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EU LAW I – Prof. De Mestral Fall 2004

1. HISTORY AND NATURE OF EC LAW.........................................................71.1 INTRODUCTION.......................................................................................................71.2 DEFINITION OF EC LAW – DEVELOPMENT OF TREATIES...................................................71.3 HISTORICAL DEVELOPMENT FROM EC AND MAASTRICHT TREATY......................................81.4 THE NATURE OF THE EC AS AN ‘INSTITUTION’ – DOES THE CLASSIC MODEL OF INTERGOVERNMENTAL ORGANIZATIONS APPLY TO THE EC?..................................................101.5 ECONOMIC GOALS ARE ENSHRINED IN THE ECONOMIC UNION..........................................111.5 THE NATURE OF THESE ECONOMIC AND POLITICAL OBLIGATIONS.....................................11

2. EC INSTITUTIONS................................................................................132.1 INTRODUCTION.....................................................................................................132.2 EUROPEAN COMMUNITY BODIES...............................................................................132.3 DERIVATION OF THE POWERS OF THE INSTITUTIONS.....................................................18

3. SCOPE OF COMMUNITY POWERS..........................................................213.1 INTRODUCTION.....................................................................................................21

4. COMMUNITY LEGISLATION AND POLICY-MAKING...................................244.1 INTRODUCTION.....................................................................................................24

5. NATURE AND EFFECT OF EC LAW.........................................................295.1 INTRODUCTION.....................................................................................................295.2 DIRECT EFFECT OF TREATY PROVISIONS....................................................................29

Case 26/62 van Gend en Loos (1963).................................................................30Case 2/74 Reyners v. Belgium (1974).................................................................30

5.3 DIRECT EFFECT OF REGULATIONS AND DECISIONS.......................................................31Case 39/72 Commission v. Italy (1973)..............................................................31Case 50/76 Amsterdam Bulb BV (1977)..............................................................31Case 9/70 Franz Grad (1970)..............................................................................32Reasoning:..........................................................................................................32

5.4 INTERNATIONAL TREATIES.......................................................................................32Cases 21-24/72 International Fruit Co. (1972)....................................................32Case 41/74 Van Duyn v. Home Office (1974) (Art. 39, 234, 249)........................33Marshall (No.1) (1986)........................................................................................33Marleasing SA (1990) (Art. 10 & 249).................................................................34CIA Security........................................................................................................34

6. SUPREMACY PRINCIPLE.......................................................................366.1 INTRODUCTION.....................................................................................................366.2 SUPREMACY OF EC LAW FROM THE ECJ’S PERSPECTIVE...............................................36

van Gend en Loos (1963) (Art. 5, 7, 249 & 25 DE)..............................................36Flaminio Costa v. ENEL (1964) (Art. 10, 12, 234)................................................36Internationale Handelsges.m.b.H. (1970)...........................................................37Simmenthal SpA (1978)......................................................................................37Larsy v. INASTI....................................................................................................37R.v. Secretary of State for Transport, ex parte Factortame (1990).....................37

6.3 SUPREMACY OF COMMUNITY LAW FROM THE PERSPECTIVE OF THE MEMBER STATES..........37Internationale Handelsges. m.b.H. [1972] CMLR 177.........................................38Solange I decision (1974, BVerfG)......................................................................38Solange II decision (qualified Solange I a bit).....................................................38Brunner v. The European Union Treaty [1994] 1 CMLR 57..................................38Shields v. Coomes..............................................................................................39Macarthys v. Smith.............................................................................................39

7. FUNDAMENTAL HUMAN RIGHTS...........................................................407.1 INTRODUCTION.....................................................................................................407.2 FUNDAMENTAL RIGHTS AND GENERAL PRINCIPLES AS BINDING ON COMMUNITY.................40

Bereczky – McGill Law1

EU LAW I – Prof. De Mestral Fall 2004Brunner Case [1994] – Fed Con Crt Germany.....................................................40International Hangdelsgellschaft [1970].............................................................41

7.3 SOURCES OF FR DERIVED BY THE ECJ......................................................................41Nold v Commission [1974]..................................................................................41Hauer v Land Rheinland-Pfalz [1979].................................................................42AM & S [1982]....................................................................................................42

7.4 STANDARD OF PROTECTION FOR EU FR....................................................................427.6 DO GENERAL PRINCIPLES OF COMMUNITY LAW BIND MEMBER STATES?.............................43

Johnston v Chief Constable [1986]......................................................................44Kent Kirk.............................................................................................................44Wachauf v Germany [1989]................................................................................44Cinetheque.........................................................................................................45Familia Press......................................................................................................45

7.7 FR AND ROLE OF POLITICAL INSTITUTIONS..................................................................467.8 CHARTER OF FUNDAMENTAL RIGHTS.........................................................................46ACCESSION TO THE ECHR............................................................................................47

Opinion on Accession to ECHR [1996]................................................................478. GENERAL PRINCIPLES..........................................................................48

8.1 INTRODUCTION.....................................................................................................48Matthews............................................................................................................48

8.2 GENERAL PRINCIPLES OF EC LAW.............................................................................48R v Minister for Agriculture [1990]......................................................................49Mulder [1988].....................................................................................................49

9. ENFORCEMENT OF EC LAW AGAINST MEMBER STATES..........................509.1 INTRODUCTION.....................................................................................................50

Article 226 (Enforcement Procedure)..................................................................509.2 OPERATION OF THE PROCEDURE..............................................................................509.3 DISCRETION OF THE COMMISSION.............................................................................529.4 ADMISSIBILITY OF ENFORCEMENT AFTER BREACH IS REMEDIED........................................539.5 TYPES OF BREACHES BY MS OF COMMUNITY LAW.......................................................549.6 STATE DEFENCES IN ENFORCEMENT PROCEEDINGS......................................................549.7 ART. 227...........................................................................................................549.8 INTERIM MEASURES...............................................................................................54

10. PRELIMINARY RULINGS......................................................................5510.1 INTRODUCTION...................................................................................................55

Art 234 (Preliminary Ruling Procedure)..............................................................5510.2 THREE TYPES OF PRELIMINARY RULING PROCEDURE....................................................5510.3 PROVISIONS WHICH CAN BE REFERRED....................................................................5510.4 THE COURTS OR TRIBUNALS TO WHICH ARTICLE 234 APPLIES.......................................56

C.Broekmeulen, case 260/80..............................................................................5610.5 THE EXISTENCE OF A QUESTION: THE DEVELOPMENT OF PRECEDENT..............................56

Da Costa, case 28-30/62.....................................................................................57CILFIT, case 283/81............................................................................................57International Chemical Corporation case 66/80..................................................57Firma Foto-Frost, case 314/85............................................................................57

10.6 THE EXISTENCE OF A QUESTION: THE ‘ACTE CLAIR’ DOCTRINE......................................58CILFIT case 283/81.............................................................................................58

10.7 THE EXISTENCE OF A QUESTION: THE DEVELOPMENT OF A MORE HIERARCHICAL JUDICIAL SYSTEM.....................................................................................................................5810.8 THE DECISION TO REFER: THE NATIONAL COURTS’ PERSPECTIVE....................................59

H.P. Bulmer v. J. Bollinger case [1974] 2 WLR 202.............................................59Samex case [1983] 1 All ER 1042.......................................................................59R. v. Plymouth Justices [1982] 3 WLR 1..............................................................59

10.9 WHEN WILL THE ECJ ACCEPT REFERRALS?..............................................................59Firma C. Schwarze, case 16/65...........................................................................60


EU LAW I – Prof. De Mestral Fall 2004Costa case 6/64..................................................................................................60Simmenthal, case 35/76.....................................................................................60

10.10 THE REFERENCE TO THE ECJ: THE FOUNDATIONS OF THE COURT’S AUTHORITY OVER THE CASES REFERRED TO IT................................................................................................60

Pasquale Foglia case 104/79..............................................................................60Pasquale Foglia case 244/80..............................................................................60

10.11 THE REFERENCE TO THE ECJ: DEVELOPING CONTROL OVER THE ARTICLE 234 PROCEDURE...............................................................................................................................61

Lourenco Dias, case C-343/90............................................................................61Telemarsicabruzzo, case C-320-322/90..............................................................61

11. REVIEW OF LEGALITY........................................................................6211.1 INTRODUCTION...................................................................................................6211.2 RANGE OF REVIEWABLE ACTS UNDER 230...............................................................6211.3 PRINCIPLE OF STANDING UNDER ART. 230..............................................................6311.4 ART. 230(4): GENERAL STANDING RULES FOR NON-PRIVILEGED APPLICANTS..................6311.4 STANDING FOR NON-PRIVILEGED APPLICANTS IN PARTICULAR AREAS...............................65

Metro, case 26/76...............................................................................................6511.5 ART. 230: DIRECT CONCERN................................................................................6611.6 ACTION OF DAMAGES..........................................................................................66

11.5 APPLICATION OF EC LAW – REMEDIES IN NATIONAL COURTS..............6711.5.1 INTRODUCTION................................................................................................6711.5.2 THE BASIC PRINCIPLE OF NATIONAL PROCEDURAL AUTONOMY....................................67

Rewe-Zentralfinanz (1976).................................................................................67Rewe Handelsgesellschaft (1981) (Art. 234) (Purchase of tax free butter under German law were contrary to EU law & sought remedy for econo interests)......67San Gorgio..........................................................................................................67

11.5.3 REQUIREMENTS IMPOSED BY EC LAW...................................................................68Saguolo (1977) (Art. 12 National treatment)......................................................68Von Colson (1984)..............................................................................................68R. v. Secretary of State for Transport (1990)......................................................68Dekker (1990)....................................................................................................68Emmott v. Minister for Social Welfare (1991).....................................................69Marshall (No.2) (1993)........................................................................................69Steenhorst-Neerings...........................................................................................69R.. v. Secretary of State for Social Security........................................................69Metallgesellschaft & Hoechst..............................................................................69Van Schijndel......................................................................................................70Kraaijeveld..........................................................................................................70Dionysios Diamantis...........................................................................................70Edis.....................................................................................................................70Levez..................................................................................................................70

11.5.4 THE PRINCIPLE OF (STATE) LIABILITY FOR BREACH OF EC LAW..................................70Francovich v. Italy (1991)...................................................................................70Brasserie du Pecheur v. Germany (1996)...........................................................71

12. FREE MOVEMENT OF GOODS: DUTIES, CHARGES AND TAXES...............7312.1 INTRODUCTION...................................................................................................7312.2 ABOLITION OF CUSTOMS DUTIES AND CHARGES WITH EQUIVALENT EFFECT (ART. 23-25)...7312.3 DISCRIMINATORY TAX PROVISIONS (ART. 90-93).......................................................7412.4 TAXATION..........................................................................................................7712.5 BOUNDARY BETWEEN ARTICLES 23-25 AND 90-93...................................................77

13. FREE MOVEMENT OF GOODS: QUOTAS AND OTHER.............................79QUANTITATIVE RESTRICTIONS.................................................................79

13.1 INTRODUCTION...................................................................................................79Article 28............................................................................................................79


EU LAW I – Prof. De Mestral Fall 2004Article 29............................................................................................................79Article 30............................................................................................................79

DIRECTIVE 70/50 AND DASSONVILLE..............................................................................79Dassonville, case 8/74........................................................................................80

13.2 DISCRIMINATORY BARRIERS TO TRADE.....................................................................80Commission v. Ireland case 249/81....................................................................80Commission v. UK case 207/83...........................................................................80Commission v. Ireland, case 45/87.....................................................................80Van Tiggele, case 82/77.....................................................................................81Schloh case 50/85..............................................................................................81

13.3 JUSTIFYING DISCRIMINATORY BARRIERS TO TRADE: ARTICLE 30...................................81Henn and Darby case 34/79:..............................................................................82Conegate case 121/85........................................................................................82Cullet case 231/83..............................................................................................82Campus Oil case 72/83.......................................................................................82Sandoz BV case 174/82......................................................................................83

13.4 INDISTINCTLY APPLICABLE RULES: CASSIS DE DIJON....................................................83Rewe-Zentrale AG case 120/78 (Cassis de Dijon)...............................................83

13.5 INDISTINCTLY APPLICABLE RULES AND ARTICLE 29.....................................................84Groenveld case 15/79.........................................................................................84

13.6 INDISTINCTLY APPLICABLE RULES: THE LIMITS OF ARTICLE 28.......................................84Cinétèque (1985)................................................................................................84Torfaen BC v. B&Q case 145/88..........................................................................84Criminal Proceedings against Keck, case C-267-268/91.....................................85Familiapress case C-368/95................................................................................85Konsumentombudsmannen case C-34-36/95.....................................................85Gourmet International Products, case C-405/98.................................................86TK-Heimdienst, case C-254/98............................................................................86

13.7 INDISTINCTLY APPLICABLE RULES: THE MANDATORY REQUIREMENTS...............................86Commission v. Germany case 178/84.................................................................87Commission v. Germany, case 178/84................................................................87Commission v. Denmark case 302/86.................................................................87

13.8 BROADER PERSPECTIVES ON CASSIS.......................................................................8813.9 CONCLUSION......................................................................................................89

14. FREE MOVEMENT OF WORKERS AND PEOPLE......................................9014.1 INTRODUCTION...................................................................................................90

Art. 39 (ex 48)....................................................................................................90Roman Angonese v. Cassa di Riparmio di Bolzano SpA (2000)...........................90

14.2 DEFINITION OF “WORKER”....................................................................................91Levin v. Staatssecretaris van Justitie (1982).......................................................91Steymann v. Staatsecretaris van Justitie (1988).................................................91

14.3 INDIVIDUALS SEEKING WORK..................................................................................92R. v. Immigration Appeal Tribunal, ex parte Antonissen (1991)..........................92

14.4 DISCRIMINATION.................................................................................................93Groener v. Min. of Education (1989)...................................................................93

14.5 PUBLIC SERVICE EXCEPTION..................................................................................9414.6 FORMAL REQUIREMENTS FOR WORKERS...................................................................9414.7 SCOPE OF ARTICLE 39: IMPEDIMENT TO MARKET ACCESS AND WHOLLY INTERNAL SITUATION...............................................................................................................................9514.8 SUBSTANTIVE RIGHTS AND SOCIAL ADVANTAGES........................................................9614.9 EDUCATION.......................................................................................................9714.10 CITIZENSHIP.....................................................................................................98

15. FREEDOM OF SERVICES AND RIGHT TO ESTABLISHMENT...................10015.1 INTRODUCTION.................................................................................................10015.2 PERSONS, SERVICES, AND ESTABLISHMENT: DIFFERENCES AND COMMONALITIES.............100

Gebhard case C-55/94......................................................................................100


EU LAW I – Prof. De Mestral Fall 2004SECONDARY LEGISLATION GOVERNING ENTRY AND RESIDENCE............................................101

Directive 73/148...............................................................................................101THE ‘OFFICIAL AUTHORITY’ EXCEPTION...........................................................................101

Reyners v. Belgium, case 2/74.........................................................................101ARE THE FREEDOMS HORIZONTALLY APPLICABLE?............................................................101

Walrave and Koch, case C-281/98....................................................................101Wouters, case C-309/99...................................................................................101

15.3 THE RIGHT OF ESTABLISHMENT............................................................................102Art 43 EC..........................................................................................................102

THE EFFECT OF ARTICLE 43........................................................................................102Reyners, case 2/74...........................................................................................102Thieffry, case 71/76..........................................................................................102Heylens, case 222/86.......................................................................................102Vlassopoulou, case 340/89...............................................................................102Council Directive 89/48:...................................................................................103

LEGISLATIVE HARMONISATION AND MUTUAL RECOGNITION OF QUALIFICATIONS.......................103THE SCOPE OF ART 43..............................................................................................103

Commission v. Belgium, case 221/85...............................................................103Klopp, case 107/83...........................................................................................103Gebhard, case C-55/94.....................................................................................103Knoors, case 115/78.........................................................................................104Bouchoucha, case C-61/89...............................................................................104Meussen, case C-337/97...................................................................................104Commission v. Italy, case 63/86.......................................................................105

15.4 ESTABLISHMENT OF COMPANIES...........................................................................105Art 48 EC:.........................................................................................................105Commission v. France case 270/83..................................................................105R. v. HM Treasury, ex parte Daily Mail, case 81/87...........................................105Centros, case C-212/97....................................................................................105

15.5 FREE MOVEMENT OF SERVICES.............................................................................106Art 49 EC..........................................................................................................106Art 50...............................................................................................................106Gebhard, case C-55/94.....................................................................................106Van Binsbergen, case 33/74.............................................................................106

SCOPE OF ARTICLE 49...............................................................................................107Debauve, case 52/79........................................................................................107Luisi and Carbone, case 286/82 – 26/83...........................................................107Deliège, case C-51/96.......................................................................................107Belgium v. Humbel, case 263/86......................................................................107Kohll, case C-158/96.........................................................................................107Geraets-Smits/Peerbooms case C-157/99.........................................................107Koestler, case 15/78.........................................................................................108Grogan, case C-159/90.....................................................................................108Schindler, case C-275/92..................................................................................108Commission v. Italy, case 63/86 (1988)............................................................108Cowan, case 186/87.........................................................................................108

JUSTIFYING RESTRICTIONS ON THE FREE MOVEMENT OF SERVICES........................................108Lawyers’ Services, case 427/85........................................................................109Alpine Investment, case C-384/93....................................................................109

16. PUBLIC POLICY, SECURITY AND HEALTH DEROGATIONS.....................11016.1 INTRODUCTION.................................................................................................110

Directive 64/221...............................................................................................11016.2 THE DISCRETION OF THE MEMBER STATES..............................................................110

Van Duyn v. Home Office, 1974. case 41/74...................................................110Adouri and Cornuaille, case 115-116/81...........................................................111Rutili, case 36/75..............................................................................................111Bonsignore, case 67/74....................................................................................111


EU LAW I – Prof. De Mestral Fall 2004Bouchereau, case 30/77...................................................................................111Royer, case 48/75.............................................................................................112Pecastaing, case 98/79.....................................................................................112Yiadom, case C-357/98.....................................................................................112

17. EQUAL PAY OF MEN AND WOMEN.....................................................113Art 141 EC........................................................................................................113Defrenne v. Sabena,1976, case 43/75..............................................................113Schroeder, 2000, case C-50/96.........................................................................114



PART I: EU INSTITUTIONS, LAW-MAKING, JUDICIARY AND FUNDAMENTAL PRINCIPLES

1. HISTORY AND NATURE OF EC LAW

1.1 Introduction

Themes:

Regional Integration: common worldwide, but European manifestation unique b/c so extensive.

