Legal Response International » Adaptation Fund legal personality under German law

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1. If the Adaptation Fund Board (currently a body under the Kyoto Protocol) was designated as an operating entity under the (Financial Mechanism of the) UNFCCC would this affect the legal personality conferred under German law (by an act of parliament)?

2. How and to what degree does the act of parliament conferring legal personality to the AFB limit the functions the parties to the Convention may assign to the AFB?

3. If the AFB was designated as an operating entity of the Financial Mechanism of the Convention would it be necessary to amend or pass a new act of parliament to confer legal personality to the “new” AFB?

4. If so, how would this affect the current host country agreement?

1. By changing the AFB’s character from a body under the Kyoto Protocol into an operating entity under the Financial Mechanism in accordance with Article 11 of the Convention, we understand that the AFB becomes an international entity with legal capacities, e.g. to enter into agreements on international level.

We do not see that this change would affect the legal situation under German law. From a German perspective, international law and national law are separated legal systems, which do not interact with each other. For that reason, every international treaty requires for its implementation into German law a separate federal law. Without such implementing law, the treaty will not have any effect in the German legal system, irrespective of the question whether the treaty has already become binding for Germany or not

However, with federal law of February 1, 2011 (the “Federal Law”), the German federal parliament (“Bundestag“) provided AFB on a German national level with the legal capacities to enter into contracts, to acquire and dispose assets and to be party of legal proceedings.

For the aforesaid reasons, it is unlikely that either the granted legal capacities on German national level or the legal personality will be subject to change.

2. Following from the aforesaid, neither international law can restrict German law nor can German law restrict international law. This is even more true, as the Federal Law does not impose any conditions for granting of the legal capacities, but comprises regulations only, which specify the AFB’s legal capacity and its board members’ and assets’ immunities.

3. We do not think that any amendment of the Federal Law or even a new federal law might become necessary. We understand, the AFB’s name and its character as subdivision of the UNFCCC will not be subject to change. Additionally, we understand, that the AFB’s description in the Federal Law, which states that the AFB was implemented by the Kyoto Protocol of December 11, 1997, will remain valid. Therefore, a change of the Federal Law’s wording is not necessary.

Furthermore we do not see a necessity for amendments or passing of a new federal law, as the legislator’s objective to pass the Federal Law in 2011, will still be met. The objective was to enable the AFB to fulfill its functions as effective as possible. Therefore, it was enabled to enter into contracts with beneficiaries and ensure beneficiaries’ compliance with the funding criteria by being able to take legal steps. This objective will stay unchanged and be obtained. Even in case the AFB would obtain legal capacities on German national level through its new international character – which is not the case, as aforesaid – the Federal Law would become obsolete though, but would support the legislators objective anyhow.

4. As explained, we do not think any amendment of the Federal Law or passing of a new law is necessary. The relevant host country agreements with the Federal Republic of Germany were concluded with the United Nations (November 10, 1995) and the United Nations and the Secretariat of the UNFCCC (June 20, 1996 and December 7, 2005).

Due to its possible new legal character as an international entity, the AFB would be enabled to enter into agreements with the Federal Republic of Germany. One might consider that a separate host country agreement might have advantages. Anyhow, we do not see a necessity for a separate agreement, as the AFB will stay a UNFCCC subdivision and is therefore covered by the existing agreements.