the highest decision-making organ of the AU) shall provide oversight and strategic guidance on the AfCFTA.[9] It shall also have the exclusive authority to adopt interpretations of the AfCFTA Agreement on the recommendation of the Council of Ministers.[10] This can determine how future disputes will be settled.

  • The AfCFTA is work in progress and must lay the foundation for the establishment of a Continental Customs Union at a later stage.[11]

  • The State Parties (the AU MS that have ratified or acceded to the AfCFTA Agreement and for which the Agreement is in force[12]) must establish and maintain an institutional framework for the implementation and administration of the AfCFTA. However, the AU Assembly too plays a role in this regard; it decides the nature, location and structure of the Secretariat.[13]

  • The AfCFTA is a member-driven arrangement, but these are the MS of the AU.[14]

What are the implications for the implementation of the AfCFTA agreement? Implementation will require clarity of purpose and certainty about the powers of the entities to be established, and how they will interact with some existing ones.

The institutional aspects will require further elaboration. This could be done when the Secretariat is finally established. This body may turn out to be a vital part of the unfolding picture. However, it is to be noted that the AfCFTA will co-exist with the RECs. Article 19 of the Agreement states that State Parties that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under the AfCFTA Agreement, shall maintain such higher levels among themselves. Their acquis must be preserved.[15]

[1] https://www.lawteacher.net/free-law-essays/international-law/international-legal-personality.php

[2] The 1986 Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations affirms that the treaty-making power of an international organization is determined by “the rules of that organization”.

[3] The Commission, for example, negotiates trade agreements and administers tariffs on behalf of the EU Members.

[4] Art 1.

[5] Art 23(1).

[6] Art 7, AU Constitutive Act.

[7] Art 9.

[8] Ibid.

[9] Art 10(1).

[10] Art 10(2).

[11] Art 3(d).

[12] Art 1.

[13] Art 13(1).

[14] Art 5(a).

[15] Article 5(f).

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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