Institution Building: need institutions to support the integration. How effective are these institutions?

Rule of Law: expand market through law-making. Using rule of law to build new community.

Supranationality: voluntary creation of institutions that are above nation-state, and have supremacy over national law.

Constitution: text of unifying values that can be understood by average person. Involves codification, but also ongoing interplay of strength of various members.

1.2 Definition of EC Law – Development of Treaties

Three pillars: 1. Economic pillar (TEC)2. Foreign policy (TEU)3. Justice & home affairs (immigration, policy cooperation, border controls) (TEU)

First Pillar: Treaty of the European Community (TEC) Treaty of Rome, (1957) Started as limited economic union based on customs union (free movement of

goods and coordinated border), and later also included monetary union and economic union.

Included France, Germany, Italy, Luxembourg, Belgium, Netherlands

Second & Third Pillars: Treaty of the European Union (TEU)Maastricht Treaty of EU (1993), w/ amendments by Amsterdam (1997) and Nice (2000) Treaties Maastricht Treaty created second and third pillars Amsterdam Treaty amended Maastricht treaty to more closely link third pillar w/

second pillar Nice Treaty did not change nature and structure of second and third pillars.

Notes: First pillar most supranational in nature, second most resembles international law,

and third is hybrid of the two. Now engaged in process to merge 2 treaties.

Three conflicting visions of community:1. French vision of European superstate, w/ ultimate power at Community

level.2. German federal vision of loose federation w/ respect for national

decision making and only some powers reserved exclusively for the community


EU LAW I – Prof. De Mestral Fall 20043. British vision of looser, mostly economic association w/ deep respect

for sovereignty

1.3 Historical Development from EC and Maastricht TreatyIn many ways the Maastricht treaty is the final step in the process begun in the 1950s.

Proposals began after WWII: prime movers were the French and Germans who felt that a new economic and political framework was needed if future Franco-German conflict was to be avoided. Almost immediately following WWII, the Cold War began which further encouraged the objective of unification (eur. unification vs. USSR; as well as added the US's encouragement of this objective)

3 approaches to the academic debate:(i) pragmatists: need to pull together some sort of European Union(ii) federalists: need a Federation of European States(iii) constitutionalists: higher than a federation need a genuine state of Europe.

1947 creation of GATT: with its aim to lower tariff barriers on an international level

1948 Council of Europe: is founded. Its membership was open to all Western Democratic nations. Essentially, the Council was composed of 2 parts: (1) Union of Parliamentarians, basically set up for debate; and (2) the European Convention on Human Rights.

1949 Benelux Treaty: still in force today, it created a free trade agreement between Belgium, Holland, and Luxembourg based on a customs union and some commitment to achieve basic economic goals.

1950 Robert Schumann Plan: Schumann wanted progress on the economic front and wrote that a Coal and Steel Community should be developed first

1950: creation of the organization for European Economic Cooperation. Its creation was influenced by the Marshall Plan of 1947. It had a broadly based membership, which included Canada and the US. Essentially an intergovernmental organization which coordinated policies but was not a decision-making organization.

April 1951 Treaty of Paris: which established the European Coal and Steel Community(ECSC) to create a common market for those commodities. Six founding countries: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. Based on the Schumann Plan of 1950. This endeavour consisted of 5 organs:(1) a permanent executive (the High Authority)(2) a consultative committee attached to the High Authority (consisting of representatives of employers, trade unions and consumers)(3) a Special Council of Ministers(4) an Assembly(5) a Court of Justice whose decisions were binding on the Member States

Lasok explains that the most important feature of the ECSC is that it is truly a supranational organ. The ECSC proved that a supranational institution could function despite diverse national interests. Note that problems did occur in the ECSC: i.e. there was a crisis in 1959 due to the overproduction and increase in the use of oil which rendered coal mines redundant; the Council of Ministers refused to sanction


EU LAW I – Prof. De Mestral Fall 2004measures to finance the stock-piling and the decrease in production because of their national interests.Nevertheless the ECSC was a success, so founding members expanded the agreement with the: March 1957 Treaty of Rome.

1954: The European Defence Treaty (to have supranational control of the armed forces) failed in 1954 and defence was then undertaken by NATO

1955: meeting of the Foreign Ministers of the 6 members of ECSC resulted in the Messina Resolutions which dealt with:(1) community of liberalization of trade (pursuing the concept of economic union)(2) special community with respect to research (etc) on atomic energy

1956: Spaak Report which contained 2 concrete proposals for 2 new communities based on the Messina Resolutions. Very much based on the model of the ECSC (in terms of the High Authority and the Court). Discussion of actual vesting of authority in a community institution, thus, going beyond mere intergovernmental cooperation.

March 1957 Treaty of Rome: drafted; Came into force Jan 1 1958. Established the EEC, which was to remove all tariffs and quotas among member states by 1968.This treaty created 2 new communities:(1) the European Atomic Energy Community (EAEC): aim was to develop nuclear energy, distribute it within the community, and sell the surplus to the outside world.(2) the European Economic Community (EEC)

The Merger Treaty: it was clear that 3 assemblies were not necessary (ECSC, EEC, EAEC), the Merger Treaty instituted a single commission and a single council (as opposed to the parallel institutions). The European court being responsible for all 3.

Other Western European countries eventually joined: the U.K., Denmark and Ireland in 1973 (the 1st Treaty of Accession was signed by these 3 in 1972); Greece in 1981; and Spain and Portugal in 1986.

Despite the removal of tariffs, a complex web of non-tariff barriers continued to hamper trade among EC members. Further integration was argued for in order to revive the sagging EC economies.

1970, 1975- Budget Treaties: as the Community developed, the major issue became whether the Community should have it own direct budgetary resources (that is, should it have the capacity to tax) or not. With the Budget Treaties, certain moneys go directly to the Community: (i) custom duties, and (ii) 1% of VATS in each member state.

1976- direct elections 1976- Tindemanss Report: postulated a gradual development towards European Union, envisioned the closer cooperation of Member States; it failed.

1984- the European Parliament adopts the "Draft Treaty Establishing European Union", thereby reviving the notion of European Federalism. This triggered off a reaction which ultimately resulted in the passing of:

February 1986 Single European Act: called for greater economic and monetary union, although it did not spell out how to achieve it. More concretely, the act established the goal of a single market by the end of 1992. To ensure the free movement of people, goods, services and capital as of Jan. 1, 1993, directives to harmonize standards in the community cover new jurisdictions, including environmental law, immigration control.


EU LAW I – Prof. De Mestral Fall 2004Article 1 of the SEA makes it clear that the objective of all the Community treaties is to contribute together to making concrete progress towards European Unity (from Opinion 1/99 EFTA case).

Rhonda/Suzy described SEA as one of the landmarks in the long road towards European Union. The main merit being that it's simultaneous reform of the 3 treaties establishing the 3 communities, as it further advanced the concept of one community. It is an important landmark in EC law itself as well as being a catalyst for the major legislative effort to secure a genuinely free common market by 1992. It also provided the impetus for complex and ambitious new negotiations on monetary and economic union within the EC.

December 1991 Maastricht Treaty: was signed by the leaders of the 12 EC member countries to expand the role of the EC beyond its current trade and economic issues. In providing for a single European currency and co-coordinated financial policies under one central bank sometime between 1997 and 1999, it outlines the mechanism of how the EC will achieve its long-stated goal of economic and monetary union (EMU).

There is the qualitative change with the Maastricht treaty from a common market to a single market. Article 2 speaks of the harmonization of policy on the economy: "common policies", "a harmonious and balanced development of economic activities", "economic and social cohesion and solidarity among Member States".

The political dimension of the proposed treaty can be seen in Title V (article J.1 "The Union and its Member States shall define and implement a common foreign and security policy, governed by the provisions of this Title and covering all areas of foreign and security policy.") DeMestral stated that this political commitment is less strict than other commitments (i.e. economy) and that it is just the groundwork, the beginning of cooperation in a political dimension. According to Prof. Garon this introduced a "politique commune generale", which distinguishes Maastricht and what makes it important. DeMestral also referred to art. 1 saying that it speaks to the people, not just to states and governments.

The Treaty cannot come into force until its 12 signatories ratify it. Luxembourg, Greece, Ireland, and France have done so. Belgium's lower house has approved the treaty. In June, Danish voters rejected the treaty (however, the Danes have since made conciliatory notes in that now they say that they are prepared to vote again). National opposition to deeper integration: In calling for joint foreign, defence, health and consumer protection policies, among others - in effect, political union -the treaty has collided with nationalistic fervour. The concern that Community institutions are remote and unaccountable was reflected in the large NO vote (48.95%) in France, but also has been increasingly reflected in other EC countries.

1.4 The Nature of the EC as an ‘Institution’ – Does the classic model of intergovernmental organizations apply to the EC?

No. The Classic Model: members are sovereign states that are involved in discussions and negotiations. Member states can say no at any point. The international organizations exist to discuss, not to tell their members what to do.

The EC: The right to withdraw is not envisioned; nor can member states be expelled (a problem with Maastricht). The very form seems to imply that you are in it for the


EU LAW I – Prof. De Mestral Fall 2004long run. In effect, it is a supra-national organization as opposed to an inter-governmental organization. Unlike international organizations, the Treaty often can affect individuals (note: as a general principle, the rules of international organizations bind only states int’l personality).

However, the EC is like an international organization in that:(1) The principle of liberalization of trade seen in article 9 is similar to the principle of GATT. Furthermore, from this article and others, can see that it is more than a mere debating forum.

(2) The EEC Treaty is described as “un loi cadre,” that is, something that sets up a large framework, with a broad scope for future developments."Un loi cadre" can be distinguished from "un traite du loi", where rules are set out in detail (i.e. the ECSC where the fundamental rules are spelled out). The EEC Treaty does not say in detail where the community will go and what the limits are. That it is characterized as "loi cadre" implies that it is an organization with broader powers and scope that are spelled out. The treaty has a core, an agenda set out in concrete, to be met.

The Court in Opinion 1/91 (EFTA Case) states that it is clear that the provisions on free movement and competition, far from being an end in themselves, are only means for attaining those objectives.

1.5 Economic goals are enshrined in the economic unionKind of institution the EC is – defined by articles of Treaty. 1. Art. 2: Two (2) great goals of the EEC Treaty:(1)"establishing a common market"(2)"progressively approximating the economic policies of member states"

The Court in Opinion 1/91 (ERTA case) on the objectives of the EEC Treaty: "It follows inter alia from Articles 2, 8a and 102a of the EEC Treaty that that treaty aims to achieve economic integration leading to the establishment of an internal market and economic and monetary union."

2. Art. 9: the community shall be based upon a customs union which shall involve:(i) prohibition between member states of customs duties on imports and exports.(ii) prohibition of charges having equivalent effect.(iii) adoption of common customs tariffs in their relations with 3rd countries.[noted that before the Community was created, the tariffs were high (in the 40 to 50% range)]This provision is based on a theory of liberalisation of trade. Goal is to eliminate inside tariffs and create common external tariffs promote intra & inter-state and 3rd

party trade. Like GATT.

3. A common market is created: Free Trade Area. Elements of the common market:art. 10: principle that as soon as foreign goods come in, they are free to travel.art. 12 & 13: customs duties shall be progressively reducedart. 18: community negotiatesart. 30: a quota and all measures having equivalent effectare prohibited.art. 38: a common agricultural policyart. 48: freedom of movement of workersart. 52: freedom of establishment (that is, freedom of professional peoples to move and establish their business)art. 67: freedom of movement of capital


EU LAW I – Prof. De Mestral Fall 20041.5 The nature of these economic and political obligations Goals enshrined in the EC Treaty are divisible as follows: binding rules, the programmatic duties and the powers given to the institutions add up to “a program that binds its members and states.”

(i) Rules that bind states and individuals: The binding nature of the obligations is key: these rules are binding on MS, on companies, and individuals w/i states (i.e., arts. 8,9,10,12,16,30,31,34 have all been held by the court to have direct effect because they speak to individuals)

art. 8: the common market shall be progressively established during a transitional period of 12 years.art. 9: the Community shall be based upon a customs union.art. 12: the Member States shall refrain from introducing between themselves any new customs duties on imports or exports or any charges having equivalent effect.art. 31: Member Sates to refrain from introducing new quantitative restrictions

These provisions are "shall" provisions: clear mandatory language is used; legally binding. The Treaty intends to create a customs union: no debate, concrete and binding language.

(ii) Programmatic rules/duties: there is an obligation to achieve these goals.art. 2: The Community shall have as its task, by establishing a common market and progressively approximating the economic policies of Member States, to promote throughout the Community a harmonious development of economic activities, a continuous and balances expansion, an increase in stability, an accelerated raising of the standard of living and closer relations between the states.art. 3: the activities of the Community shall include...art. 6: Member States shall... coordinate their respective economic policiesart. 8a: The Community shall adopt measures with the aim of progressively establishing the internal market over a period expiring on 31 December 1992.

These provisions are programmatic as they set out a program: they are not self-executing (other measures must be taken first); they are not directly applicable rules that speak directly to states and individuals.

(iii) Institutions are set up to help: rules empowering the institution to act (ie. arts. 6 and 8a above), are coupled with the powers given to various organs of the community (the Commission) (ie. arts 7(2),40,41,46,130). For example,art. 7(2): The Council may...adopt...rules designed to prohibit discrimination [on grounds of nationality].art. 40(2): deals with how the common agricultural markets organization will take place (what its form will be).


EU LAW I – Prof. De Mestral Fall 20042. EC INSTITUTIONS

2.1 Introduction

Council of Europe, 1949 (38 members) Intergovernmental body to coordinate relations btw states Though focus was supposed to by limited, became involved w/ economic,

cultural, and scientific activities. European Convention on Human Rights is greatest achievement. All members

must accede. Inevitably involves some political integration.

European Economic Community, 1955 Creation of common market, and elimination of barriers to trade by setting up

common customs tariff. Unlimited duration Merged w/ European Coal and Steel Community in 1965

Single European Act, 1986 Formal changes:

o gave legal basis for European political cooperation by recognizing the European Council

o Created a court of first instance to assist the European Court of Justiceo Enhanced consultative role of European Parliament

Substantive changes: o Set out goal to create internal market by 1992o Qualified majority voting re-introduced into areas that previously

required unanimity

2.2 European Community BodiesThere are 4 central organs of the Community. The nature of the institutions is judicial (the court), executive (the council and the commission) and legislative (again, an intermingling of the council and the commission, and even the parliament). Most legislation is adopted by the council on the recommendation of the commission.

Article 4: The tasks entrusted to the Community shall be carried out by the following institutions:(i) the European Parliament(ii) Council(iii) Commission(iv) Court of Justice

European Parliament (Art. 189-201) 720 members increasing power: can vote out commission, approve its budge, and

appoint its President. there are certain kinds of laws that require parliamentary consultation,

cooperation , or co-decision.

1. composition- Representatives of the peoples of the States. The members are elected according to National methods; the process is by direct election to the European Parliament by the countries' electorate; the allotment of the number of members per country being unequal (it is a population based system). Mathijsen noted that few members have double mandates, that is, in terms of the European and their national parliament.


EU LAW I – Prof. De Mestral Fall 20042. powers(a) history/today: change in the power Since 1978, there has been a change in the power of the European Parliament: originally, its power was to help the commission; today, its power has become more broad. The European Parliament has the two primary characteristics:

(i) the limited powers of supervision: For example, article 140 states that the Commission must respond to the Parliament's questions; article 144 states that if 2/3 of the European Parliament carry a motion to censure, the members of the Commission shall resign; article 203 states the right to amend the draft budget (yet must act in partnership with the council).

(ii) more and more articles in the Treaty require the Council to consult with Parliament in decision-making: For example article 149 which was introduced with the SEA , is a new cooperation procedure, Council to adopt common position.

DeMestral noted that while of the 4 institutions of the EEC, the Parliament is the weakest, in all likelihood, its powers will increase as the EC expands. Rhonda/Suzy expanded this in noting that with the Maastricht Treaty, we see an increase in the role of Parliament with the establishment of ombudsmen to hear complaints, and the ability to veto legislative proposals.Lasok: Parliament participates in law-making but it is not a legislative body. Its functions are (i) supervisory (censure of commission, questions); and (ii) advisory (can be consulted on major policy proposals).Mathijsen notes that until the Single European Act of 1986, this institution was not known as the Parliament (but rather, was known sometimes as the Assembly, sometimes as the Parliament).

(b) what these duties/powers are: It still has no real legislative or taxation powers; it is an advisory/supervisory body (it is only referred to for opinion).-no real legislative or taxation powers-advisory/supervisory role-consulted on budgetary matters-can censure the Council and the Commission-can institute proceedings against either of the above if they fail to act-since the Single European Act, there has been an increase institutionalization of the required consultation to the Parliament; Today, it is a cooperative procedure

See charts on decision-making below

(c) specific duties:Power to Censure: This is one "real" power according to Mathijsen. If the Parliament disagrees with the activities of the Commission, it can adopt a motion of censure forcing the members of the Commission to resign as a body. Note, that the Council, however, is out of reach of censure and can re-appoint some earlier commissioners. Censure requires (i) majority presence, as well as (ii) 2/3 votes in favour. Mathijsen adds that censure has not yet past, although motions of censure have been made.

Budgetary Approval Power: There is a complicated series of approvals and counter-approvals; with the bottom line that Parliament now has the final word in the approval of the budget, within the designated spending parameters set by the Council. The Parliament also oversees the Commission's implementation of the budget.

Court Proceedings: The Parliament can now ask the ECJ to review the Council's or Commission's acts/omissions in accordance with their binding treaties (this is not an official power granted to Parliament as it was to the Council and to the Commission,


EU LAW I – Prof. De Mestral Fall 2004but it was done/allowed in 1990).

(d) Conclusion: The Parliament's powers have increased and will increase with time (i.e. the cooperation procedure on budgetary matters). However, Mathijsen states that for more power, the Parliament will have to become directly responsible to a well-defined electorate.

Council of the European Community (Art. 202-210) made up of one Minister from each member state (weighted votes) need 2/3 weighted majority to pass institutional balance to commission

(a) GeneralThe Council is the central organ of the EC. It is the legislature, the coordinator. Mathijsen: Originally responsible for the "progressive approximation of economic policies of member states.” Generally, it ensures the cooperation and coordination of national economic policies.

(b) CompositionIn each specific council, there is 1 member per country. Countries have different weighted votes, according to population. These members are appointed by their own governments. Though they are supposed to act in the interests of the Community, it is not always clear that this is the case. Their duty is to represent their governments, therefore, the Council is a political organ. The council meets only 5 days each month.Committee of Permanent Reps ("COREPER"), consisting of ambassador-ranking civil servants, which acts as the Council when the ministers of the Council are not present. Permanent Representatives prepare the work of the Council and are a liaison between national administrators and Community institutions. Although the COREPER has no legal power to make decisions, most of their decisions are adopted.

Working groups consisting of senior national civil servants assist the Coreper; these represent the national interests in Brussels, and the Community's at home.

In addition to the Council is the European Council, which is composed of heads of state. Under the Single European Act, is must meet twice a year. It is recognized as a body of the Council; it has no role in the legislative process, but an increasingly important role in the highest level of policy-making. They make broad policy outlines, and broad policy decisions.

Basically, the flowchart goes like this:Working Groups--->Coreper--->Council--->European Council

(c) Powers of the Council The Council plays the leading policy-making role; it also makes law. While it is the central decision-making body, in exercising its power of decision, the Council can only act upon a proposal from the Commission. And the Council can only amend a Commission proposal by doing so unanimously (article 149.1). In general, however, most of the law making powers of the Council must be exercised by a qualified majority (Art. 148). It concludes International Agreements negotiated by the Commission. It issues decisions via: (i) regulations, (ii) directives, (iii) decisions.The co-ordination of Economic Policies is one of its prime objectives/powers/responsibilities. Note this Problem: In the pursuit of the above, often the most important decisions are taken by the European Council or council in informal ways (that is, not in the above 3 modes). Tyler notes that the council is not


EU LAW I – Prof. De Mestral Fall 2004subject to review by the other institutions.Generally the Council's powers are conferred powers, but there is some residual power in the council to fulfil EEC objectives. Lasok stated that sometimes the Council seeks to exercise a power on its own initiative, claiming it can do so under its residual powers; and in so doing, it often abuses its powers.

A new cooperation procedure with the European Parliament was created with the Single European Act in 1986. This is to be used for legislation with respect to the elimination of discrimination on grounds of nationality, free movement of workers, free movement of services and harmonization measures with respect to the creation of the internal market. In such cases, the Council must adopt common position with respect to the commission proposal, and then refer it to the European Parliament (as per article x149). The purpose is to give a 2nd reading to the legislative process in certain fields (it gives the European Parliament more influence).

(d) Quasi-Institution for Political Co-Operation:This body is made up of one half Foreign Ministers (Council), and one half Political Committee and Secretariat based in Brussels. The Parliament and the Commission are also involved. Note that "Political Cooperation" was the title III for the Single European Act of 1986.

European Commission (art. 211-219) expression of genuinely supranational character of the community independent body – secretariat that has power & responsibility to keep

experiment moving forward. Initiates most legislation Commissioners are the spokespersons of the community

(a) GeneralThe Commission is like an executive branch of the EEC says Mathijsen; to Tyler, it is more like a big bureaucracy. There is a permanent Brussels staff and its commissioners are completely independent of their national governments, with 4-year, renewable terms. Some say the Commission is too politicized, but it tries to present itself as a non-political body, embodying the Community's interest.

(b) CompositionThe Commission is made up of 17 members (big states get 2 members, others get 1). The term of office ends by death or by resignation (can be compelled to resign if censure approved by 2/3 of the European Parliament). The members act entirely independently, they are not to be influenced by their own governments. The Commission president often speaks for the community.

(c) FunctionsRhonda and DeMestral saw the 3 functions of the Commission as being the

(i) initiator and coordinator of Community Policy, (ii) executive agency of the Communities, and (iii) guardian of the treaties.

- initiator and coordinator of Community Policy by initiating legislative proposals: recall that the EEC Treaty can be characterized as traite cadre; therefore, the details of policy must be worked out. The Commission formulates proposals for submission to the Council to help the Council in the formulation of policy; many important policy initiatives have to come from the Commission. One of the fundamental roles of the Commission is to propose and draft regulations and directives; if the Commission withdraws a proposal it dies.

- executive agency of the Communities: Commission with wide range legislative and executive functions and powers.



- it is the guardian of the Community Treaties: acts as a watchdog to ensure that treaty obligations are respected. The Commission investigates allegations of infringement of the Treaty.

(d) Further duties laid out in MathijsenMathijsen lists as the duties of the Commission (iv) the functioning and

development of the common market, the community budget, competition rules etc; (v) the administration of community; finances; (vi) to negotiate International Agreements; (vii) to represent the Community in the International field; (viii) to enforce the community law.

Mathijsen noted that the Commission has the powers to investigate the Council's failings or a national government's failings and to bring proceedings before the court (but no coercive measures are possible).

The Commission issues recommendations and opinions (these are not binding). It exercises its own power of decision. Powers of decision-making are conferred by: (i) treaties, and (ii) council (the more specific powers). Note that often the Commission can only act once the Council has failed to do so.

European Court of Justice (Art. 220-245) Supranational institution Has exclusive authority to interpret the meaning of community law Beginning to look like a constitutional court

o Develops constitutional principles to which Community institutions & members states are held.

o Interprets treaties and their limitso Adjudicates among EC institutions, and between EC institutions and

member stateso Determines scope of Community lawo Tries to preserve balance between Community and member states

– constitutional adjudication impossible in such situation (F. Jacobs) Now also have a court of first instance: TN expanded its powers by art. 224

TEC). Doesn’t follow a strict rule of precedent, but does try to follow previous

decisions. Takes purposive/teleological approach to interpretation, and examines the

whole context in which provision situated. May have to narrow their mandate

According to "The Economist", though governments that violate single-market rules can be taken to the European Court, "the scope for cheating is great; the power to enforce disturbingly weak." Most governments have abided by the court's judgments. But at the end of 1991, a total of 105 court rulings were not being applied by the EC governments against which they had been made.

The Maastricht treaty would bolster the court's enforcement powers by allowing it to levy fines on national governments.

(a) GeneralThe Court deals with states, the EC and individuals. Remedies are set out by the Treaty of Rome.

(b) CompositionThe Court of Justice consists of 13 judges and 6 Advocates General; there are 5 chambers. And Complete Independence! The terms are 6-year, and renewable; the Chief Justice is elected by 12 peers for a renewable 3-year term.

(c) Powers and Duties


EU LAW I – Prof. De Mestral Fall 2004The court has the duty to make sure that all member states are applying the law in the same way. So, it interprets Treaty law, and makes sure that it is observed (it can establish penalties for failure to comply with the law). Not only does it interpret existing rules, it develops new ones: its own common law has been developed.

Disputes are brought before it by the Commission or a member state. It also has jurisdiction over claims for damages resulting from non-contractual liability of the community (Art. 227-228) and disputes between the institutions and their servants.Standing:

The commission and member states have standing before the court. In terms of the question of standing for natural/legal persons, see articles x

173-176 and BP v. Commission [1978] E.C.R. 1513 at 1525(13). In brief, only where it can be shown that a community's acts provision have in

reality an "individual" rather than a general application, will the natural/legal person have standing.

The Court of Justice can annul the community's/institution's acts if there is: (i) lack of competence (that is, the institution overstepped the competence

conferred on it in the treaties), (ii) the infringement of essential procedural requirement,(iii) infringement of Treaty or any rule relating to its application, or (iv) misuse of power by the institution or officer thereof (that is, the use of

power of public authority to attain an objective for which the powers were not intended.

The court's rulings have a direct effect, applied by the national courts.

(d) specificsPreliminary rulings: questions of law brought to the court by national court judge

Compensation for damages caused by the institutions: can be handed out to natural/legal persons even if they can't challenge the legality of the initial measures. It presupposes the unlawfulness of the action or policy.EU will not be liable for policies improperly implemented by member states.

Interim measures: the Court can suspend the operation of a regulation, if on application the applicant proves that the measure will cause increase harm to him/herself. However, there is some reluctance on the part of the court to do so.

Court of Appeal, Court of Justice: exists as of 1989. This court hears appeals on points of law only from the court of 1st order. It can hear final judgements, or challenges on interlocutory procedure.

Court of 1st Instance: This is the forum for natural/legal persons to bring proceedings against institutions and member states; with the right to appeal to the Court of Justice. The Court of First Instance shall have jurisdiction to hear and determine first instance actions as per articles enumerated under Art. 225.-See pages 97/98 for exact types of applications.

Court of Auditors: This court was set up by "The Treaty". It examines the expenses and intake of all revenue of the community and all institutions, to make sure that all is (i) lawful and (ii) financially sound. Its annual report is forwarded to all institutions and allows Parliament to perform its budgetary function.

European Central Bank


EU LAW I – Prof. De Mestral Fall 2004Advisory bodies: regional council, administrative agencies set up to deal w/ environment, etc.

2.3 Derivation of the Powers of the InstitutionsERTA case and the EES Opinion 1/91The two legal basis for the EC powers were laid out by Van Empel readings:

1. Powers of AttributionThe powers by which the Council and Commission of the EC are authorized to legally bind the subjects of the communities are not of a general nature: Such powers of attribution are therefore, particularly attributed to or conferred upon the institutions by the Treaties. Therefore, in theory, there is no general concept of implied powers; everything is attributed – all derivative from Treaty. Rhonda: even though it is a traite cadre, there are certain limits.

2. Article 308: “If action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community, and this Treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, take the appropriate measures.” Providing the legal basis for additional decision-making powers.

Q: What is the meaning of the attribution of power given the presence of Art. 308?A: ERTA CASE (1971) Five of the six Member States of the EEC working on Agreement as to International Road Transport. The agreement never went through. The Council of EEC passes regulation dealing with certain social provisions in the field of road transport in 1969. MS then renew negotiations and draw up revised ERTA for states to sign in 1970, taking up the agreed position to Council discussions.

Commission argues: that the procedure followed with respect to the revised ERTA was wrong, as the states no longer had the authority to do what they did. Since the Community has broad powers for implementing a common transport policy (under Art. x75), these powers extend to external relations, as well as domestic ones. The Commission seeks annulment of Council's discussion.

Council argues: since the Community only has such powers as have been conferred on it, the authority to enter into agreements with 3rd parties, it cannot be assumed in the absence of an express provision in the Treaty. Art. 75 relates solely to the internal measures.

ECJ: The general rule is the theory of attribution: all powers are derived from Treaty. But, even when there is no explicit authority attributed to an institution, such institution may be able to act, based on article 235, when "the measure taken is necessary to attain an objective of the Community" (and the Treaty does not provide the necessary powers) In EC areas of jurisdiction, only the EC can negotiate with non-member states; individual states cannot do this.

Determine which authority was, at the relevant date, empowered to negotiate and conclude the Agreement.

Community's authority to act and to enter into international agreements, regard must be had to the whole scheme of the Treaty.

Authority arises not only from an express conferment by the Treaty but may equally flow from other provisions of the Treaty.

Even when no explicit authority is attributed by the Treaty, the Community may have the power to do something because of:

1. other provisions in the Treaty (i.e. Art. 308), and


EU LAW I – Prof. De Mestral Fall 20042. measures adopted by the Community within the framework of those

provisions (measures were legitimate because of Art. 308).

A2: EES Opinion 1/91 - EFTA (space) Case Facts The agreement was between members of the EFTA and the EC and its member states. The purpose of the agreement was to create a European Economic Area (EEA) covering the territories of the member states of the EC and those of the EFTA countries.Aiming for homogeneity with Community law, the agreement proposed that:

This was an advisory opinion on the legitimacy of this system.

ECJ: "The system of judicial supervision which the agreement proposes to set up is incompatible with the EEC Treaty". It is institutionally incompatible.

Reasoning:(i) The Court first compared the objectives of the agreement with those of the EEC Treaty. It found that the objectives of the EEA agreement were limited to free trade and competition, whereas, the objectives of Community law go beyond that.

(ii) The Court then compared the context of the agreement with that of the EEC Treaty:"The EEA is to be established on the basis of an international treaty which, essentially, merely creates rights and obligations as between the Contracting Parties and provides for no transfer of sovereign rights to the inter-governmental institutions which it sets up.”In contrast, the EEC Treaty, albeit concluded in the form of an international agreement, none the less constitutes the constitutional charter of a Community based on the rule of law. As the Court of Justice has consistently held, the Community treaties established a new legal order for the benefit of which the States have limited their sovereign rights,..., and the subjects of which comprise not only Member States but also their nationals...The essential characteristics of the Community legal order which has thus been established are in particular primacy over the law of the Member States and the direct effect of a whole series of provisions which are applicable to their nationals and to the Member States themselves."

Conclusions from the cases above:- Legal homogeneity is needed & was not secured by the simple fact that the provisions were to be textually identical to those corresponding provisions in Community law.

- The proposed system of Courts may undermine the autonomy of the Community legal order and concluded that it would.(i) On jurisdiction: (Art. 292) "The exclusive jurisdiction of the ECJ […]MS undertake not to submit a dispute concerning the interpretation or application of that Teaty to any method of settlement other than those provided for in the Treaty...Consequently, to confer that jurisdiction on the EEA Court is incompatible with Community law."

(ii) On the system of courts: "An international agreement providing for such a system... is in principle compatible with Community law...However, the agreement at issue takes over an essential part of the rules...which govern economic and trading relations within the Community and which constitute, for the most part, fundamental provisions of the Community legal order. Consequently, the agreement has the effect of introducing into the Community legal order a large body of legal rules which is


EU LAW I – Prof. De Mestral Fall 2004juxtaposed to a corpus of identically-worded Community rules." It follows that in so far as it conditions the future interpretation of the Community rules on free movement and competition, the machinery of courts provided for in the agreement conflicts with Article x164 of the EEC Treaty and, more generally, with the very foundations of the Community."


EU LAW I – Prof. De Mestral Fall 20043. SCOPE OF COMMUNITY POWERS

3.1 Introduction

Summary of Sources1. Primary Law (...treaties)

-Treaties-Conventions between Member States-External Community Treaties

2. Secondary Sources (...law made by the EC itself)-Obligatory Acts

- Regulations- Directives- Decisions

-Non-Obligatory Acts -Domestic Law-Recommendations -Gen'l Principle of Legality-Opinions -Rules of Jud'l Control

-Non-Treaty Acts -Advocate-Gen'ls Opinion

Primary Law: treatiesArt. 220: ECJ shall ensure that in the interpretation and the application of this Treaty the law is observed.1. The Treaties (ECSC, EAEC, EEC, the Merger Treaty, Treaties of Accession, Budgetary Treaties (1970, 1975), SEA (1986))2. Conventions between Member States 3. External Treaties made by the Community

Secondary Law: made by the community

(TEC 249) To carry out their task, the European Parliament, Council, Commission shall make regulations, issue directives, take decisions, make recommendations, or deliver options.

o Regulation: general application, binding, directly applicable

Regulation as measure of general applicability & method and form imposed on MS – affects individuals. As such, regulations are capable of creating individual rights which the national courts must protect. Case CAM: a natural person can challenge a regulation where that person is directly and specifically affected.Weakness: Limited utility because it must be implemented as is. ‘Fit for all’ & must be general enough to be parachuted onto MS. Very slow process of legislation make.

o Directive: binding on member state to which it is addressed, but member state can decide how to implement (particularly useful when dealing w/ different forms of legal systems – common v. civil)

Directives are not meant to be an instrument of uniformity (as opposed to regulations).The Distinction between Regulations and Directives (Lasok, according to article 189): Binding only as to the result/the objective to be achieved; cannot affect individuals. Yet, some directives are drafted in such detail that little discretion is left to the Member States, and therefore, appear to be indistinguishable from regulations.Useful when wishing to harmonise laws within certain areas further community policy because flexible.


EU LAW I – Prof. De Mestral Fall 2004o Decision: binding on those to whom it is addressedo Recommendations & Opinions: no binding force

Direct application: to be automatically taken as part of national legal systems, w/out need for separate national legal measures) implies obligation of members states not to pass measures that conceal nature of obstruct direct effect of Community regulation (Variola)

Giving of reasons: art. 253 states that reasons for these decisions must be given (all issues of fact raised by parties need not be addressed: Sigerettendustrie case). And Art. 1 TEU.Applies to all hard law adopted: good because:

- increases transparency of Brussels Bureaucracy good European governance;

- rationale for judgement was thought through;- ECJ facilitates judicial review to see if decision was proportionate.

Q . Is this really law-making? More of a mix between law-making and international law. It is law-making because it is independent supranational institutions making rules that apply in national law directly, but international in the sense that it involves the laws of different countries.

EC Competence

EC only has power to do those things which it has been given authority to do by treaty. No inherent law-making power.

Started with authority to set up common market based on a customs union. ECJ held that achievement of this goal entrained taking measures relating to environmental protection & consumer protection, even though these issues had not been exclusively laid out in the treaty.

Single European Act 1986 gradually expanded areas of jurisdiction (arts. 86, 92, 97) and this is now reflected in the TEC (100-188), including in the inherent power accorded by art. 308: community allowed to do things in order to achieve truly acceptable community purpose (has been invoked, but courts interpret it narrowly).

Implied powers: institutions can claim that a particular treaty contains an implied power to make the particular regulation:

o Narrow: existence of a power implies any other power which is reasonably necessary for the exercise of the former. Federation Charbonniere de Belgique v. High Authority, Tobacco Advertising

o Broad: where a treaty confers a task on the Commission, it also confers the powers that are indispensable to carry out that task. Germany v. Commission (1987)

EC as a legal person: external competencies

[EU just acquired this capacity]

To what extent can EC be involved in matters w/ non-community states?

Wherever EC has clear primacy of jurisdiction, it has power to negotiate on behalf of members of the community (individual member states no longer have right to deal w/ foreign states independently, bilaterally, etc. on such issues).

Procedural basis for external competence : Art. 300(1): Procedures for negotiating int’l agreements – main role by


EU LAW I – Prof. De Mestral Fall 2004Commission, Council concludes agreement on basis of Comm’s proposal, having consulted Parl.

Legal basis for external action by EU : Widening external competence [TEU Art. 24: EU has legal personality and may enter into int’l agreements under Pillar 2: CFSP & TEU Art. 38: ibid for Pillar 3: PJCC]

o Exclusive Community jurisdiction : whenever the community acted to implement a common policy under the treaty, Member states no longer have the right to take external action that would affect this common policy (ERTA). Something is said to fall under exclusive Community Competence when the treaties impose upon the Community sole responsibility for performance of a particular task.

Express external competences: Competence limited by the EEC Treaty to commercial policy Art. 133 and to association agreements Art. 310.ECJ controversial in granting ‘implied’ external powers under:EA: development policy, environmental policy, R&DTEU: monetary & foreign Xchange, cooperation with 3rd parties on education, culture, health, trans-Euro networksAmsterdam & Nice: scope of CCPTN: governing economic & financial matters with 3rd parties

Implied external competences: Expressed internal powers become implied external ones.

o Limits: member states can take actions until Community has exercised competence (so long as these compatible w/ Community objectives) (Kramer case).

o Examples: setting tariffs governing taxation of goods coming into community, currency (once you take the Euro you can’t go back), agricultural policy, transport policy, fisheries conservation, free movement of goods, persons, services, capital.

If jurisdiction is shared, then treaty-making power is shared between member state and EC.

o Shared Jurisdiction : most matters fall here, so need enhanced cooperation. some groups may wish to move ahead more quickly than others, and the community may want to move forward to fight the perception that community standards are lowest common denominator.

Subsidiarity: used as a way to quell fears about community’s power. Community said to be governed by this principle [in those areas falling outside its

exclusive competence]o (art. 5 TEC) will only do those things that they can do better, and to the

extent that they can do better. Concept now built into many treaties. Political concept, not a legal one (used to guide legislator, not to determine

jurisdiction). Nature of community won’t allow it to observe this all the time.

It has been said that the ECJ is a ‘villain’ because it construes the scope of Art. 308 and 95 too broadly giving the EU institutions much power that originally was not intended. It should be noted that the greatest expansion of EU competence has been through Treaty revisions & that MS have been willing themselves to accord new competences to the Union over areas, where harmonisation and union was seen as needed.


EU LAW I – Prof. De Mestral Fall 20044. COMMUNITY LEGISLATION AND POLICY-MAKING

4.1 IntroductionLegislative Process- Process by which Community enacts legislationi) No single body of legislation-makingii) No magic formulaiii) Much of the law-making process instilled through ToA

- Commission Acting AloneArt. 86: rarely used. To issue directives or decisions in public undertakings (highly controversial)

- Council & Commission Acting Alone Council act on proposal of Com. Issue a decision based on Treaty voting procedure. May consult Parl.Issue: aspects of free movement of workers, K, economic policy and CCP.

- Council, Commission and Consultation with Parl.Bare requirement to consult with Parl, Council not bound to adopt Parl’s opinion.Treaty articles may also ask to consult with Committee of the Regions of Economic and Social Committee.Issue: ToA Art. 19 (rights to vote); Art. 22 (citizenship); Art. 93 (harmonisation of indirect taxation); Art. 107(b) (EU Central Bank); Art. 39 (CFSP). Facilitating discourse!

- Council, Commission and the co-operation procedure with ParlToA Art. 252: co-operation applies whenever the Treaty provides that an act be adopted according to this article. Parl: greater role in legislative process; 2 readings by Parl; amendments or rejections possible; Issue: implementing the single market; Art. 47 (recognising the diplomas); EMU.



Achieve better administration & suppress some blackages and delays, especially for internal market issues; Decrease commission seen as gate-keeper player, often with political arbitration role; Recognise Commission & parl. As important role, especially for first reading stage; Change in institutional attitudes.

- Council, Commission and Parl: Art. 251 procedurei) TEU bolstering the powers of Parl.ii) Parl has 2 readings.iii) ToA modified 251 by expediting process and strengthen position of Parl:

Council may adopt Parl’s amendment at first and act is approved.iv) Parl has real VETO power (under co-decision, may veto, but Council free to

dismiss Parl’s opinion)v) Move towards a co-equal role in European Institutions



- Council, Commission and the Parl: Assenti) Introduced by SEA for expansion of Community membership & association

agreements.ii) Council acts after obtaining assent of Parl act can only be adopted if

approved by Council & Parl.iii) Parl may delay and in effect has absolute power to reject the project, although

no formal amending mechanism for Parl here.iv) Issue: TEU Art. 49 (membership of EU); Central Bank, etc.

- Legislative Initiative and the Council’s use of Art. 208Mechanism whereby Council may ask Commission to perform study on a particular issue.

- Legislative Initiative for Parliament : Art. 192Acting by majority of its members, may submit to Commission request for proposal on matters it feels would enable better implementation of the Treaty.Art. 192 does not vest in Parl right of initiative, but it may be proactive.

Delegated Legislative Power- Institutional constraints guide delegation of legislative power.

i) Inter-institutional tensions: Council conditions the delegated power on the approval of a committee composed of MS reps i.e., Comitology. (Koster)

ii) MS couldn’t agree on detailed application of some rules- SEA, Art. 202 allows for the existence of the Comitology process & more orderly

committee structure.- Council may now confer to Commission, in the acts, which the Council adopts,

powers for the implementation of the rules, which the Council lays down.

Voting Requirements in the Council – Pillar 1


EU LAW I – Prof. De Mestral Fall 2004a) Prior to 2005- Majority generally- Treaty provides for 3 different forms:

i) Simple majorityii) SEA extended QM to internal market mattersiii) Unanimity applies to politically sensitive matters (often results in

inaction).

b) Nice Treaty- Modifies Art. 205(4) to reflect new MS

i) Accommodate smaller & larger statesii) QM now 258/345 votesiii) 2 thirds of states

- Extending QM; weighting votes; numbers required for QM.

Under Pillar 2 & 3a) CFSP- Council dominates

b) Police and Judicial co-operation in Criminal Matters (PJCC)- Enlargement of decision-making capability of EU in this pillar – Art. 34- Council acts unanimously on the initiative of a MS or Commission.- 4 main principle framework of decision-making for the Council exist (p. 156)

Temporal Dimension- Evolution of decision-making

i) Council sees itself as inter-governmental organii) Commission acting as a federalist organiii) Role of COREPER

- Institutional cooperation increased with SEA: Art. 95; also made legislation making more complex and MS more engaged and capable of veto. Also due to increased role of Parl.

- Westlake: Beginning of legislative year, Commission President sets out in front of Parl the programme & debate ensues. Parl may now consider ways of organizing its work to gain maximum influence over programme especially since it can approve the budget.

Democracy within the Institutions?- Democratic deficit? Weiler comments (p. 168 for arguments)

i) Voting for who actually makes decisions: ‘executive dominance’ii) Power to legislate divided between admin organsiii) By passing of democratic argument: Comitologyiv) Distance issue: transfer of power from MS to Brusselsv) Transparency and complexity of issue: behind closed doorsvi) Substantive imbalance issue: much too emphasis on freeing the

market, while little concern over worries of citizens (pressure group argument)

vii) Weakening of judicial control issue: redux of scope of questioning constitutionality of primary legislation

- Laeken Report (2001): consider the division of competence within the EU, Charter of Rights, democratic deficiency, transparency, etc.

- Recognise the differentiation & variable geometry of EU governance, conception of democracy that it embodies


EU LAW I – Prof. De Mestral Fall 20045. NATURE AND EFFECT OF EC LAW

5.1 IntroductionSeveral provisions have been held to have direct effect: 7, 9, 12, 13(2), 16, 30, 31, 32(1), 34, 37(1)(2), 48, 52, 53, 59, 60, 85(1), 86, 90(1), 93(1), 95(1)(2), 119.

Others have been held not to have direct effect: 5, 32(2), 33, 67, 71, 90(2), 92(1), 97(1), 102, 107.

- ECJ declaring in series of cases EU law as binding and must be internalised – without national implementation measure.

- Direct effect: automatically enforceable against that MS and can be invoked by any citizen or against any citizen by MS or citizens.

- DE of Treaty, secondary legislation, int’l agreements.- ECJ lacks jurisdiction over provisions of the 2nd pillar: cannot determine the

legal effect of those measures and, despite the changes to 3rd pillar, unlikely that ECJ will find these provisions to have DE – particularly b/c Art. 34.

- DE i) Invoked before a national court objective DE (broader

definition)ii) Conferring rights on individuals, which they may enforce before

national court subjective DE (narrower definition)- ECJ may spell out a specific substantive right to which individuals are entitled;

other times, ‘right to invoke’ an agreement (broad).

Why have DE?i) legal integrationii) effectivenessiii) uniform application of law

- Art. 249: Generally, regulations are directly applicable and have direct effect.

5.2 Direct Effect of Treaty ProvisionsThe founding documents of the Union are treaties. Usually in international law, treaties bind states, not individuals.

Early question: to whom do these treaties confer rights and obligations? How does direct application work?


EU LAW I – Prof. De Mestral Fall 2004Case 26/62 van Gend en Loos (1963) Facts: vGL imported chemicals from Germany. It was charged an import duty it claimed had been increased in violation of art 25.Issue: Can nationals of a member state lay claim to individual community rights which the courts must protect?Held: Yes.Reasoning: Consider spirit/general scheme of Treaty: to create a common market – it creates more than reciprocal obligations between states (the preamble refers to governments and peoples). - constitutes a new legal order of international law for the benefit of which the

states have limited their sovereignty;- must be interpreted as producing direct effects and creating individual

rights, which national courts must protect- DE = ‘self-executing’ provision - Art. 234 under which ECJ to ensure the uniform interpretation of the treaty

by national courts- ECJ confirms that MS acknowledge that EU law has an authority that can be

invoked before these courts

Note the purposive, instrumentalist reasoning – derived from the text, purpose of the Treaty. This is characteristic of the ECJ’s decisions.

This was a revolutionary judgment - had the answer to the question been that the Treaties apply only to states, there wouldn’t be a separate body of EC law. Not all provisions have direct effect. To have it, a provision must be self executing: clear, negative, unconditional, containing no reservation on the part of the member State, not dependent on any national measure (van Gend en Loos.) These criteria have not been strictly applied: little more than the condition of justiciability.

Costa v. ENEL- Law stemming from Treaty can not be overridden by domestic legal provisions

without depriving the Community law of its character and without calling into question the legal basis of the Community.

- ECJ invoked ‘clear’ and ‘unconditional’ character of law.

Case 2/74 Reyners v. Belgium (1974) Facts: Reyners was Dutch, educated in Belgium. He was denied admission to the Belgian bar because he was not a Belgian citizen.Issue: Is it permissible to deny a non-citizen membership to the bar on that basis?Held: No.Reasoning: The rule of equal treatment of nationals is fundamental to the Community. It established a right that citizens of all member states can invoke. Set of legislations effectively applied by a MS to its own national is directly invokable by nationals of all other MS as well. It is not dependent on a member state’s implementation – the fact that the state has not complied with its commitment under the Treaty leaves the obligation intact.

Defrenne (Art. 141 men & women equal pay principle)- Even if article in question is not clear and doesn’t impose precise negative oblig on MS or Community organs, the principle should be directly applicable and effectives and enforced by national courts.


EU LAW I – Prof. De Mestral Fall 2004Zaera- Art 2: EU promote the standard of living & jobs to citizens- No DE because here owing to the general terms and purpose of the

Community: cannot impose a legal obligation to MS or confer rights on individuals.

- Rules of expression of intent, purpose or motive are not DE.

5.3 Direct Effect of Regulations and Decisions- Art. 249 (makes reference to regulations being directly applicable, but not to

decisions. ECJ oversees this lacuna for decisions and grants them DE.- Soft-law has no binding or DE on MS

Regulations

Case 39/72 Commission v. Italy (1973) Facts: Commission brought in regulations establishing premiums for slaughtering cattle, withholding milk from the market. It took the view that Italy hadn’t complied, brought proceedings under art 226.Issue: Was Italy in violation?Held: Yes.Reasoning: The regulations are directly applicable and in force solely by virtue of their publication in the Official Journal (arts 249, 254). Any form of implementation that jeopardises the uniform application of regulations throughout the Community is contrary to the Treaty. A member state cannot, therefore, selectively or incompletely apply a regulation.

Case 50/76 Amsterdam Bulb BV (1977) As per Variola, the direct application of a regulation is independent of any measure of reception. Member states have a duty not to obstruct the direct effect of a regulation. However, member states may provide in national legislation for appropriate sanctions where none are provided for in the regulation, and can legitimately regulate related issues not covered by the reg. In some cases, that may even be required.

Slaughtered Cows- Domestic budgetary provisions cannot stand in the way of Art. 189 i.e., DE of

regulations- Persons may claim benefits of a directly applicable regulation.

Slaughtered Cows II (regulations not effectively carried out by Italy – Commission complains)- Delay in performing the obligations imposed on Italy constitutes a default in its

obligations.- Regulations come into force for the public therefore all implementing measures

that would create obstacles to the direct effect of the regulations and would jeopardize their simultaneous and uniform application in the entire Community are contrary to the Treaty.

Decisions

Finanzamt Traunstein (art. 234, 249)- It would be incompatible with the binding effect attributed by Art. 249 to

exclude in principle the possibility that persons affected may invoke the obligation imposed by a decision.


EU LAW I – Prof. De Mestral Fall 2004- The effectiveness of a measure cannot be weakened. (effet utile)- Unconditional, clear & precise here.

Case 9/70 Franz Grad (1970) Issue: Are decisions of the ECJ directly applicable?Held: Yes.Reasoning: - Individual may invoke decisions & they may have DE. (as above case) - Examine whether the provision in question, by its legal nature, background

and wording, is capable of producing direct effects in the legal relationship between the addressee of the measure and a third party.

- MS may legislate to ensure the better implementation of decisions.

5.4 International Treaties

- Art. 281 & 300: Community has legal personality & may enter into K agreements.

Cases 21-24/72 International Fruit Co. (1972) Issue: Does the Dutch court have jurisdiction to rule on the validity of Community regulations in relation to a provision of international law, and if so whether the regs were contrary to the GATT?Held: Insofar as the EC has assumed the powers previously held by member states in the area governed by the GATT, the provisions of the Agreement bind the EC. However, given the flexibility of GATT”s provisions, the scope for negotiation, it doesn’t confer rights on citizens they can enforce before the courts (ie. the provisions are insufficiently precise and unconditional to permit direct effect.)- See spirit, general scheme and terms of the agreement- GATT has no DE: would entail large consequences on EU.

Case C-149/96 Portugal v. Council (1999) (Portugal seeking annulment of Decision for MOU for textile with India & Pakistan. States in breach of WTO rules.)- WTO has its own DSU Body- If a member of WTO has laws that may be DE, i.e., EU, and if it allows this for

WTO rules, then there will be no reciprocity in implementing the agreement & EU MS will lose out.

- To allow for DE of WTO would deprive legislative bodies of EU for enjoyed by trade counterparts.

- WTO: not in principle among rules in light of which ECJ is to review the legality of EU’s laws.

- Where the rules of a treaty are sufficiently precise, where the intention of the treaty is to give rights to individuals, where the obligations are certain and finite, it can have direct effect.

Germany v. Commission- Gatt provisions could be invoked:

i) Where EU intended to implement that particular provision;ii) Where the EU measure being challenged expressly referred to the

particular GATT provision.

Principles of EU law should be interpreted in light of int’l law ’obligation of harmonious interpretation’.



Direct effect of directivesThe most complex issues of direct effectiveness arise from directives: they are often ambiguous, and they’re addressed to states. They are usually used for harmonisation, to bring together the disparate laws of member states. Provide a compromise between member states on sensitive matters by providing some discretion for member states: Art 249 says directives are binding on member states in terms of result, but the means of achieving the result are left to national authorities. How do we reconcile the original criteria for direct effectiveness with the flexibility of directives?

Case 41/74 Van Duyn v. Home Office (1974) (Art. 39, 234, 249) Facts: VD a Dutch national who went to UK to work for the Scientologists. She was refused entry to the UK, because Scientology was regarded as harmful. She challenged the decision on several grounds, including that it contravened the directive on free movement of workers.Issue: Does the directive have direct effect?Held: Yes.- Reasoning: Art. 234 empowers national courts to refer to ECJ questions

regarding all acts of Community institutions these acts may be invoked by individuals in the national courts too.

- Since directives are binding as per Art. 249 – there is possibility on relying on them directly before national courts.

Examine each provision in context: see if sufficiently clear and exact to being applied directly.

Kortas- Not because a MS derogates from harmonizing directive under Art. 95(4) that a

citizen is precluded from relying directly on its provisions. (Even if MS has asked permission to derogate.)

ECJ here thought to have advanced greatly EU Law.

Ratti (X labelled dangerous substances in compliance with a directive that the Italian government had yet to implement and was therefore contravening Italian law)- Directives create oblg for MS.- MS that do not comply with directives: cannot rely on internal provisions

that are illegal from the point of view of Community lawindividuals are entitled to rely on the directives as against the defaulting MS and acquire the rights thereunder available to them.

However: until the timeframe given in the Journal for the implementation, an individual may not rely upon the directive & the MS is free in that field.

While directives can be enforced directly against a state after the end of the implementation period (direct vertical effect), they cannot of themselves impose obligations on individuals (direct horizontal effect). Directives can only be directly invoked in proceedings against other parties (horizontally) in circumstances where they do not of themselves impose an obligation on a private party.

Becker (Germany failed to implement a directive & individual invoked)- MS are under an obligation to achieve a result before the expiration date

set by the directive. - Even if it has not been implemented, if the directive is unconditional and

sufficiently precise it may be relied upon by an individual against any national provision, which is incompatible.

- Non-implementation before date – produces similar effects to regulations i.e., D applicable.



Marshall (No.1) (1986) Facts: Marshall was dismissed by the Health Authority (employer) because she was 60. Women have to retire at 60, men at 65. Directive prohibited discrimination on grounds of sex.- DE of a directive can only be pleaded against a MS and not individuals.- Against horizontal DE as per Art. 249 i.e., binding effect of directive exists

only against MS to which it is addressed. - Expanding notion of public body health authority

Contrast: Defrenne: Re Art. 141is mandatory in nature (discrimination on gender) not intended only to regulate the action of public authorities, but extends to all agreements that are intended to regulate paid labour collectively, as well as K btw individuals. Undermines Marshall

a) Expanding Vertical DE: Broad Concept of State (Means 1)- ECJ to enhance the domestic enforceability of directives

i) Administrative direct effect state organs, domestic admin are bound to apply the provisions of directives.

ii) Expand notion of public body against which directive could be enforced.

CASE1. Marshall- Public Authority includes Health Authority plead directive.- Person may rely on a directive against a state regardless of the capacity in

which the organ is acting, employer or public authority. Vertical integration is not against direct organ, but state’s failure to implement directive.

b) Indirect Effect: Principle of Interpretation (Means 2)- ECJ expanding domestic enforceability of directives

i) Principle of harmonious interpretation, which requires national law to be interpreted in light of directives.

ii) May be invoked by anyone in order to influence the interpretation of national law.

Marleasing SA (1990) (Art. 10 & 249) Facts: Plaintiff company brought proceedings against defendant company for declaring defendant’s articles of incorporation void, for ‘lack of cause.’ Directive did not include ‘lack of cause’ as a ground for nullity of articles of incorporation, but Spanish law does.Issue: Whether directive can have direct effect between individuals.Held: National court is required to interpret national law in light of directive’s wording and purpose, in order to achieve the result pursued by the directive. The obligation to interpret national law in light of directive arises whenever national law is to any extent open to interpretation. - Required to interpret national law in light of wording and purpose of directive- Duty of MS to adopt all appropriate measure to fulfill obligations (Art. 10) arising

from directives - Even unimplemented directives can be relied upon to influence the interpretation of national law in a case between individuals.

c) Incidental Horizontal Effects- Lessening impact of Marshall on prohibition of horizontal DE of directive- Cases here permitting the use of unimplemented directives between private

parties.


EU LAW I – Prof. De Mestral Fall 2004- Cases suggest: directly invokable against individuals (limited horizontal effect)

when they do not directly impose legal oblig on private parties i.e., when they are not narrow in concept.

CIA Security Facts: CIA Security claimed that Belgian law was in breach of EC Treaty and the law had not been notified to the Commission as required by the directive.Issue: Whether directive is sufficiently clear to have direct effect and whether national court can refuse to apply a national law which had not been communicated as required by the directive.Held: Directive is unconditional and sufficiently precise to be relied upon by individual. Breach of obligation to notify Commission of legislation will render law inapplicable to individuals. Directives have a limited form of horizontal effect when they do not directly impose legal obligations on individuals. By rendering inapplicable a national legal provision as a result of a directive’s direct effective, party will lose their grounds for suing (disadvantage).

General Notes:- cases dealing with community regulations seem to be saying that regulations

are directly applicable and that by their very nature they have direct effect.- directives and decisions can also have direct effect: a directive must be

unconditional and sufficiently precise. Examine the legal nature, background and wording to see if a provision is capable of producing direct effects.

- an individual can rely on a directive in proceedings even if the directive has not been implemented in the necessary time period and it conflicts with national law.

- a state cannot use a directive not yet in force against its citizens to determine criminal liability.

DOCTRINEWinter: Text written at a time when there was no answer and the court attempted to explain article 189. It said that all regulation, directives and decisions were binding in their entirety and were directly applicable to all of the member states. He said that the rules of Community law were directly slated into the member state law with nothing else needed. If Winter is right then article 189 cannot be read literally because it only expressly allows regulations to be directly applicable.

Authors after Winter have said that a broad vision of direct applicability and direct effect is needed. Steiner: DE is necessary and useful wrt EC legislation and that it should cover any legally binding act that is capable of creating an immediate obligation.Concepts of supremacy would be compromised and Art. 177 would not be useful if there was no concept of direct effect. Therefore, once there is an unconditional, clear and precise obligation that is absolute it is capable of having direct effect regardless of whether it comes in the form of a regulation, directive or decision.


EU LAW I – Prof. De Mestral Fall 20046. SUPREMACY PRINCIPLE

6.1 IntroductionThe doctrine of supremacy of EC law has no basis in the treaties, but was developed by the ECJ. EC law is autonomous, rather than derivative, on the basis that member states have voluntarily chosen to transfer their sovereignty. The aim of establishing common market would be undermined if EC law could be made subordinate to national law. The validity of EC law can never be assessed by reference to national law. National courts are required to give immediate effect to provisions of directly effective EC law. If need be, they have to set aside national law which could impede the application of EC law. The obligation to set aside national law does not require to nullify national law. If there is no conflict with EC law, such law can continued to apply.

- Most national courts accept the requirement of supremacy, but most regard this as flowing from their national constitutions rather than from the EC treaties. They claim to retain a power of ultimate constitutional review over measures of EC law.

- Written by ECJ, not in Treaty: new legal order in Van Gend en Loos – voluntarily chosen to limit their sovereignty + one personality per ENEL

- Pragmatically, aim is to create a uniform common market would be undermined if EU Law would be subordinate to national laws

- Validity of EU law found in reference to national law DE of provisions – no impediment to application of EU Law

- Monoist view of ECJ and supremacy of EU Law?

6.2 Supremacy of EC Law From the ECJ’s Perspective

van Gend en Loos (1963) (Art. 5, 7, 249 & 25 DE) Belgian government argued that ECJ should not answer the question referred to it, because it was a matter that fell exclusively within the jurisdiction of the Dutch court.Issue: Is the ECJ permitted to rule on the question of whether national law prevails over Treaty Law, or is that a question for the national constitutional court?Held: The ECJ may rule.Reasoning: The Treaty is more than a treaty creating rights and obligations between states. It creates a Common Market, institutions with sovereign rights. The conclusion is that the Community constitutes a new legal order, and that states members have limited their sovereignty; domestic law must follow EU law.

Problem: national constitutions do not accord primacy to international treaties over national law.

Flaminio Costa v. ENEL (1964) (Art. 10, 12, 234) 1. EEC treaty has created its own legal system which is an integral part of the legal systems of the member states. Member states are bound to apply EC law2. Member states have limited their sovereign rights by establishing a Community with its own, sovereign institutions, legal personality, and capacity of representation on an international plane. Member states have created a body of law which binds both themselves and their nationals.3. Integration of EC law into the legal systems of member states make it impossible for member states to accord precedence to a unilateral and subsequent measure over a legal system accepted by them on the basis of reciprocity.4. Precedence of community law is confirmed by Article 189: regulation shall be binding and directly applicable in member states. This would be meaningless if member states could pass subsequent national laws overriding community law. Treaty law cannot be overridden by national law.



Internationale Handelsges.m.b.H. (1970) - Community law cannot be overridden by national law for adverse effect on

uniformity and efficacy of EU Law- Cannot deprive Community from its character and, without this, its existence

might be called into question.

Simmenthal SpA (1978) Facts: Company claims repayment of fees the charging of which was incompatible with EC law. ECJ ruled that charges were indeed in breach of EC law. Italian authorities said they can’t simply refuse to apply a rule of national law, they must first bring the matter before the Italian Constitutional Court to have it declared unconstitutional.Held: - Anything that might impair the effectiveness of Community law within the

national legislative context shall be set aside so as to not prevent Community rules from having full force and effect.

- No laws that are incompatible with the very essence of Community law shall remaining force.

- Such domestic laws will be made inapplicable to the extent of their incompatibility.

Language of Federalism!

Larsy v. INASTI Even if the national constitutional court is the only court who has jurisdiction to set aside a national law, another national court must give full effect to EC law. National court does not need to nullify the national rule, only set it aside: courts can continue to apply it in cases where it does not conflict with EC law.

R.v. Secretary of State for Transport, ex parte Factortame (1990) Full effectiveness of EC law would be impaired if a national law could prevent a court seized of a dispute governed by community law from granting interim relief. Where a court is seized of a dispute governed by Community law, and would grant interim relief if it were not for a rule of national law, must set aside the national rule and do so.- Set aside national law that doesn’t give full effectiveness to Community law.

Weiler (p. 284): Bi-dimensional – Supranationality depends on: ECJ & Supreme Court of MS and how they accept the ECJ and EU laws.

Issue of parliamentary supremacy in the UK: see case C-213/89Issue of Kompetenz-Kompetenz (which court is competent to decide over allocation of jurisdiction between community and member states): remains contested. ECJ under Article 220 EC claims that this is their task. National constitutional courts determine this question by reference to their own constitutions.

6.3 Supremacy of Community Law From the Perspective of the Member States

a. France (p. 289) - France doesn’t accept unconditionally EU law supremacy as per ECJ reasoning,

but “under the authority of its own national legal order.”- Cour de Cassation (supreme court for all matters other than constitutional

questions), Conseil Constitutionnel in 1975 accepted supremacy of community


EU LAW I – Prof. De Mestral Fall 2004law over French law. Conseil d’Etat (supreme administrative court) accepted supremacy in 1989.

b. Germany- Art. 24 of German constitution allows for the transfer of legislative power to int’l

organisations, but does it permit the transfer to an organisation outside the German constitutional structure the power to contravene certain basic principles protected under its constitution?

- Solange Cases: German Constitution does not transfer sovereign rights to inter-state institutions: does not allow for the amending of the basic structure of the Constitution.

- Doesn’t allow the destruction of the basic identity of the constitutional structure of Germany.

- German courts & gov will always allow reservations under which EU law will not be primary over domestic law as

“Community still lack a democratically legitimated Parliament directly elected by general suffrage which possesses legislative powers and to which the Community organs empowered to legislate are fully responsible to a political level.”

- If conflict: German constitutional fundamental rights are to prevail over Community.

- Solange II: So long as the Community possesses and ascribes to protection of fundamental rights shared by Germany and constitution, the Federal Court will not exercise its right to review such legislation as it will recognise the legitimacy of Community law in this area.

- German will remain on guard!

Internationale Handelsges. m.b.H. [1972] CMLR 177 When ratifying the EEC Treaty (and transferring sovereign powers to an int’l organisation by virtue of Article 24), German legislature could not disclaim the observance of basic rights in the constitution. If it was so, constitutional law would be eliminated as the highest national check on European legislation. The constitution would be rendered ineffective if a supranational purely executive regime would be able to override fundamental principles of the German constitution.

Solange I decision (1974, BVerfG) Article 24 does not open the way to amending the basic structure of the constitution without formal amendment. Any amendment of the treaty which would destroy the identity of the German constitutional structure will be nullified. Fundamental rights guaranteed by the constitution are an inalienable, essential feature, not subject to qualifications – these fundamental rights will prevail over community law!

Solange II decision (qualified Solange I a bit) So long as the EC generally ensure an effective protection of fundamental rights as against the sovereign powers of the EC, in a way which is substantially similar to the protection of fundamental rights ensured by the constitution: the Constitutional Court will no longer interfere. Constitutional Court will no longer review secondary Community legislation by the standard of fundamental rights in the Constitution.

Brunner v. The European Union Treaty [1994] 1 CMLR 57 The German Constitutional Court held that he EU Treaty does not establish with sufficient certainty the intended programme of the integration. If it is not clear to what extent the German legislature has assented to the transfer of sovereign powers, it will be possible for the EC to claim powers which were not specified. Germany is one of the ‘Masters of the Treaty’ and retains the power to revoke adherence to it by a contrary act. EC’s authority is derived from the member states, and EC law can


EU LAW I – Prof. De Mestral Fall 2004only have binding effect within Germany upon German instruction that its law be applied.

This was a warning by the German Constitutional Court that Germany’s acceptance of the supremacy of EC law is conditional. The Court asserted its jurisdiction to review the actions of the EC institutions that they remain within the limits of their powers.

c. The United KingdomThe central obstacle to supremacy of EC law is the fundamental constitutional principle of parliamentary supremacy: Parliament has the power to do anything it wants other than to bind itself for the future. International treaties signed and ratified by the UK are not part of domestic law. To be enforceable, they must be domestically incorporated by an Act of Parliament.

The European Communities Act 1972 made EC law binding in the UK:2(1): “rights, powers, liabilities, obligations, and restrictions from time to time created or arising by or under the Treaties shall be recognised and available in law, and be enforced, allowed and followed accordingly.”2(2): implementation of community obligation is possible by Order in Council, even if replacing UK law.3: questions as to the meaning and interpretation of community law shall be treated as questions of law [thereby courts can directly apply ECJ decisions as precedent]

Shields v. Coomes Denning accepted principle of supremacy of EC law, by saying that Parliament by enacting European Communities Act intended to abide by the principle of direct effect and supremacy.

BUT…

Macarthys v. Smith The court held that there is a presumption that Parliament intended to accept the principle of supremacy of EC law. So, if no express mention, EC law prevails over UK law. But if Parliament deliberately passes an Act with the intention of repudiating the treaty or EC law, and says so in express terms, UK act prevails over EC law.


EU LAW I – Prof. De Mestral Fall 20047. FUNDAMENTAL HUMAN RIGHTS

7.1 IntroductionWhat is the relationship between EC and national law in light of the doctrine of supremacy? The ECJ asserts that community law is supreme, and justifies this with respect to human rights by saying that there is a broad protection of human rights in community law. This idea – that human rights protection is a principle of community law – is raised in many cases.

TEU Articles dealing with human rights:o Art 2 – Union as freedomo Art 6 – Fundamental freedoms, rule of law, Union should respect

fundamental freedomso Art 29 – Union can take measures to protect human rightso Art 49 – Conditions for admission – entry is only allowed if HR are

respectedTEC Articles dealing with human rights:

o 3.2, 12, 13, 16, 17-22, 43(?), 61(?), 127(?), 136, 137, 141, 149(?), 151(?), 174, 177, 177.2, 181, 191, 195, 222, 230.1, 234, 288.2, 295, 309.

o For example: Art 12 is directly effective (discrimination on grounds of nationality prohibited). This is a command to the community. The effect of these statements is powerful.

7.2 Fundamental Rights and General Principles as Binding on Community a) ECJ’s resistance- Resistance by ECJ b/c principles of fundament rights brought up by national

jurisdictions, which wanted to see these rights present in EU litigation. ECJ didn’t acknowledge these b/c feared that this would subordinate EU Law to national constitutional principles.

- Stork and Geitling and Sgarlata cases where ECJ rejected the rights protected within German constitutions.

i) Stork: ECJ has no power to examine a ground of complaint, which maintains that, when it adopted its decision, it infringed on principles of G constitution;

ii) Geitling: ECJ rejected relevance and dismissed suggestion that Community law gives similar protection ECSC Treaty does not contain these general rights principles.

b) ECJ more receptive – change in approach!!- Stauder: ECJ didn’t reject or accept FR principle, but acknowledged indirectly &

stated that “FHR is part of the general principles of EC law” and any infringement on human dignity should be avoided.

c) FR as grounds for annulment of EC LawThere is a question about the reach of community law in this area. For example, does it reach the situation of equal treatment in the workplace? What about if a woman is denied employment in a combat unit of the German army?

Brunner Case [1994] – Fed Con Crt Germany Facts: A challenge by a German law professor re: capacity of German state to ratify the Maastricht treaty.


EU LAW I – Prof. De Mestral Fall 2004Held: Community jurisdiction is limited – it is only applicable to limited factual circumstances. “The Union Treaty as a matter of principle distinguishes between the exercise of a sovereign power conferred for limited purposes and the amending of the Treaty, so that its interpretation may not have effects that are equivalent to an extension of the Treaty.” The community is not able to move beyond the jurisdiction that Member states have assigned to it through the treaties.

International Hangdelsgellschaft [1970] Facts: Company obtains an export license, following a community regulation. The national court held that the deposit system contradicted national constitutional law, in particular the principle of proportionality.Held: - System of deposits was contrary to German constitutional law, but recourse to

national law rules or concepts in order to judge the validity of community measures would have an adverse effect on the uniformity and efficiency of community law. This is because community law cannot be overridden by national laws, irrespective of their nature

- The validity of such measures can only be judged in light of the community law. - The respect of fundamental rights forms an integral part of the EC law. The

court decided that general principles of Human Rights Law form part of the general principles of community law and come under the heading of Art. 173(3)(1). Inspired by MS constitutions. (Supremacy)

7.3 Sources of FR derived by the ECJ- Source not entirely independent of MS legal cultural and traditions.- ECJ linking EU law with ECHR principles as a source: Johnston, P v. S, Coote,

Rutili.- Analogy with int’l legal principles to which all MS have acceded to provisions

of these conventions form an integral part of Community law. ECJ maintains autonomy and supremacy of EC law by having various sources to which MS have already agreed to – increase legitimacy of principles

- 1977 official legitimacy (symbolic) was given to the ECJ’s ruling through joint declaration of 3 bodies that formal commitment to ensuring respect for fundamental rights in the exercise of their powers.

Nold v Commission [1974] Facts: Company is a coal wholesaler. Commission decision allows coal selling agency to adopt restrictive criteria. Company wants this decision to be annulled, arguing that it breaches fundamental rights. Held: - FR form an integral part of the general principles of law. In safeguarding these

rights, the court is bound to draw inspiration from the constitutional traditions common to the MS.

- ECJ cannot uphold measures that are incompatible with FR recognised by MS constitutions or int’l treaties, on which the member states have collaborated or of which they are signatories can supply guidelines, which should be followed within the framework of the common law.

Just b/c a national law regards s\t as a fundamental right or freedom, doesn't mean that the community law does as well. The community law is supreme and the Treaty is an indep. source of law, therefore, we must look at the community law on its own, but we can look at the constitutions of member states to draw guidelines.



Hauer v Land Rheinland-Pfalz [1979] Facts: Question of ownership rights. A woman wanted to plant new vines but Community regulation disallowed it in that region. She argued that the regulation was incompatible with community law.Held: Individual was unsuccessful. Court reaffirms that in deciding whether community law respects fundamental rights, it ought to draw inspiration from all member states’ constitutions and international treaties, including the European Convention. Here the court considered restrictions on property rights under the ECHR. It also pointed to provisions of the German, Italian and Irish Constitutions which restricted property use in order to promote public interests.

AM & S [1982] Facts: Competition law question – must the principle of confidentiality be abided by? A company alleged that the community in its investigations could not breach the confidentiality provision. Held: Another case where the community looked to standards in member states to determine the general principle. It used a ‘comparative survey’ of the laws of member states (CB 328). Given its commitment to human rights, the court upheld the observance of confidentiality as a common principle of member states. Policy behind this - whenever the court is itself an administrator, it must set high standards of protection for human rights.

Defrenne v. Sabena IIIECJ drew on ILO and European Social Charter for fundamentals of sex discrimination in employment and occupation.Summary of these cases

1. EC Law is made and applied in conformity with fundamental HRs.2. Human rights are drawn from the principles of all member states – however

they can only inspire rather than be applied by the community.3. ‘Sources of inspiration’ include international treaties and constitutions of

member states. However the way in which the court has derived rights from these sources is still unclear – it seems to make decisions on a case-by-case basis.

4. The most common source of inspiration drawn upon by the ECJ is the European Convention on Human Rights.

5. Fundamental rights claims seem to be more successful when individual administrative acts are called into question, rather than legislative policy.

7.4 Standard of Protection for EU FR2 essentials:a) Deriving rights from the sources of inspiration


EU LAW I – Prof. De Mestral Fall 2004- ECJ endeavour to legitimize the development of unwritten general principles of

EC law by grounding them in positive legal sources. I.e., MS constitutions & Int’l Agreements

- These, however, may be of the common lowest denominator not providing and good standard of protection.

- Use ECHR as ‘formal externality’ to be placed alongside Art 6 TEU, which expressly refers to ECHR, which has special significance.

- Some argue for ‘maximum universal standard’ while other are afraid of the lowest common denominator. ECJ has never expressed which one it wants to lean for, but it maintains that EC law is independent and autonomous in its principles & uses case-by-cases analysis.

- Claims have been more successful in disputes of individual administrative acts e.g., staff cases or competition proceedings than challenges to legislative policy.

b) Approach to understanding whether a breach of FR has occurred Exceptions & Limitations to Protection of FR- Which should be protected & how? Different degrees of protection for

different rights variations from states (p.330).- Despite the fact that ‘general principles of law’ would take precedence, in the

event of conflict btw a FR and specific Community measure, Community legislation will often not be impeded by the seemingly breach of a FR. (Nold)

These rights are protected by law subject always to limitations laid down in accordance with public interest.

- In Prais and Haure, ECJ doesn’t annual the Community measure, but notes that there should be steps taken by the Council or appropriate body to infringe least possible on the right to religion or trade & property.

ECJ making statements…judicial hints for legislation.

- Biotechnology (Netherlands v. Council) Case 2001: Art. 5(1) ensures human body dignity and its formation and development – these may not be patentable inventions.

ECJ showing deferred to legislative measures & rarely annulling such for breach of FR.

Challenging Administrative Acts for Violation of FR- Challenges to administrative acts has not been successful overall- There are 2 types:

Staff CasesCASES1. Oyowe and Traore- ECJ asked Commission to change its employment practice in relation to

journalists working for EU in ACP, who were asked to maintain certain allegiance that infringed on their freedom of expression.

2. Connolly v. Commission- ECJ concluded that a balance had been achieved btw freedom of expression & requirement of allegiance when former employee of Commission published a book exposing wrongs of EU.

3. X. v. Commission (art. 8 of ECHR) (AIDS test without consent)- Effectively breach of FR: respect for private life as protected by Art. 8 ECHR &

deriving from constitution of MS. ECJ referring to ‘sources’ of FR.

a) Competition Proceedings


EU LAW I – Prof. De Mestral Fall 2004- Concern individual admin or executive action rather than discretionary power

from legislative policy- These powers are broad i.e., searches, investigate, impose financial penalties,

etc.

CASES1. Hoechst (arguing procedural rights and inviolability of the home) also NiemietzCase- Regulations cannot be interpreted in a way that gives rise to results that

are incompatible with the general principles of Community law and with FR.- Distinguish between privacy of persons and undertakings: MS have

divergences on the degree of ‘privacy’ afforded to firms cannot sum these rights.

- ECHR is not relevant here b/c is pertains to man’s personal freedom, which is recognised by Community law.

7.6 Do general principles of Community law bind member states?The ECJ will assess compatibility of national laws with fundamental rights. When member states enforce rules based on community law, they must act in accordance with fundamental human rights. This has led to complex case law.

a) MS applying provisions of EU law that are based on protection for HR- ECJ requires that national law be reviewed in conformity with EU law as it is a

manifestation of recognised general principles of law, principles also existent in the ECHR, which are nothing other than principles derived from MS’s own constitutions. (Johnston and Rutili MS duty to give effect to principles, which are set out in EU directives that are derived from their own constitutions & the ECHR, which they signed onto as well.)

Johnston v Chief Constable [1986] Facts Woman told that she can no longer work in the RUC because female reserves could no longer be armed. The UK relied on a derogation in the Equal Treatment Directive to justify this. The Government then issued a certificate that this had been done in the interests of national security. Was this action proportional and reasonable in the circs? Johnston relied upon the remedial provision in Art 6 of the EC Directive.Held Article 6 reflects a general principle of law that reflects both the constitutions of member states and the ECHR. Art 6 stands for the principle that every person has the right to obtain an effective remedy in court. Member states should be ensuring effective judicial control to be aligned with this community provision. The UK govt issuing the certificate infringed upon the principle of effective judicial control.

NOTE: in this case, the ECJ was essentially reviewing a national law.

b) MS as agents of EU law i.e., enforcing EU policy and interpreting EC rules- Assessment of compatibility btw MS and EU law in two contexts:

i) Compatibility of MS law with EU law, which reflect certain fundamental principles or rights;

ii) When MS implement EU law acting as EU agents.- MS must interpret and implement Community law so to respect ECHR

principles, even if these are not themselves embodied in Community measures. (Rutili and Johnston)

- Seminal : MS are bound when implementing EU Law by all the same principles and rights, which bound the Community in its actions. (Wachauf (1989))

c) MS Derogating from EU law requirements


EU LAW I – Prof. De Mestral Fall 2004- When an area or justification by a MS falls within public interest, public health

or national security, MS may derogate from EU law principles (Art. 46 and 55). This only in so far as the national law does not fall within the jurisdiction of Community legislation.

- Art. 51 ECHR: The provisions of this Charter are addressed to the institutions and bodies of the Union … and to the MS only when they are implementing Union law.

Commission v Germany [1989]Facts Regulation on migrant workers that allowed worker’s families to move with the worker to the Member State so long as there was housing that was considered normal for workers in that region. A German law required that family residence permits were conditional upon appropriate living conditions throughout the period of residence.Held German legislation was incompatible with community law. Member state must act and legislate in a way that respects the rights set out in the ECHR.

Kent Kirk Retroactive provision that would negatively affect fisherman.Held The provision violates the general principle of non-retroactivity that is enshrined in Art 7 of the ECHR.

Wachauf v Germany [1989] Stands for principle that when implementing community law, member states are bound by the same principles and rights that bind the community as a whole.Facts German law for discontinuance of milk products based on Regulation. Tenant farmer didn’t get the compensation because his landlord withdrew consent (required by the German law). Held If a community rule deprives the lessee of compensation, this would be incompatible with the fundamental human rights in the Community. Therefore, member states must also be bound by the same fundamental human rights that bind the Community.

Cinetheque Facts Alleged restriction on free movement of goods. French law disallows films to be shown as videos for 12 months.Held This restriction on inter-state trade was justified because it was non-discriminatory and it had an underlying policy of trying to outlaw cinematic exploitation. “Duty of ECJ is to ensure observance of FR in the field of Community law, it has no power to examine the compatibility with the ECHR of national law which concerns an area which falls within the jurisdiction of the national legislator. (p. 342)

Elliniki Radiphonia [1991] – Greek radio case (Art. 46 & 55) (freedom of expression, movement of goods broadcasting)If the scope of the exception is covered by community law, then there is a duty on states to follow community law and human rights.Facts Greek states grant exclusive broadcasting rights to ERT radio and TV Company. Two other companies start broadcasting; argue that the statute breaches community law and fundamental rights under ECHR freedom of expression.Held:


EU LAW I – Prof. De Mestral Fall 2004When a MS has a rule that obstructs e.g., the exercise of freedom to provide services, which is usually provided for by EU, this national law must be interpreted within the scope of general principles of law i.e., FR. As such, ECJ may review the compatibility and must ensure its respect for FR – here Art. 10 of ECHR (freedom of expression). ECJ expanding its scope of jurisdiction

Familia Press Facts: Austrian law makes it illegal to publish games of chance without authorisation. German magazine does this and alleges that Austrian law violates freedom of press and of expression.Held The Court goes along with this, saying that the issue should be interpreted in light of fundamental rights. This case led to the Advocate General saying that there is a fundamental code of justice that follows community members.

d) Limits to the scope of EU law and to the domestic application of EU FR- Assess which situations lie outside the FR jurisdiction of the ECJ :::: - Cases confirm the above ruling Konstantinidis, Grado and Bachir, Maurin,

Kremzov.- A situation not falling within Community jurisdiction when: (Kremzow)

i) Act doesn’t fall within the Treaty provision invoke (freedom of movement or other) & not seeking to exercise this right;

ii) The national legislation in question was not implementing EU law or securing compliance with it.

Art. 51 ECHR as above sets out boundary, but blurry!

7.7 FR and role of political institutions- 1977 Joint Declaration approving the role of ECJ in joining to EC law general

principles of FR.- Art 6(2) TEU provides that the Union would respect ECHR and national

constitutional traditions and HR and FR – also within two new pillars of TEU.- P. 350 ++ general discussion on treaty changes to viewing FR within EU law.- EU becoming member party to ECHR? If it did, ECJ would no longer be the

arbiter of cases involving HR. Effectively ECJ has bound EU to ECHR through rulings. ECJ ruled in opinion 1994 that Community lacked competence under Treaty to accede to ECHR agreement. (p. 351)

- Joining the ECHR is not an issue in terms of the principles it represents, but because of Art. 235: it would bring fundamental institutional and constitutional changes, which would require Treaty amendments with national ratification process beyond jurisdiction of Community.

- Art 51 mentioning Subsidiarity and that no new competences are created from this provision. Art. 13 did create new EC power to combat discrimination, but only in areas within the limits of the powers already conferred on EC by Treaty.

7.8 Charter of Fundamental Rights- 1999 European Council launched drafting of Charter of FR.- 2000 Charter approved by MS at Nice Summit


EU LAW I – Prof. De Mestral Fall 2004- While EU recognised right, freedoms and principles set out within Charter, this

document now is a distillation of the rights contained within MS constitutions, int’l agreement and other instances drawn by the ECJ

- 6 chapters: dignity, freedoms, equality, solidarity, citizens rights, justice

- p. 359 description of these chapters

- Chapter 7 : general clauses that relate to the applicability and scope of the Charter relationship btw this and other legal instruments.

- Art. 51(1): Charter applies to EU institutions and MS, when they are implementing Union law.

- Art. 51(2): No new powers are here created for the EU.- Art 52(2): Some derogation will be accepted i.e., those provided for by law,

and yet respecting the essence of those rights and freedoms.- These limitations must respect proportionality and must be necessary and

genuine in meeting the general interests recognised by the Union.- Art. 52(3): Reconciling and promoting harmony btw ECHR and Charter, while

allowing EU to develop new rights and protection.- Art. 53: refers to ECHR, constitution of MS and other agreements as sources &

harmony.- Is the ECJ really the right system to satisfactorily adjudicate on human rights?- Criticism that ECJ focuses too much on the primordial function of promoting

economic integration at the expense of not requiring MS and EU policy/law to conform with HR standards within its own Charter.

- Forgotten that the Treaty objectives being more economic often have social and moral consequences dignity of human bring and FR should be upheld and within judgements. (p.365)

- The Charter is being invoked at ECJ, Advocate General, CFI, Ombudsman, Comm and Parliament.

Complex and cooperative role btw ECJ and ECHR is seen because of the increased highlight through # of cases brought before the CFI and the ECJ, in which ECHR jurisprudence is cited and used, and the # of cases against MS in front of the EctHR to challenge EU law. (Emesa Sugar and Matthews) p. 366

Accession to the ECHRBackgroundThe Council wanted an opinion about whether the Community could accede to the ECHR. The court has already said a number of times that it is bound to respect the rights set out in the ECHR. Therefore, the main difference would be that the Community would be subject to review by the Court of Human Rights.

Opinion on Accession to ECHR [1996] Institutional Implications: ECJ states that ECHR has special significance for the Community. However,

acceding to the convention would substantially change the institutional system. These institutional implications would be of constitutional significance, going beyond the scope of Article 235.

Because of the principle of supremacy of Community Law, the court suggested that the Community would not necessarily be able to abide by a European Court of Human Rights decision.

Incompatibility Parts of ECHR clearly apply – but not necessarily the whole scope of the European

Convention. The Convention deals with more areas than the community does.

In the draft treaty, Art 7 tells the Union to seek ratification of the ECHR. However the question remains: what if the ECJ and ECHR have different ideas on human rights?


EU LAW I – Prof. De Mestral Fall 2004Note that this is probably unlikely since the ECJ draws so heavily on the European Convention.


EU LAW I – Prof. De Mestral Fall 20048. GENERAL PRINCIPLES

8.1 IntroductionIn 1999, there was an initiative by the European Council to draft a Charter of Fundamental Rights. The draft is to be decided upon in Intergovernmental Committee meeting in 2004. The draft Charter has a lot to do with fundamental rights and freedoms. But the EU is really an economic/monetary Union. Why has it done this? Is it a power grab? Part of this is the procedural requirements – that you can’t disregard fundamental procedures when enforcing EC regulations. But does this justify a full blown charter of rights? For example why does it deal with torture?

The first six chapters of the Charter are headed: dignity, freedom, equality, solidarity, citizens rights, justice. Chapter 7 is a general clause dealing with applicability of the charter, relationship to other legal instruments etc. Article 51 applies to institutions and bodies of the EU and member states only when implementing EU law. No new power or task is imposed upon the EC or EU through the creation of the Charter.

Article 52 – general derogation clause – restricts charter rights that will be acceptable. Must be provided for by the law, must meet requirements of proportionality, must be ‘necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others…’

The Community’s meddling in HR has been criticised on several grounds, including extending influence in an area where states are culturally and ideologically diverse, thereby oversimplifying the law. Also criticised for using the language of rights only to advantage economic interests. Finally, the argument that the EHRC should be the body that deals with HR. This area is not what the community is about.

Counter-arguments include that ensuring a HR commitment would enable the EU to boast of an ethical foundation that it may currently be lacking. A shared commitment to HR could be a unifying force for the legal system. It could also give more political legitimacy to the institution.

The Matthews case illustrates the fundamental prospect for tension between the ECJ and ECHR.

Matthews Voting for the European Parliamentary elections is by universal suffrage. However, if you are a citizen of Gibraltar, you have no vote. This arises from interpretations of the treaty and also a question of the status of Gibraltar (UK vs Spain). This denies a right to people that is protected by the ECHR. ECHR – says that Britain has denied a right under the European Convention. Says that it is not off the hook just because the Community Law says so.

NOTE: in the Matthews case, the P went to the ECHR, not the ECJ. A potential for conflict. There have also been other attempts to go before the ECHR - alleging that one or all community members are contravening the ECHR.

8.2 General principles of EC lawThese principles are an interpretive guide and part of judicial review principles.

1. Proportionality


EU LAW I – Prof. De Mestral Fall 2004Enshrined in Art 5 TEC. Action by the community ‘shall not go beyond what is necessary to achieve the objectives of the Treaty.’ Can use this to challenge community actions and state actions that apply community law.Look at whether a decision was proportionate via:

1) Was it suitable to achieve a desired end?2) Was it necessary to achieve that end?3) Did the measure impose a burden on an individual that was excessive

in relation to the objective sought to be achieved?

Three types of cases can be subject to the proportionality test. (p. 373) Crucial issue is the intensity with which the ECJ applies the proportionality test.Important is also the degree of deference that the ECJ will give to the EU institutions when a piece of legislation is placed into question. If it is a matter that is strictly of EU competence and ‘dear’ to the fundamental structure of the union i.e., CAP (Art. 33), the ECJ is likely to give right to the EU institution and not the challenger.

(i) Individual whose rights have been unduly restricted by admin action (boundary btw individual rights and MS actions) ECJ vigorously scrutinizing;

(ii) Attack on the penalty imposed that is deemed excessive ECJ does a fair bit of scrutiny as might infringe on personal liberty;

(iii) Individual arguing that the policy choice made by admin is disproportionate to the objectives ECJ according deference

e.g. Hauer case (against Community action)Court asked whether restricting vine construction was disproportionate in impinging upon right to property. Found here that it wasn’t because the object was to attain a balanced wine market etc.

R v Minister for Agriculture [1990] Facts Directive prohibited certain hormonal substances in livestock farming. Manufacturers and distributors of vet medicine challenged this, including that the Directive was not proportionate.Held In the area of CAP, the community has a discretionary power. Therefore, legality of a common agricultural policy would only be affected if the measure was ‘manifestly inappropriate’ to the goal that was being pursued.

e.g., Cassis de Dijon (Against MS action)

2. Legal Certainty and Legitimate ExpectationsProcedural Question: norms will be interpreted to have retroactive effect if it clearly follows from their terms or the general principles of which they are part.Substantive Question: courts will strike down actions if there is no pressing community objective demanding it or where legitimate expectations of those affected cannot be respected. e.g Kent Kirk – fishing legislation was deemed retroactive.

Legitimate expectations can be protected if assurances from a community institution caused an individual to entertain an expectation.

Mulder [1988] Facts Milk producer abided by community deal. When he applied to resume production, he was asked to prove something he couldn’t have done under that deal. Held This frustrates the producers’ legitimate expectations to the point that the system would have been ineffective.

3. Non-discriminationAmsterdam Treaty inserted Article 14 into the Treaty.Also evident in other references throughout the treaty to non-discrimination.


EU LAW I – Prof. De Mestral Fall 20044. TransparencyIt is still debated whether this one is a general principle of EC Law.Overall, it requires that there is transparency in the following ways: meetings take place in public, the provision of information should be transparent and right of access to documents.

9. ENFORCEMENT OF EC LAW AGAINST MEMBER STATES

9.1 Introduction- Art. 211: Commission entrusted to ensure the proper application of EU Law

to monitor MS compliance and to respond to non-compliance.- Art. 226: Judicial proceedings against MS available: general enforcement

procedure, giving Commission broad power to bring enforcement proceedings against MS.

- Began as a diplomatic effort dispute resolution – Now, Commission may request ECJ to impose penalty on MS Art. 228.

- Art. 226: Commission initiates process either in response to a complaint from someone in a MS or through its own initiative.

Commission has limited resources citizens contribute through information gained to the better implementation of EU measure and creates a participatory Community.- Issues of transparency: Commission publishes disputes and formal procedural

settings of complaints. It role was reviewed by the Ombudsman’s office.- Individuals attempts to obtain documents relating to Art. 226 proceedings have

been frustrated for reasons of confidentiality and public interest. Petrie Case p. 399.

Article 226 (Enforcement Procedure) If the Commission considers that a Member State has failed to fulfil an obligation under this Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations.If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court.

The Commission initiates Article 226 proceedings, either in response to a complaint from someone who is a citizen of a member state or on its own initiative. Complaints from citizens are a significant source of infringement detection. There is debate about how well the Commission responds to individual complaints.

CASE1. Petrie- So far as concerns the applicants' argument that proceedings under Article 226

EC seeking to establish the facts relating to the infringements of Community law complained of must respect the audi alteram partem principle, it must be noted that individuals are not party to proceedings concerning failure to fulfil obligations and for that reason cannot invoke rights to a fair hearing involving application of the audi alteram partem principle.

Criticism of Art. 226 proceedings by Rawlings under Democracy & Legitimacy as important principles. P. 400.


EU LAW I – Prof. De Mestral Fall 20049.2 Operation of the ProcedureThere are four stages to the procedure:

1. pre-contentious: Member state can explain its position to the Commission, they can try to reach a compromise.

2. formal notification: if it is not resolved in the first stage, the state is formally notified of the infringement and is given two months to reply.

3. reasoned opinion: if negotiations have taken place and still nothing is resolved, the commission can give a reasoned opinion – sets out the grounds of infringement and marks the start of the time period in which the state must comply or else it will go to court.

4. if the state does not comply at the third stage, the matter is referred by the Commission to the ECJ.

Note that this procedure is not always effective. The Commission has limited time and resources, and there are pragmatic and political calculations. Even if an enforcement action is brought against a member state in the ECJ, this will not necessarily lead to compliance by the member state.

Art 228 (pecuniary penalty) The penalty must be determined according to a number of factors, including: seriousness of the infringement, duration and ensuring that a deterrent impact is created. It should take account of the gross domestic product of the state and the number of votes it has in the council (Commission v Greece [2000]). Therefore, the penalty should be appropriate in the circumstances and proportionate to the breach and to the ability of states to pay.

Public enforcement is only one means of enforcing the application of Community law. By developing the doctrine of direct effect, the ECJ was, in part, circumventing the problem of states’ failure to implement directives – allowed a private direct enforcement capacity. Individual proceedings are intended to protect individual rights, while Commission enforcement is intended to ensure the uniform implementation of Community law.

Art. 226 not most effective way to ensuring enforcement of EU Law: i) Commission doesn’t have resources to detect and pursue national

infringement;ii) Pragmatic & Political reasons: even if it had resources, political

discretion might play in. “Commission discretion allows, and scarce resources dictate, an ordered policy of selective enforcement.” Rawlings

iii) Enforcement actions successfully brought before the ECJ do not always lead to compliance – even with Art. 228, which can impose a penalty on a MS.

Sharpening Enforcement: Pecuniary Penalty - Art 228- There is no upper limit of pecuniary penalty & ECJ has no way of collecting this

penalty fee and no jurisdiction to do such under Art. 228.- Mechanism for calculating penalty was introduced in 1996 with the entry of TEU

in 1993. Criteria:i) Seriousness of infringementii) Durationiii) Need to ensure that the penalty itself is a deterrent to further

infringement

First substantive case:1. Commission v. Greece (1997)- Those guidelines, setting out the approach, which the Commission proposes to

follow, help to ensure that it acts in a manner which is transparent,


EU LAW I – Prof. De Mestral Fall 2004foreseeable and consistent with legal certainty and are designed to achieve proportionality in the amounts of the penalty payments to be proposed by it.

- The Commission's suggestion that account should be taken both of the GDP of the MS concerned and of the number of its votes in the Council appears appropriate in that it enables that MS’s ability to pay to be reflected while keeping the variation between MS within a reasonable range.

- It should be stressed that these suggestions of the Commission cannot bind the Court.

- First, since the principal aim of penalty payments is that the MS should remedy the breach of obligations as soon as possible, […] appropriate to the circumstances and proportionate both to the breach which has been found and to the ability to pay of the MS concerned.

- Second, the degree of urgency […] fulfil its obligations may vary in accordance with the breach.

- In applying those criteria, regard should be had in particular to the effects of failure to comply on private and public interests and to the urgency of getting the MS concerned to fulfil its obligations.

Between the Public and the Private enforcement mechanisms- Art. 234: DE of ECJ over national law – ECJ gives preliminary ruling on

interpretation of EU law, national court spell out implication of that ruling in a case.

- Art. 226-227: ECJ pronounces directly on the compatibility of MS with EU law- Art. 226: If the Commission considers that a MS has failed to fulfil an obligation

under this Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations. If the States concerned does not comply with the opinion with in the period laid down by the Commission, the latter may bring the matter before the Court.

- Art. 227: A MS which considers that another MS has failed to fulfil an obligation under this Treaty may bring the matter before the ECJ. Before a MS brings an action against another MS for an alleged infringement of an obligation under this Treaty, it shall bring the matter before the Commission.

- Difference btw private & public: Molkerei-Zentrale: ECJ:Two kinds of proceedings: have different objects, aims, effects and no parallel!Proceedings brought by an individual were intended to protect individual rights in a specific case, whereas Commission enforcement proceedings were intended to ensure the general and uniform observance of EU Law.

CASE1. Van Gend en Loos- Individuals may also bring claim about non-compliance before ECJ

2. Commission v. Germany- Even if it may be that a MS is bound by principles of its own constitution that it

was sufficient to correctly implement a directive without further legislative change, this is no ground for not implementing that provision properly.

- We need this implementation to provide legal certainty, clarity and transparency in EU law.

- Can’t rely on DE to evade obligation of a directive.

9.3 Discretion of the Commission - Extent of Commission’s discretion under Art. 226.

i) Political role of organii) Art. 226(2): ‘may’ bring in front of ECJ (is this a real obligation?)iii) ECJ doesn’t look at motives of why Comm brought claim


EU LAW I – Prof. De Mestral Fall 2004iv) Time frame given to respond by reasoned opinionv) Negotiation is main part of Comm dispute settlement

There is general agreement that Art 226 gives the Commission discretion over whether and when to issue a reasoned opinion. The court has tried not to place too many limitations on this discretion.

MotiveHowever the court will not look at the motives of the Commission for bringing enforcement proceedings: Commission v UK [1988] – the UK contended that there was a political motive behind the Commission’s application but the Court would not consider the motivations of the Commission. The absence of a motive is also irrelevant for admissibility of enforcement proceedings.

Timing The ECJ can impose some constraints on the Commission with respect to timing – in certain cases it could be found that there was an excessive delay in bringing a case before the Court. This could make it more difficult for the member state to refute the arguments of the Commission: Commission v Netherlands [1991] – obiter. In Commission v Belgium [1988], the Court found that the Commission’s action was inadmissible because of the short amount of time that was allowed to respond to the formal notice and reasoned opinion. In Commission v Luxembourg [1996], four months to respond to a reasoned opinion was enough because the Member State had three years notice of the Commission’s view.

