The Anti-Coercion Instrument will come into effect on 27 December 2023. It is designed to deter and, if necessary, act against the practice of economic coercion.
What is the EU'S Anti-Coercion Instrument (ACI)?
The EU introduced the ACI in 2021 to counteract economic coercion from certain countries. The ACI is a tool designed to combat such coercion by using measures that affect trade or investment. A legislative framework ensures predictability, transparency, and a rules-based approach. It also provides opportunities for swift and efficient action and a platform for international cooperation.
This final agreement on our new Anti-Coercion Instrument is truly a major step forward for the EU. It sends a clear signal to our global partners that we reject all forms of economic coercion by third countries. It will allow us to be more assertive in defending our legitimate rights and interests. The ACI provides an important building block for the EU’s economic security and its Member States. We will only use it when we need to ensure that our policy decisions remain free from interference by third countries. I am delighted that we will soon have this crucial tool in place.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade - 05/06/2023
Definition of economic coercion
Economic coercion refers to a situation where a third country tries to influence the EU or one of its Member States to make a specific decision by threatening trade or investment measures.
There are various types of coercive practices, such as when an EU trading partner attempts to shape the EU's future legislative initiatives or discourages the EU from implementing a measure altogether. This can be done by introducing (or threatening to introduce) extra import duties, causing intentional delays or refusing (or threatening to refuse) authorisation that is essential to conduct business. Additionally, they may impose discriminatory border or safety checks on goods from a specific EU Member State or organise state-backed boycotts against goods or investors from that country.
How to activate the ACI?
The instrument can be triggered when a third country threatens to apply a measure that affects trade or investment to prevent or obtain the cessation, modification, or adoption of a particular act by the Union or a member state.
Stakeholders' input will be considered while deciding to activate the instrument, and businesses are encouraged to share relevant information. The ACI and any actions taken under it comply with the EU's international obligations and are fully grounded in international law.
Does the ACI target a particular country?
No, the ACI does not target any particular country. It addresses the problem of economic coercion wherever it may come from. It can be applied to any country using economic coercion against the EU or its Member States.
What responses may the EU give under the ACI?
The EU has designed a broad range of potential measures to combat economic coercion in an effective and efficient manner with minimal or no impact on its economy. The objective of these measures is to stop coercion and they can involve import/export restrictions on goods and services, intellectual property rights, foreign direct investment, and access to the EU market. The measures are only available as a last resort and are subject to specific conditions. They must be proportionate to the harm they address and should be targeted and temporary. In other words, they will only apply as long as the breach prevails.
What is the role of the Union interest in the operation of the instrument?
When selecting response measures, the Union's interest must be considered. A dedicated article outlines the process for determining the Union's interest, which includes the preservation of sovereign choices, as well as interests of Union economic operators and consumers affected by economic coercion.
Criteria for selection and design of Union response measures
The Regulation provides objective criteria for selecting and designing the Union's response measures. The main criteria focus on effectiveness, avoiding negative effects on the Union and operators, and compliance with requirements. The measures should consider Union interests, policies, and objectives, avoid interference with administrative decisions based on scientific evidence, and minimize administrative complexity and cost.
Injury reparation
The Regulation establishes a framework that allows the Union to demand that a coercing country repairs any harm caused by its economic coercion. The term "injury" refers to any harm suffered by the Union, Member States, or economic operators. The Commission may also impose Union response measures to ensure these reparations are made, where appropriate.
On a proposal from the Commission, the Council determines whether the right to reparation should be pursued. The Commission then takes action based on this decision.
Decision-making under the instrument
The instrument uses implementing and delegated powers for flexibility and quick action. The Council uses an implementing act for coercion determination, and the Commission adopts Union response measures with an implementing act, with help from Member States. Changes to rules of origin may be made through delegated acts. Stakeholder involvement is crucial for selecting and designing response measures. The Commission updates the European Parliament and the Council throughout the process, including when the response measures are in force.
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