## Facts

- The Council adopted regulations implementing the European Community’s generalized system of tariff preferences (GSP) for developing countries.
- The Council cited both Article 113 EEC (common commercial policy) and Article 235 EEC (residual competence) as the legal bases.
- The Commission brought an action for annulment, arguing the measures fell entirely within Article 113 and that Article 235 was improperly invoked.
- The legal-basis dispute affected institutional procedure because Article 235 required unanimity, while Article 113 used qualified majority voting.
- The case also raised whether the Council adequately stated reasons and the legal basis as required by Article 190 EEC.

## Issues

1. Whether GSP tariff-preference regulations fall within Article 113 EEC (common commercial policy) alone or also require Article 235 EEC (residual competence).
2. Whether the Council complied with Article 190 EEC by stating sufficient reasons, including a clear legal basis, to permit judicial review and inform affected parties.

## Decision

- The Court held that Article 235 is a residual legal basis usable only when no other Treaty provision confers the necessary power.
- The Court concluded the contested GSP measures fell within the scope of Article 113, which was sufficient to authorize their adoption.
- The Court rejected using Article 235 to supplement Article 113 where the effect would be to alter decision-making rules (e.g., moving from qualified majority to unanimity).
- On Article 190, the Court reaffirmed that Community acts must state reasons and identify their legal basis with enough clarity to permit review and provide notice; omission of an express citation is not automatically fatal unless it creates uncertainty about the true legal basis.

## Legal Principles

- The choice of legal basis must rest on objective, reviewable factors, particularly the measure’s content and main purpose, not institutional preference.
- A residual competence clause may be used only if the Treaty contains no specific power for the measure.
- The common commercial policy extends to trade measures that incorporate development-related objectives, including generalized tariff preferences.
- The duty to state reasons requires a statement of the essential factual and legal considerations, including the legal basis, sufficient for judicial review and legal certainty; explicit reference becomes necessary when the basis is otherwise unclear.

## Conclusion

The Court determined that regulations implementing generalized tariff preferences are measures of the common commercial policy and therefore must be founded on Article 113 EEC alone; Article 235 cannot be invoked where a specific Treaty power exists, nor to change the applicable voting procedure, and Community acts must disclose reasons and legal basis with sufficient clarity to allow review and understanding.


Comm’n v. Council (Generalized Tariff Preferences), Case 45/86, [1987] E.C.R. 1493 (C.J.E.C. 1987)