Reasoned OpinionThis is the way that the Commission officially communicates to the state what the substance of the complaint is. It also outlines the time period within which the violation of community law has to be remedied to avoid the matter being taken to court. The court has said that there must be a coherent statement of the reasons in the reasoned opinion: Commission v Italy [1961]. This includes the grounds that will be relied upon in the proceedings and the particular complaints that will form the subject matter of the proceedings. The initial reasons given in the letter of formal notice do not have to meet strict requirements. But the reasons given in the reasoned opinion and brought before the court should correspond with the essence of the formal notice.- Reasoned Opinion – Art. 226 [read with Art. 10: Comm’s role to monitor

compliance!]:i) Pre-judicial instrument: means of protection for MS (they prefer

this, where ECJ has declaratory effect & national law has time to change)

ii) No binding effectiii) MS may contestiv) ECJ doesn’t question Comm’s reasons

MS says to ECJ that reasoned opinion has no adequate reasoning: ECJ “It must be considered that it does have sufficient statement of reasons to satisfy the law when it contains a statement of the reasons, which led the Commission to believe that the State in question has failed to fulfil an obligation under the Treaty. p. 413

Changing the subject matter of an actionIf the Commission changes the subject matter of its allegation after the reasoned opinion has been issued, the whole process under Article 226 will have to be initiated again: Commission v Italy [1970]. This requirement that the reasoned opinion should correspond to the arguments brought before the court has been reiterated in many judgements. There are a few situations where this varies slightly, for example: if EC legislation on which the reasoned opinion was based changes before it gets to court, the commission doesn’t have to withdraw the action or issue a


EU LAW I – Prof. De Mestral Fall 2004new reasoned opinion so long as the change limits rather what it says in the reasoned opinion rather than expands it.

ConfidentialityThe requirement of confidentiality remains even after the matter has been brought before the ICJ: Petrie. Practically, this means that access to the letters of formal notice and reasoned opinions should be denied.

9.4 Admissibility of enforcement after breach is remediedThe court has declared an action admissible even when the state in question has remedied the breach since court proceedings were initiated. The issue for the ECJ under Article 226 is whether the Member State was in breach at the time that the Commission initiated proceedings. (Note that this is different from Article 232).

A few reasons have been offered for this approach:1) Commission’s continued interest in bringing the action: court should still see

whether a failure had occurred. This will deter countries from reversing their actions just before a judgement comes out.

2) Need to rule on legality of short breaches: should still be held liable for a breach of the Treaty for a short duration. The length of the breach is no indication of its gravity: Commission v Greece [1988].

Establishing the liability of a defaulting member state: an ECJ finding of an infringement may be helpful in later proceedings to establish the illegality of state action when damages are sought for loss caused by the action: Commission v Greece [1988].

9.5 Types of Breaches by MS of Community LawArt. 226: General description of a MS’s violation for the purposes of enforcement proceedings.The Commission must simply see that the MS has failed to fulfil an obligation under the Treaty.

Kinds of infringements that are more ‘popular’ than others:i) Breach of the obligation of co-operation under Art. 10. e.g., Commission v.

Netherlands (failed to notify the implementation of certain directives Commission claimed that MS had failed to meet requirements)

ii) Inadequate implementation of EC lawiii) Failure to give proper effect to EC law (Art. 10)iv) Action by the Court of a MS

9.6 State Defences in Enforcement Proceedingsi) Force Majeure (e.g., Commission v. Belgium: difficulty in parliamentary

procedures do not grant a valid reason for the wrongful implementation of EU Law)

ii) There was no opposition to the application of EC Lawiii) Community measure on which the infringement proceedings are based is

illegal (e.g., Comm v. Greece: if a MS truly had something against a provision/decision, it had time to object to it under Art. 230 for annulment. Not the time to object after it has been passed by Brussels)

iv) Other MS are also in breach.

9.7 Art. 227 Any MS may bring action against another MS, which it considers in breach of the TreatyPolitically sensitive proceedings!


EU LAW I – Prof. De Mestral Fall 2004MS Comm both MS written/oral submission to Comm Comm Reasoned Opinion ECJ

9.8 Interim MeasuresArt. 242 & 243: ECJ may prescribe that a particular provision be suspended of its use until the case closes & may grant interim measures.


EU LAW I – Prof. De Mestral Fall 200410. PRELIMINARY RULINGS

10.1 Introduction- Art. 234: preliminary rulings procedure – ECJ’s jurisdiction – important

i) ECJ was able to develop De and supremacyii) Testing validity of EU lawiii) Discourse (btw national courts & ECJ) on the appropriate reach of

EU law when it comes into conflict with national legal normsiv) Principle vehicle for the relationship between national and EU legal

systems – relationship as horizontal and bilateral // vertical and multilateral

v) Reform of judicial system: workload ECJ & CFI

Art 234 (Preliminary Ruling Procedure) The Court of Justice shall have jurisdiction to give preliminary rulings concerning:(a) the interpretation of the Treaty;(b) the validity and interpretation of acts of the institutions of the Community and of the ECB;(c) the interpretation of the statutes of bodies established by an act of the Council, where those statutes so provide.Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgement, request the Court of Justice to give a ruling thereon.Where any such question is raised in a case pending before a court or tribunal of a Member State, against whose decision there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court of Justice.

Article 225(3) EC now confers on the Court of First Instance jurisdiction to give preliminary ruling in specific areas (see Statute of the Court of Justice). If a question is referred to the CFI which raises issues of principle, which will affect the unity or consistency of EC law, it may refer the question to the ECJ. ECJ can exceptionally review CFI preliminary rulings. Individuals have no right to refer questions to the ECJ, only national court can do so.

Through preliminary rulings, the ECJ develops EC law. e.g. principles such as direct effect and supremacy. Art 234 has been a mechanism through which national courts and the ECJ have engaged in discourse on the appropriate reach of EC law when it has come into conflict with national law. Original conception of national court-ECJ relationship was horizontal (separate = differing functions, but equal) and bilateral (ECJ ruling would have force only for that particular dispute – no precedent). Today: relationship is more vertical (ECJ sits in a superior position; ECJ and national courts form a community-wide judicial hierarchy) and multilateral (judgements have impact on all other national courts – system of precedent).

10.2 Three types of preliminary ruling procedure- Changes introduced by ToA:

i) Art. 234: general version of procedure under Pillar Iii) Art. 61-69, Title IV of Treaty with Visas, Asylum, Immigration and

Other Policies Concerning Free Movement of Personsiii) Art. 35: Pillar III

10.3 Provisions which can be referred- 3 types of matters may be referred:

i) Interpretation of the Treaty – Art. 234(1)(a)Bereczky – McGill Law58

EU LAW I – Prof. De Mestral Fall 2004234.1.a - Questions concerning the interpretation of the treaty. This includes all treaties amending or supplementing the EC Treaty. The ECJ does not pass judgement on the validity of national law. The consequences of treaty interpretation may however be that national law is incompatible and national courts have an obligation to remedy the situation (supremacy!), by e.g. setting aside the national law.

ii) Validity and Interpretation of Acts of the Institutions – Art. 234(1)(b)iii) Interpretation of Statutes of Bodies Established by and Act of the

Council – Art. 234(1)(c)

10.4 The courts or tribunals to which article 234 applies- Art. 234(2) & (3): ECJ decides whether it is appropriate body that refers. It will

take the following factors into consideration when deciding:- Whether the body is established by law- Whether it is permanent- Whether its jurisdiction is compulsory- Whether its procedure is inter partes- Whether it applies rules of law- Whether it is independent

Two views: Abstract theory (body, whose decisions are final) vs. concrete theory (body, whose are subject to review). Which theory dominates? Interpretation of Art. 234(3).

C.Broekmeulen, case 260/80 Facts: In the Netherlands, the Registration Committee for General Medicine decides who qualifies to practise medicine. A Belgian doctor was denied a license and appealed to the Appeal Committee for General Medicine. Issue: Whether the Appeals Committee qualifies as a tribunal under 234 and can refer a question to the ECJ.Held: Court recognised as being able to make reference to ECJ b/c it is a permanent body, whose decision with respect to EU law, as implemented for that area of practice in the Netherlands, is final and it operates with the consent of public authorities. From case above: Body operating with the consent and cooperation of public authorities and whose decisions are recognised as final in manners involving EC Law and matters.

NordseeThere must be close link between the arbitration procedure and the ordinary court system in order for the former to be considered a court/tribunals within Art. 234.

10.5 The existence of a question: the development of precedent- Art. 234 used only if there is a question to be answered which falls into

categories of Art. 234(1)1. Precedent: Question does not necessitate a ruling, ECJ already ruled on issue


EU LAW I – Prof. De Mestral Fall 2004CASE: Da Costa en Schaake – similar to Van Gend en Loos The national court may still refer the question to ECJ, but such an application must raise some new factor or argument. If it does not, the ECJ will strongly incline to restate the substance of the earlier case.CASE: CILFIT The same effect may be produced, where previous decisions of the Court have already been dealt with ….even though the question is not strictly identical & emerged from a different type of proceeding.

- In so far as the ECJ’s rulings are to be used by national courts in interpreting EU law in upcoming cases, the Court has a superior position to national courts.

- System of precedence indicative of a shift to a vertical hierarchy between ECJ and national courts: ECJ laying down legally authoritative interpretation, which will be adopted by national courts.

Da Costa, case 28-30/62 Facts are materially identical to the Van Gend en Loos case. The question referred to the ECJ is also identical to the question in the Van Gend en Loos case.Held: National courts have a right to refer a question to the ECJ, even when ECJ has previously ruled on the same matter. Only if national court is the court of last instance (no more national appeal), there is a binding obligation to refer questions to the ECJ. “The authority of an interpretation under Article 177 already given by the Court may deprive the obligation of its purpose and thus empty it of its substance. Such is the case especially when the question raised is materially identical with a question which has already been subject of a preliminary ruling in a similar case.” If a national court refers a question again, ECJ must rule, but it will probably just restate the substance of the earlier decision.

This case initiated a system of precedent.

CILFIT, case 283/81 A textile firm claimed that the duties they had to pay under Italian law where in breach of a regulation. Issue: Whether the obligation to refer questions to the ECJ is unconditional or whether it is premised on the existence of a reasonable interpretative doubt.Held: Where national courts consider that recourse to EC law is necessary to decide a case, they have an obligation to refer to the ECJ any question of interpretation which may arise. Where a previous decision has already dealt with the point of law in question, irrespective of the nature of the proceedings which led to the decision, and even though the questions are not strictly identical, the national court can choose to refer it to the ECJ or rely on the precedent. Encouragement to rely on prior rulings, where the substance of the legal point has already been adjudicated.

International Chemical Corporation case 66/80 Facts: In an earlier decision, the ECJ had found the regulation on which one party relied invalid. Issue: Whether the earlier judgement was effective in subsequent litigation, and regulation void.Held: National court cannot apply an act declared to be void by ECJ once again – that would render Community law uncertain. If ECJ gives a preliminary ruling to one national court, all the member states’ courts should abide by the decision too.

Firma Foto-Frost, case 314/85 National court wanted to know whether it had the power to declare invalid a Commission decision, on the ground that it was in breach of a regulation


EU LAW I – Prof. De Mestral Fall 2004Held: National courts can consider the validity of EC law to a certain extent: if grounds in support of invalidity put before them by parties are unfounded, they can say that EC law is valid. But they cannot declare legislation void: 234 gives the ECJ exclusive jurisdiction to declare invalid acts of Community institutions.

10.6 The existence of a question: the ‘acte clair’ doctrine- National court may feel that the answer is so clear that there is no need for

reference to the ECJ.- Conditions under which it is warranted that a national court acts as such was

established in CILFIT (Art. 234(3)):i) May refrain from submitting if:

Convinced that the matter is equally obvious to the courts of the other MS & to the ECJ – Otheriwse

ii) This ‘obviousity’ must be assessed: Legis drafted in several languages, all are equally authentic all

must be compared when deciding; Community terminology used in legis, which might mean

something else in MS legal system; Every provision must be assessed in context & with EU law as a

whole A decision against, which there is no national remedy and is a matter of EU law, it must be raised before the ECJ.

CILFIT case 283/81 The correct application of EC law may be so obvious, that there is no scope for any reasonable doubt as to how it must be interpreted. Conditions: national court must be convinced that to the courts of other member

states the matter is equally obvious national court must compare the different language versions and find

that the interpretation is still obvious national court must look at the provision in context and in light of

Community law as a whole, and regard the objective of the actThe national court of last instance MUST refer questions of EC law to the ECJ, unless ‘it has established that the question raised is (i) irrelevant or (ii) that the Community provision in question has already been interpreted by the Court or (iii) that the correct application of Community law is so obvious as to leave no scope for any reasonable doubt.’

ECJ, in light of the resistance of national courts to always refer questions of EC law to the ECJ, concedes some powers to national judges, but at the same time impose conditions on the instances in which the power can be used.

10.7 The existence of a question: the development of a more hierarchical judicial system- Precedent: national courts as community courts

Precedence de facto with Da Costa case changing dynamics btw ECJ and national courts: authority of ECJ now enhanced as those decisions are now authoritative on national courts. Relationship no longer bilateral, but multilateral.

- Does precedence leave open the possibility that national courts will misinterpret EU law?

i) Mistakes wont undermine precedence system: when on the aggregate decisions will be correctly interpreted – cost/benefit of


EU LAW I – Prof. De Mestral Fall 2004errors. National courts part of this network/delegate system of courts, which has ECJ at the apex i.e., judicial hierarchy.

ii) A bilateral relationship is not feasible i.e., waste of resources of ECJ to adjudicate on same issues originally meant to be such bilateral exchange, where ECJ would rule for one national court and not for all the MS courts.

- Sectoral delegation: systematic delegation to national courts Existence of sectoral delegation of responsibility to national courts system of devolution and delegation of certain application and enforcement functions of national courts e.g., competition policy (decentralisation) move away from uniformity of interpretation. Even where acte clair doctrine doesn’t fit – there can still be a sectoral division because of the accumulated weight of precedence in area exist.

10.8 The decision to refer: the national courts’ perspective- Before can refer to ECJ:

i) Question raised before a national court/tribunal;ii) National court must consider that a decision on the question is

necessary for it to give judgement. Even though Art. 234 doesn’t require this reference be necessary, but that a decision on the question be necessary to enable national court to make judgement. Bulmer Case

H.P. Bulmer v. J. Bollinger case [1974] 2 WLR 202 (English case) Issue: what are the conditions for referral to the ECJ?Lord Denning: If the national court ‘consider’ that a decision on the question is necessary: matter of discretion. Guidelines as to whether it is necessary to refer:

- question must be conclusive of the case. Without ruling by the ECJ, national court cannot render judgement

- question has not been decided in a previous ECJ ruling- national court cannot apply the acte clair doctrine to the question- court has to have all the facts decided first- length of time in which ECJ gives its ruling- importance of not overloading ECJ- it must be a question of interpretation of the treaty only (question of law),

no facts involved- unless question is really difficult and important, national court can decide it

(?!)expense of getting an ECJ ruling.

-

Criticism for narrow interpretation of ‘necessity’ & the criteria don’t all make sense i.e., costs incurred, etc.

Samex case [1983] 1 All ER 1042 The current UK approach. National courts are conscious of the advantages of the ECJ: panoramic view of EC and its institutions detailed knowledge of the treaties and subordinate legislation intimate familiarity with the functioning of the Common Market comparison of legal texts in different languages will be easier (judges

from different countries, resources)No national judge can have the collective experience of the ECJ. It is advantageous for national courts to be able to refer questions to the ECJ


EU LAW I – Prof. De Mestral Fall 2004R. v. Plymouth Justices [1982] 3 WLR 1 Criticised Lord Denning’s view that only if all factual questions are settled, national court can refer a question of law to the ECJ. Especially in criminal cases a defendant is entitled to have a decision whether there was a case to be decided, before he is called to lead evidence.

10.9 When will the ECJ Accept Referrals?a) Correction of improperly framed references- Firma and ENEL: ECJ has the power to extract from a question improperly

formulates by the national court those questions which alone pertain to the interpretation of the Treaty.

In the beginning, ECJ had the approach that wherever possible, they will read the reference so as to preserve its ability to pass judgement.

Firma C. Schwarze, case 16/65 Schwarze obtained import licenses. Levy was fixed pursuant to a Council regulation, based on a Commission decision. Schwarze thought the levy to high, and challenged the legality of the decision.Held: France complained that the question referred to the ECJ does not deal only with the interpretation of the treaty, but with the validity of the community acts. Strict adherence to form by the ECJ would not be appropriate in the special area of judicial co-operation as provided for in 234. ECJ will decide the question.

b) Challenging the reasons for making a reference or the facts on which it is basedENEL and Simmenthal: ECJ’s function as per Art. 234 is based on clear separation of functions between national courts and the ECJ. ECJ not empowered to investigate the facts of the case or to criticise the grounds and purpose of the request for interpretation.

Costa case 6/64 The ECJ has the power to extract from a question imperfectly formulated by the national court those questions which alone pertain to the interpretation of the Treaty.

Simmenthal, case 35/76 Art 234 is based on a distinct separation of functions between national courts and the ECJ, and it does not give the ECJ jurisdiction to take cognisance of the facts of the case, or to criticise the reasons for the reference.

10.10 The reference to the ECJ: the foundations of the Court’s Authority over the cases referred to itNotwithstanding above, ECJ has inquired into the reasons for the reference & has refused to adjudicate on issue.

CASEFoglia I & II- Questioning genuine nature of claim: “The interpretation of EU Law that is

necessary to enable them to settle genuine disputes..”- Is it up to ECJ to question nature and validity of claim? