EU Law year 2 RUG
Cassis de Dijon
(The court said the liquir had too little alcohol and wanted to stop sales) Para 10 Public health vs Economic freedom - Mutual recognition of each other's regulatory standards
Art 7 TEU (a political mechanism)
- The EU does not have general fundamental rights competence: this means that the Commission cannot bring infringement proceedings against a Member State that is violating fundamental rights, unless a connection with EU law can be established Two safeguards provided in Art 7 TEU 1) in case of a clear risk of breach of foundational values the Council can issue recommendations to the MSs in question and it can monitor the situation. The procedure can be triggered by a reasoned proposal of one third of the MSs, by the European Parliament, or the Commission 2) the determination of a 'serious and persistent' breach of the foundational values must be agreed by the European Council. After this determination is made, the Council, by a qualified majority, might adopt sanctions of the voting rights of the MS concerned
What constitutes a restrictions (on capital rules)
- Total ban - Prior-authorization
Proportionality test
1) Appropriate / suitable - Restrictive national measures taken in the public interest will be considered to be appropriate or suitable if the means which they employ are suitable for the purpose of attaining the desired objectives 2) Necessary - Requires that if a Member State has a choice between various measures to attain the same objective, it should choose the means which lest restrict free movement
Goals of competition law
1) Structure of the market: - the number of undertakings (the more competitors you have, the less power each company has) 2) Performance of the market: - Constraining private owner - Efficiency (allocative and product efficiencies) → total welfare - Consumer welfare - Inclusive markets → access to the market and potential competition 3) In the EU: market integration (Consten and Grundig) - Prohibition of practices which hinder the internal market
Loyalty 4(3) TFEU (sincere cooperation)
A necessary precondition - Limits the competence but MSs took it upon themselves to limit their sovereignty in respect to EU law - To help, not to hinder - Everyone is bound
Vertical Direct effect
Against the State and other public sector organs (doesn't allow the State to fail their obligations, Van Duyn)
Directive 2004/38 (citizenship = CRD)
Baumbast case: The application of the limitations and conditions acknowledged in article 21 TFEU in respect of the exercise of the right of residence is subject to judicial review. Consequently, any limitations and conditions imposed on that right do not prevent the provisions of article 21 TFEU from conferring on individuals rights which are enforceable by them and the national court must protect
Enforecement of Values
Challenging because they are not part of the acquis (law) Art 7 TEU aims to ensure that all EU MS respect the common value of the EU including the Rule of Law
Capital
Distinction between capital and current payment was accepted in Luisi and Cabrone (paras 21, 22)
What is the role of 'home state regulation' for natural and legal persons (art 45/49 TFEU) and why?
Freedom of establishment emphasizes the host state regulation (e.g. Gebhard para 35-36) - Establishing yourself in another MS entails subjecting yourself to that host state's regulation (Insofar as the host state's regulation is not hindering market access) In SOME circumstances home state regulation is still relevant - However, MS cannot ignored the knowledge and qualifications acquired in another MS (Gebhard para 38) - In respect of company formation, the principle of mutual recognition applies (art 54 TFEU + Centros)
Establishment
Gebhard: 'the concept of establishment within the meaning of the Treaty is therefore a very broad one, allowing a Union national to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to social and economic penetration within the Union in the sphere of activities as self-employed"
Legal basis
Indiates who may adopt the act, what the act may contain, and what procedure must be followed to adopt it
Dassonville / MEE defined
MEQR / MEE (Measure equivalent to a quantitive restriction) defined: Any trading rule capable of hindering, directly or indirectly, actually or potentially, trade
Justifying restrictions (capital)
National measures lieable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty can be justified only if they fulfill these four conditions (Reisch para 33) 1) they must be applied in a non-discriminatory manner 2) they must be justified by overriding reasons based on the general interest 3) they must be suitable for securing the attainment of the objective which they pursue 4) they must not go beyond what is necessary in order to attain that objective
General principles
Stauder: even though there are no actual rules -> commonly accepted ones are recognized as general principles Internationale Handelsgeselschaft: MSs do not need to to protect fundamental rights, the Court will do that Nold: the Court cannot uphold measures which are incompatible with the fundamental rights Laserdisken: the Court draws inspiration from cosntitutional traditions common to MSs
Innominate non-legislative procedures (INP)
The Council adopts a measure by a qualified majority on the basis of a Commission proposal, often without the participation of the European Parliament Executive rather than legislative (e.g. fixing agricultural prices)
Direct effect: primary law
Van Gend Test: clear, precise, unconditional
Autonomy
Van Gend en Loos - EU is a new legal order, independent - Sovereignty is limited through the principle of conferral
Restriction of competition by object (purpose)
What are restrictions of competition by object: - Price fixing - Market sharing - Output limitations - Resale price maintenance - Exchange of information (Cartes bancaires para 53-58)
Fundamental rights as a limit upon the acts of MSs
When MSs implement Union law or act within its scope by limiting one of the rights granted by the Treaties, they have to comply with all of the constitutional principles of the EU, including fundamental rights Carpenter: A national of the Philippines living in the UK; she marries Mr Carpenter, who was a British citizen also living in the UK, ad applied for a residence permit as the spouse of a British national. Her application was denied on the grounds that she had overstayed her visa and she was asked to leave the country and apply for a new visa from the Philippines - Chose a different strategy → invoked EU law - Mr Carpenter provides service → his wife needs to look after his children → Her deportation would hinder Mr Carpenter's ability to travel to provide service → Thus, the Court concluded that Mrs Carpenter's deportation was illegal
Judicial review of compliance with the subsidiarity test
Working time case: once the legislature had found it was necessary to pursue a particular objective, achievement of that objective necessarily presupposes Community-wide action (principle of subsidiarity doesn't apply since states can harmonize each other's laws) British American Tobacco (contrary): as the Union does not have exclusive comptences to regulate economic acitivity of the internal market, the principle of subsidiairy applies to measures in this ares, before examining 'whether the objective of the proposed action could be achieved at Union level'
Restrictions on free movement of services
What is a restriction of the free movement of services? - all forms of direct and indirect discrimination (Van Binsbergen) - other measures which directly affect market access (Alpine Investments)
Regulatory competition
also called competitive governance or policy competition, is a phenomenon in law, economics and politics concerning the desire of lawmakers to compete with one another in the kinds of law offered in order to attract businesses or other actors to operate in their jurisdiction.
Gebhard
(mainly concerns the dividing lines between freedom of establishment and the provision of services is widely considered to articulate a classic statement of the restriction/justification formula that operates across the different sectors of free movement law) National measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfill four conditions: 1) they must apply in a non-discriminatory manner 2) they must be justified by imperative requirements in the general interest 3) they must be suitable for securing the attainment of the objective which they pursue 4) they must not go beyond what is necessary in order to attain it
Internal market development in brief
- A common market that would balance freedom and fairness, and where the political institutions would play a leading role in creating the common market through harmonization → this did not work - Instead, the Court seized the initiative in cooperation with the Commission and with the eventual support of the MSs → the result was a single market that was based less on harmonization and a level playing field and more on home country control and competition - However, we might be witnessing a shift in the internal market paradigm once again
Art 30 TFEU
- All customs duties and charges having equivalent effect are prohibited - No minimum threshold ('de minimis') - No exceptions - Also applicable to custom duties within a Member State (Carbonati) - Three types of charges are not considered to have equivalent effect (Veterinary Inspections para 6)
The interstate element (wholly internal rule)
- An individual must have moved, be in the course of moving, or be likely to move between one MS and another, or returning to his / her State of origin after a period of time resident in a host State - If there is no interstate element → national law applies Practical problems: 1) the wholly internal rule can give rise to 'reverse discrimination'; this means that EU citizens who migrate may be in a more favourable position than those who stay at home 2) if the EU is about creating a single market, barriers created internally within an MS should also be removed (Walloon case_ 3) despite the Court's determination to uphold the wholly internal rule, it's been somewhat cavalier in maintaining the orthodoxy in individual cases; - Carpenter suggests that it takes very little movement for EU law to apply - Rottmann "Article 20 TFEU precludes national measures which have the effect of depriving citizens of the Union of the genuine enjoyment of the substance of the rights conferred by virtue of their status as citizens of the Union'
Personal scope / direct effect of establishment Art 49 TFEU
- Article 49 TFEU has vertical direct effect - Article 49 TFEU can ALSO be relied on against private entities who are exercising legal autonomy and who are regulation in a collective manner the free movement of establishment (Viking Line) - Whether art 49 TFEU has full horizontal direct effect is unknown (but unlikely)
Cassis de Dijon and Dassonville connection / comparison
- Dassonville rule → mutual recognition (home state model) - Dassonville para 6 → addition justifications based on public interest - DIFFERENCE between Cassis de Dijon and Dassonville → burden of proof !
MEE's
- Direct and indirect discrimination is always MEEs - Indistinctly applicable product requirements are always MEEs - 'Certain selling arrangements' are not MEEs unless they are directly or indirectly discriminatory
Indirect effect (consistent interpretation)
- Interpretation of national law by national courts in the light, spirit & manner which is consistent with EU law provisions Dansk Industri: para 30-31 Faccini Dori: para 26
Art 34 TFEU: problems!!!
- No minimum threshold ('de minimis') - No actual effects of evidence required (capable ... potentially...) C-67/97 Bluhme - 1980s: traders relied on article 34 TFEU to challenge every regulatory measure 1) Remoteness test (C-69/88 Krantz) 2) Justifications: ECJ accepted justifications even before discussing presence of restriction (C-312/89 Conforama)
Enforecement of EU Law
- Private enforcement: State Liability (Francovich, Köbler) - Public enforcement Infringement procedure Art 258 TFEU = Commission vs MS: - 1) Informal notice - 2) Formal notice - 3) Reasoned opinion (Spanish Strawberries case) - Star Fruit: brought action that the Commission had failed to commence proceedings under art 258 against France; para 11, 12 (Commission has right NOT duty) * Culmination of Breaches: Commission can bring together several different infringements (Irish Waste Case paras 196, 175) Sanctions Art 259 TFEU: * can be ineffective since sometimes non-compliance is a political choice
Grounds of justification (capital)
- Protection of creditors (Trummer and Mayer para 30) - Maintenance of a permanent population and stable economic activity in rural regions (Konle para 40) - Protection of the environment (Reisch para 35) - Preserving agricultural communities (Ospelt para 81)
Keck and Mithouard
- Reversed the Sunday trading cases and laid down a new test - Divided measures into two types: 1) so-called 'product-based' measures (sometimes referred to as 'product requirements'), which concern the inherent characteristics of a product such as designation, form, size, weight, composition, presentation, and labeling 2) measures relating to 'certain selling arrangement' ➢ Restrictions on when goods may be sold ➢ Restrictions on where or by whom goods may be sold ➢ Advertising restrictions ➢ Price controls Rationale: in the absence of discrimination, selling arrangements - such as Sunday trading rules - are less restrictive of free trade than product-bound measures because they do not require traders in other MSs to produce goods to particular specifications just for the MSs in question
Quantitative restrictions (QRs)
- The Court of Justice held that 'the prohibition on quantitative restrictions covers measures which amount to a total or partial restraint of, according to the circumstances, imports, exports or goods in transit Total restraint: - An import or export ban (e.g. total prohibition of exports/ imports) Partial restraint: - A system if import or export quotas (e.g. certain amount of exports / imports per year)
Harmonization Art 114 TFEU
1) A residual provision: it can only be used if other legal bases are not available 2) The procedures under art 114 TFEU is the ordinary legislative procedure: means majority voting in the Council 3) Art 114 TFEU allows the EU to adopt 'measures': the legislature has the discretion to choose the legal instrument most suitable for the issue in hand + it is not bound to employ only directives 4) The measures adopted must have as their object the establishment and functioning of the internal market 5) Art 114 TFEU only gives the power for 'the approximation of the provisions laid down by law, regulations or administrative action in MSs' Tobacco Advertising: - Art 114 TFEU does not provide a general power to regulate the economy → this would go against the very idea of the EU with limited powers - Measures adopted under art 114 TFEU must seek either to establish the internal market or to improve its functioning → either the measure must eliminate obstacles or it must deal with appreciable distortions of competition
Comptences
1) Exclusive: art 3 TFEU 2) Shared: art 4 TFEU (biggest group) 3) Supporting: art 6 TFEU
Public interest justifications (services)
1) Gouda / Para 13 - If the application of the national legislation to foreign persons providing services is not justified by overriding reasons relating to the public interest or if the requirements embodied in that legislation are already satisfied by the rules imposed on those persons in the Member States in which they are established 2) Centros / Paras 35, 38, 29, 30, 26, 24
The burden and standard of proof
1) It is not sufficient for States merely to assert the relevance of a public interest objective to defend a contested national measure - Generalization will not be enough to meet the required standard of proof → States must present evidence to support and demonstrate the veracity of their claim 2) Evidence must be sufficiently precise in order to substantiate the arguments submitted
The structure of free movement law
1) Jurisdiction: Does EU law apply to this case? - Is there applicable harmonisation (Is there secondary (national) law providing harmonization?) - If not: is there a cross-border effect (Cross-border effect: generally required to activate free movement law) Why? Treaty freedoms are not intended to regulate the relationship between private parties and their own MS - Purely international situations are not covered by EU law * Rule of thumb: is the dispute confined in all respects within a single MS Reverse discrmination is allowed ➢ ECJ is usually very flexible in finding a cross-border effect as long as there is SOE EU interest in case (Ullens de Schooten v. Belgium paras 50-55) 2) Material scope (scope): Which fundamental freedom is applicable 3) Direct effect and personal scope (scope): Can the claimant invoke the freedom against the defendant 1) Can the claimant rely on the freedom against the defendant?- ANY claimant can rely on EU law 2) Can the claimant rely on the freedom against the defendant? - All fundamental freedoms have vertical direct effect - Not all freedoms have horizontal direct effect 4) Restriction (substantive test): Is there a restriction to the freedom? 3 types of potential restrictions: - Direct discrimination: in law - Indirect dicrimination: in fact - Non-discriminatory trade obstacles: does a measure make it more difficult or less attractive to exercise free movement rights ? 5) Justification (substantive test): Is there a ground of justification? (Barnard & Peers p.481) - Is the national measure proportionate? - Proportionality test ➢ Suitability ➢ Necessity - Fundamental rights respected? (C-260/89 ERT)
Types of cross-border effects (services)
1) The service provider moves: -Van Binsbergen 2) The service recipient moves: -Luisi and Carbone (moving to receive health care) - Cowan (moving to receive tourism services) 3) The service itself moves (neither provider nor recipient moves, e.g. streaming, TV subscriptions, etc) - Alpine Investments
Personal scope art 56 TFEU
1) art 56 TFEU can be invoked against MSs: - Covers restrictions by both host state and home state - Carpenter 2) art 56 TFEU can ALSO be invoked against private entities who are exercising legal autonomy and who are regulating in a collective manner the provision of services: - Walrave and Koch - Laval (concerned Swedish labor union (which has a powerful position under Swedish law since they regulate the provision of services) → used Latvian workers whom the union wanted to oblige them to comply with Swedish regulations → Laval refused reasoning with their freedom to provide services → labor union strikes) 3) Whether art 56 TFEU has a full horizontal direct effect is unknown
EU citizens can be
1) economically active (workers, self-employed, service providers 2) semi-economically active (students and persons of independent means) 3) non-economically active (have the right of residence up to 3 months) 4) non-migrant EU citizens (who do not exercise their free movement rights (Rottmann + Ruiz Zambrano for exceptional cases art 20 TFEU)
Economic Union
1) the advantages of a single currency in terms of lower transaction costs, greater transparency, and the elimination of exchange-rate risk are only felt if there is trade and investment, and a single currency can in turn be expected to provide a further boost for them 2) the problem with a single currency is that it reduces flexibility: an individual Member State can no longer respond to economic developments by changing interest rates or the value of its currency 3) free movement of labour assumes a grated significance under a single currency → if one Member State is experiencing fast growth while another is suffering a slowdown, the workers may move from the latter to the former 4) a well-functioning internal market allows the real exchange-rate to work → what this means is that a country whose economy is overheating due to low real interest rates, which result from a centrally set nominal interest rate and a high level of inflation is automatically cooled down
'Special' services
Abortion: Grogan -Is abortion a service? - Does art 56 even apply? → Ireland said no since abortion isn't even a service / para 19 (immoral and concerns the life of a human being) -Does it matter that abortion is prohibited in Ireland? (No, since it is not prohibited in the UK) -What is the cross-border link in this case? Drugs: Joseman (nationality requirement to enter coffee shops) - Is getting high a service? - Services is the dominant freedom in this case → coffee shops constitute a catering activity (therefore this case falls within the scope of art 56 TFEU) - Free movement of cannabis = goods ? - Drugs are prohibited in all Member States (No free movement is possible) - But coffee shops also sell coffee and tea ! Health care - Can you receive reimbursement from your insurance company for healthcare services received abroad - Most insurance companies have prior-authorization systems for healthcare services abroad - Is healthcare a service? What about remuneration? - Does prior-authorization restrict free movement? - Can it be justified? 1) Extramural case (outside hospital care): Kohll 2) Intramural case (within a hospital)
The single market
Advantages of a single market paradigm: - Aligned the Treaty, harmonization and standardization - Left room for experimentation and local differences - It was realistic → measures adopted were passed and mostly achieved by the set date Disadvantages of a single market paradigm: - National authorities were still left guardians of market access, and could deny mutual recognition on the basis of the derogations written in the Treaty
Personal and geographical scope of the capital rules
Against whom can the capital rules be invoked? - Vertical direct effect When can EU invoke the capital rules against its own MSs? - Once a cross-border elements is in place, a national of an MS is free to invoke the Treaty's provisions against their own national authorities
Application of the Charter of Fundamental Rights to the Member States
Akerberg Fransson: The issues concerned whether the principle of ne bis in idem provided in Art 50 Charter applied to proceedings brought against Mr Akerberg Ransson on charges of serious tax offences. Several intervening MSs together with the Commission argued that the Charter was not applicable since the legislation which formed the basis for the proceedings was not implementing EU law - The Court disagree: it found that the tax penalties and the criminal proceedings to which Mr Akerberg was subjected were in part connected to his obligations to declare VAT - The Court found that the tax penalties and the criminal proceedings constitute implementation of EU law and therefore fell within the scope of application of the Charter
Restriction on freedom of establishment Art 49 TFEU
All forms of direct and indirect discrimination: - Kraus (obligation of mutual recognition within the EU → german law student getting a degree in the uk) Other measures which make freedom of establishment less attractive: - Hartlauer (Austrian authorisation for health institution) - Centros (mutual recognition of foreign companies)
Implementing acts Art 291 TFEU
Allows the Commission to provide further detail in relation to the content of the legislative act, in order to ensure that it is implemented under uniform conditions in all MSs Conferral of implementing powers / Neo-Comitology Regulation (provides for two principal supervisory mechanisms): 1) the advisory procedure: - The Commission submits a proposal → the committee gives opinion → Commission proceeds by taking into account the committee's opinion (basically the Commission isn't bound by anything the committee says) 2) the examination procedure: - If the draft implementing act is supported by a qualified majority of the committee, the Commission may adopt it without more - A negative committee opinion prevents the Commission from adopting that measures; it may either submit an amended version of referring the matter to the appeal committee - The Commission may adopt implementing measures in four cases: 1) where the basic act provides it may not do so 2) a simple majority of the component members of the committee oppose the draft measure 3) in certain sensitive policy areas 4) where the measure lays down anti-dumping or countervailing duties Common features - Under both procedures, the Commission submits a draft implementing measure; - In exceptional cases the Commission may override the opposition of an examination committee, where the adoption of the measure is required without delay in order to avoid significant disruption of the markets * The appeal committee: proposal of amendments to a blocked draft by the examination committee
Why competition ?
Art 101 TFEU (prohibition of cartels and anti-competitive agreements) Art 102 TFEU (prohibition of monopolization) - Directly effective Consten and Grundig: - Concerning vertical anti-competitive agreements - Price competition vs Economic freedom - Whether the agreement is capable of constituting a threat, either direct or indirect, causal or potential, to freedom of trade between MS in a manner that might harm the attainment of the objectives of a single market between States.
Internal market
Art 26 TFEU Protocol 27 on the internal market and competition Negative integration: prohibitions in the Treaty directed at MSs and private parties Positive integration: harmonization of legislation to create common rules
Workers
Art 45 TFEU Lawrie - Blum: 'for a certain period of time a person performs services for and under the direction of another person in return for which he recieve remuneration' * Workers also include work-seekers Antonissen: para 21 - time period that they are allowed to stay is up to MSs and must be reasonable
The scope and interpretation of the Charter
Art 52(1) states that limitation on the exercise of Charter rights must 1) Be provided by law 2) Respect the essence of those rights 3) Respect the principle of proportionality 4) Be necessary to meet the objectives of general interest recognized by the Union or the need to protect the rights and freedoms of others Melloni: related to the execution of a European Arrest Warrant. Mr Melloni had been convicted in absentia; he argues inter alia that his conviction in absentia breached his right to fair trial - Question: whether, if the standard of protection afforded by national constitution is higher than that afforded by the Charter, national courts can enforce the former (art 53 Charter) - The court held: paras 59 - 60 It is settled case law that by virtue of the principle of primacy of EU law, which is an essential feature of the EU legal order, rules of national law cannot be allowed to undermine the effectiveness of EU law on the territory of that State. It is true that art 53 Charter confirms that national authorities and courts remain free to apply national standards of protection, provided that the primacy, unity and effectiveness of EU law are not compromised
Internal taxation
Article 110 TFEU All taxation differentiates between products → this is not a problem as long as there is no discrimination against foreign products 1) Prohibition of discriminatory taxation applies if: - the relevant imported product and the relevant domestic product must be similar (A comparison must be made between products which at the same stage of productions have similar characteristics and satisfy the same consumer needs) ➢ Johnnie Walker case: Concerned Danish system of differential taxation which applied to Scotch whiskey and fruit wine of the liquor type. In order to establish whether two products are similar → consider objective characteristics: origin, method of manufacture, organoleptic properties (taste, smell, etc), alcohol content → establish whether the two satisfy the same consumer needs - there must be discrimination 2) Prohibition of protective taxation ◆ Products which are not similar but do 'compete' ◆ MSs tend to tax domestically produced products more favourably than foreign products When do products compete? → Look at characteristics, consumer demand, etc Commission v. Sweden + Commission v. UK
What are services
Article 57 TFEU defines services as a residual category: 'insofar as they are ot governed by the provisions relating to freedom of movement of goods, capital, and persons' - BUT not subordinate to other freedoms (Fidium Finanz) Three constitutive criteria for service provisions: ➢ 1) Service / performance (non-tangible good performed to someone) ➢ 2) Normally provided for remuneration ➢ 3) Temporary nature (Gebhard)
Public enforcement
By the Commission: art 258 TFEU: 1) Formal notice 2) Reasoned opinion 3) Action in front of the Court ◆ Burden of proof ◆ Pacta sunt servanda (no silly defences allowed) ◆ Irrespective of whether the breach has stopped ◆ Cumulation of breaches (C-494/01 Irish Waste) By the MSs art 259 TFEU: 1) Rarely used in outrageous cases 2) Any MS is fully empowered to start procedures under this article Sanctions art 260 TFEU
The role of CoJ
Cases reach CoJ through the preliminary ruling mechanism: conditions for direct access (standing) to the EU Courts to challenge the validity of EU law are strict. Since in most cases there is also a national enforcement element to the case, issues are more often examined by national courts which then decide whether a reference to the CoJ is appropriate ➢ Opinion 2/13: CoJ objected to two elements of the jurisdiction of the ECHR 1) the fact that the ECHR would have jurisdiction over the entire body of EU law, including the Common Foreign and Security Policy (this is because CoJ itself has very limited jurisdiction in such cases) 2) the fact that the EU would be treated similarly to a State party; this would mean ignoring the fact that some of EU secondary legislation is based on the idea of mutual trust between MSs
Goods
Commission v Italy: the Court defined 'goods' as 'products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions'
Implications of the models of market integration
Consequences for sovereignty: 1) Host country control - Likely to impose the fewest constraints on the autonomy of each State to regulate its own affairs → depends on the rule of non-discrimination 2) Harmonized model - Entail a vertical transfer of power from the State level to the EU level - Member States lose their power to regulate their own affairs instead the laws come from the EU 3) Home country control - Involves reassignment of sovereignty between the Member States Institutional consequences 1) Host country control - National legislatures are likely to play a dominant role → has to be noted that courts may be highly influential as well, depending on how the rule of non-discrimination is applied - If overt or direct discrimination is caught → courts influence is likely to be small - If a far-reaching standard that also outlaws indirect or covert discrimination is adopted → the judiciary may become an important factor - The distinction between host and home country control may even evaporate under the glare of non-discrimination rule 2) Harmonized model - EU legislature is the dominant player → BUT not necessarily - Natural way of creating harmonized rules is through central legislature - Judiciary, however, can also engage in harmonization in 2 ways: ➢ it can create a deregulated marker by striking down rules in the name of the four freedoms ➢ it can be more selective and target national rules that differ from a European consensus 3) Home country control - The role of judiciary is likely to be pronounced to ensure that mutual recognition takes place - Mutual recognition standards are set in 2 ways: ➢ which rules are subject to mutual recognition? ➢ mutual recognition is usually subject to exceptions that allow host countries to insist on the application of its own rules Welfare considerations: 1) Host country model - Allows trade to take place → theory tells us that this makes all participants wealthier - Each State is able to set its level of protection accordingly 2) Harmonized model - Brings benefits in terms of economies of scale - Other interests, such as the environment, can also be protected by appropriate rules adopted at the EU level 3) Home country model - Each country will try to attract valuable assets, for example by creating policies designed to encourage inward investment and prevent capital flight Democratic concerns 1) Host country control - Under-inclusive; laws are formulated by the citizens of the host State, or their representatives; they do not take into account the interests of outsiders, such as companies or workers of other Member States, who do not have a voice in the political process of the host country 2) Harmonized model - Vulnerable to the entire gamut of democratic deficit criticism that the EU is regularly subjected to 3) Home country control - It distorts national democracy by favouring capital over workers
Supremacy
Costa v. ENEL - Precedence of EU law over coflictig national law - Supremacy / Primacy of the Union
Principle of proportionality art 5(4) TEU
Demonstrate that: 1) the objective of the measure was not the one the legislature could pursue under the Treaty 2) the objective could be achieved by less intrusive measures
EU citizenship
Derivative in nature (art 9 TEU), but function independently: - can only be acquired by being a national of an MS, therefore EU citizenship derives from national citizenship Key elements: 1) Legal status 2) Equality 3) Rights 4) Identity
Charges of Equivalent Effect (CEEs)
Diamonds case 1) CEE is a pecuniary charge, in other words an obligation to pay a sum of money 2) The charge must be imposed on domestic or foreign goods by reason of the fact that they cross a frontier 3) It is irrelevant that the amount of the charge is minimal (not subject to 'de minimis' rule) 4) The designation and mode of application are also irrelevant; it does not matter how the charge is designated or applied, as otherwise it would be very easy for MSs to circumvent the prohibition 5) The concept of CEEs is not confined to charge imposed for the benefit of the State, but extends to those which finance another entity such as a social fund; CEEs are prohibited independently of any consideration of the purpose for which they were introduced, and the destination of the revenue obtained 6) Charges may constitute CEEs even if they are not discriminatory or protective; a charge imposed on both imports and exports can be a CEE 7) The Court has consistently held that the prohibition of customs duties and CEES constituted a fundamental rule which does not permit of any exceptions
Restriction of capital
Direct and indirect dicriminatory on the grounds of nationality, residence and location of capital - Konle (prior authorisation for real estate investment only for foreigners) - Servatius (prior authorisation only for investments in construction projects abroad) Non discriminatory to free movement of capital - Commission v. Netherlands para 23 (Golden shares KPN) - In respect to taxation, the Court seems unwilling to go beyond direct and indirect discrimination (Kerckhaert & Morres)
Direct effect VS Direct applicability
Direct effect: individuals can rely on provisions of Community Law before national courts and administrators Direct applicability: transpositing or further implementation is unnecessary *not all directly applicable instruments are directly effective
Establishing a breach
Discrimination approach: 1) Direct discrimination - Factortame (Under the British Merchant Shipping Act 1988 a fishing vessel could be registered and entitled to fish in UK waters only if a) the vessel was British-owned, b) the vessel was managed and its operations directed and controlled within the UK, c) any charterer, manager or operator of the vessel was a qualified British person or company, - The Court found that these rules breached art 49 TFEU and could not be justified 2) Indirect discrimination (applies to all but disadvantages only a certain branch) Restrictions / market access approach: 1) Rules which are non-discriminatory but nevertheless hinder market access - Alpine Investments (Concerned a Dutch rule prohibiting cold-calling by the Durch financial services industry both within and outside the Netherlands; 'Directly affects access to the markets in services in the other MSs and is thus capable of hindering intra-Union trade in services') - Sager / Para 12 ('National rules which are liable to prohibit or otherwise impede the activities of a provider of services' breach the Treaty unless they can be justified by the MSs ad shown to be proportionate) - Gebhard / Para 37 ('National rules which are liable to hinder or make less attractive the exercise of fundamental freedoms' breach the Treaty unless they can be justified by the MSs ad shown to be proportionate) - Skandia / Para 26 ( Art 56 TFEU precludes the application of any national legislation which has the effect of making the provision of services between MSs more difficult than the provision of services purely within one MS - Commission v. Italy (Motor insurance) / Para 66
Freedom to provide services
Gebhard: the Court said the temporary nature of the provision of services is to be determined in light of its duration, regularity, periodicity, continuity
Philosophies of market integration
Host state (negative): - only prohibition of discrimination - the rules of the country where the economic activity takes place apply Home state (negative): - forced recognition of each other's standards (Cassis de Dijon) - the rules that applies to any given product or input is the rule of its country of origin, not the rule of the country where it is sold Harmonization (positive): - common rules (Tobacco Advertising 1 - the key case on the scope of Art 114 TFEU para 97, 99) - for each issue there is only one rule which has been produced by the EU - all products and factors of production must comply with it, but can be sold and bought freely in the territory of the entire Union Compare with Cassis de Dijon: what role for public health in EU law? Compare with Tobacco Advertising II: what are the limits of article 114 TFEU?
Italian Trailers
In the Trailers c ase an Italian rule prohibited motorcycles, mopeds, bicycles etc. from pulling trailers thus there was effectively a ban on a certain type of trailer. The ECJ found that the rule did not discriminate with regard to origin but in fact only imports were affected as no trailers were manufactured in Italy. The ECJ identified three situations where a rule could be regarded a MEE: 1) Where the object/effect of the measure is to treat products from other member states less favourably than domestic products. 2) When a measure requires goods lawfully made in another member state to meet another condition even if it applies to all products indiscriminately. 3) Any other measure which hinders the access of products originating in other member states to the market.
Customs Union
Internal dimension: Abolishment of all customs duties INTERNALLY and charges having equivalent effect (art 28 and 30 TFEU) - Also for third country goods (art 28(2) and 29 TFEU) External dimension (established by the EU) - Common customs tariff (art 31 TFEU) - Common commercial policy (art 207 TFEU)
Economic Activity
Jundt: - The activity must not be provided for anything for article 56 TFEU to apply, albeit that there is no need for the service provider to be seeking to make a profit Baumbast: - The Treaty does not require that citizens of the Union pursue a professional or trade activity, whether as an employed or self-employed person, in order to enjoy the rights provided in Part II of the TFEU on the citizenship of the Union - In the case of citizens wishing to exercise their rights under article 21 TFEU, it is sufficient that they merely hold the nationality of one of the **In the case of citizens wishing to exercise their rights under article 21 TFEU, it is sufficient that they merely hold the nationality of one of the MSs; unlike individuals, which to invoke articles 45, 49 and 56 TFEU, they need to be engaged in an economic activity
Fundamental rights as general principles of Union law apply first and foremost as a limit to the acts of the Union institutions
Kadi: Resolution 1390(2002) adopted after terrorist attacks, which requires States to freeze the assets of those entities and individuals identified by the UN Sanctions Committee as being connected with Osama bin Laden, al-Qaeda, or the Taliban - Mr Kadi challenged the freezing of his assets in front of the EU Courts on two grounds: 1) there was no competence for the EU to adopt those measures 2) those measures breached his fundamental rights 'The obligation imposed by an international agreement cannot have the effect of prejudicing the constitutional principles of the EC Treaty, which include the principle that all EU acts must respect fundamental rights, that respect constituting a condition of their lawfulness which it is for the court to review in the framework of the complete system of legal remedies established by the Treaty
Special legislative procedure
Legislator: The Council is, in practice, the sole legislator. The European Parliament is required to give its consent to a legislative proposal or be consulted on it. Right of legislative initiative: The European Commission Types of procedures: Consent: the European Parliament has the power to accept or reject a legislative proposal by an absolute majority vote, but cannot amend it Consultation: the European Parliament may approve, reject or propose amendments to a legislative proposal Legal base: Article 289(2) of the Treaty on the Functioning of the European Union. Rules: The treaties do not give a precise description of special legislative procedures. The rules are therefore defined ad hoc, on the basis of the relevant treaty articles.
The ordinary legislative procedure art 294 TFEU
Legislators: The Council of the EU and the European Parliament Right of legislative initiative: The European Commission Legal base: Articles 289 and 294 of the Treaty on the Functioning of the European Union "Emergency break" A supplementary procedure to allow a single MS to call a 'time-out' during the adoption procedure and have the question referred to the European Council for a period of reflection. This may only be applied when an MS considers that the legislation being proposed would affect important or fundamental aspects of its existing national system.
Estoppel argument
MS canot benefir from failure to implement - stopped from invoking failure as defence If an MS has failed to implement the directive it cannot rely on its failure to do so as defence agaist the individual who wished to invoke the directive * MS must first transpose the directive into national law before it can be enforced agaisnt individuals
What is capital
No definition in the Treaty: - The Court refers to Directive 88/361 Financial transactions concerned with investments, including: - Direct investment - Real estate investment - Acquisition and transfer of shares, other securities bonds - Receipt of share dividends - Provision of loans Scope of application - Cross-border element is required (Unlike all the other freedoms, not only movements between MSs but also third countries) - Result: non-EU citizens or companies can rely on art 63 TFEU against restrictions between MS and a third country
Article 36 TFEU (justifications)
Para 62 Italian Trailers case !!! Mandatory requirements: grounds of justification not mentioned in art 36 TFEU (so-called judicial activism) - First appeared in Cassis de Dijon → public interest exceptions: 1) the prevention of tax evasion 2) the prevention of unfair competition 3) consumer protection - Others: environmental protection, improvement of working conditions fundamental rights
Delegated acts Art 290 TFEU
Particular type of measure which the Commission adopts under art 290 TFEU Non-legislative acts of general application which supplement or amend on-essential aspects of the legislative act / quasi-legislative measures Forms of supervision: 1) branch of the legislature may revoke the delegation 2) prevent entry into force of individual delegated acts (right of objection)
Principle of conferral
Principle underlying the division of competences between the Union and the MSs (art 1 TEU) * refers to competences
Horizontal Direct effect
Private entity against another private entity (Marshall, Facinni Dori) -> prohibited Faccini Dori: - binding nature of the directive exists only in relation to MS it is addressed to - directives can bind MSs only, it is not possible to place obligations on individuals, which have immediate effect Marshall: - para 48 'the binding nature of a Directive ... exists only in relation to each MS to which it is addressed' - legal certainty - refers to Estoppel argument
Indirect Direct effect
Private party against private party (Von Colso and Kamann) -> once a horizontal direct effect isn't enforceable
Reverse Vertical Direct effect
Public authority against a private party (Kolpinghuis para 9) -> prohibited
Direct effect: secondary law
Regulations (Leonesio, Munõz) Decisions (Grad) Directives (Van Duyn, Marshall, Von Colson & Kamann)
EU nationality
Rottmann: - Acquired German nationality after losing Austrian nationality when moving to Germany - German authorities tried to deprive him of his German citizenship after discovering his past (fraud investigation) - The Court held that where a matter fell within the competence of the MS in situations covered by European Union law the national rules had to have regard for EU law - Situations depriving of EU rights fall within the ambit of European Union law
Digital Single Market
Seeks to achieve 3 things: - Improve access to digital goods and services - Create a regulatory environment favourable to digital networks and services - Use digitalization as a driver for growth
Which situations are covered by establishment
Self-employed natural persons: - Persons working outside a hierarchical relationship - They carry the financial risk of the success of their business - They are directly paid for their work Cross-border situations in art 49 TFEU: - Starting a company in another MS - Transferring a company from one MS to another (Case 81/87 Daily Mail) - Establishing a subsidiary in another MS
Cases in which the Charter does not apply
Siragusa: Mr Siragusa made modifications to building in a conservation area and then applied for retrospective planning permission - Question: were conservation rules in Italy compatible with Art 16 Charter guaranteeing the right to property? - Para 25-26: In order to determine whether national legislation involves the implementation of EU law for the purposes of Art 51 of the charter, some of the points to be determined are whether that legislation is intended to implement a provision by EU law; the nature of that legislation and whether it pursues objectives other than those covered by EU law, even if it is capable of indirectly affecting EU law; and also whether there are specific rules of EU law on the matter or capable of affecting it - In particular, the Court has found that fundamental EU rights could not be applied in relation to national legislation because the provisions of EU law in the subject are concerned did not impose any obligation on MSs with regard to the situation at issue in the main proceedings
The common market
Spaak Report: argued for the merger of separate national markets into a common market to arrest and to reserve the perceived international decline of Europe 3 sets of actions were proposed: 1) National protections creating obstacles to trade had to be suppressed (this involved the abolition of customs duties and quotas as well as those national regulations that resulted in the practical elimination or control of foreig competition); 2) Distortions of competitions needed to be dealt with; 3) Conditions for common growth had to be ensured by helping underdeveloped regions by assisting business in adjusting to competition and modern production methods, and by freeing circulation of factors of productions
Principle of subsidiarity
The subsidiarity test: 1) Negative condition (necessity test): the objectives of the proposed action cannot be sufficiently achieved by the MSs, either at central level or regional and local level 2) Positive condition: by reason of the scale or effects of the proposed actions the Union objectives can be better achieved at Union level Protocol No2 "the early warning mechanism": designed to allow national parliaments to ensure Union legislation coplies with subsidiarity test
Yellow card procedure
The yellow card procedure is a procedure under which the national parliaments of EU Member States can object to a draft legislative act on grounds of the principle of subsidiarity. Under Article 5(3) and Article 12(b) of the Treaty on Economic Union, national parliaments monitor compliance with the principle of subsidiarity in accordance with the procedure set out in Protocol (No 2) on the application of the principles of subsidiarity and proportionality.
Does Union law apply at all?(free movement provisions)
Three significant limitations on the application of the free movement provisions (if one of those conditions isn't satisfied - EU law will not apply): 1) Hold the nationality of a Member State 2) Have moved to another MS (interstate element) 3) Have been, or are, engaged in some economic activity in the MS they have moved to (incase of article 45,49, and 56 TFEU)
Types of harmonization
Total harmonization: - takes place when an EU measure, such as a directive, regulates something exhaustively, not leaving any room for divergent rules of the MSs → given the MSs have to transpose directive into their national law - a national rule that complies with an EU measure totally harmonizing something may o longer be open to challenge on the basis of the four freedoms of the Treaty - NOT immune to legal scrutiny → a challenge could be brought that it violates a higher ranking rule or principle of EU law Minimum harmonization - often been used in issues such as the protection of the environment or consumers, where some MSs wishes to impose or maintain tougher rules than the others - any national rule would be open to challenge on the ground that it violates a Treaty free movement provision
Charges imposed at the internal boundaries of MSs
Triggering factor - border crossing: Lancry case + Carbonati Apuani - Overseas territories; - Internal borders The Court stated that internal market is an area without internal frontiers without drawing any distinction between interstate frontiers and frontiers within a State-
Article 110(2) TFEU: competing products
Two conditions have to be met for the prohibition to apply: 1) The imported product and the domestic product must be in competition with one another 2) The tax must protect the domestic products Leading case: Commission v. UK (wine and beer saga) 1) the volume of beverage 2) the alcoholic strength 3) the price of the products
Special case of taxation
Under public international law of taxation MSs remain free to identify: - The tax base - The tax rate - How they wish to administer, assess, collect and recover tax - The tax unit
Discrimination
◆ Direct discrimination: arises when the tax scheme differentiates explicitly o the basis of the origin of products (e.g. when only imports are subject to tax) ◆ Indirect discrimination: arises when the tax schee does not explicitly differentiate by reason of the origin of prodcuts, but in fact iposes a heavier tax burden on imported products ➢ Humblot: where an individual challenged the French annual road tax on cars
Dassonville's 'pathological endgame'
● Is it a problem that almost every national measure is within the ambit of the rule ● What if there is insufficient evidence of suitability and necessity of justifications ● Is the free movement of goods intended to ban all irrational legislation
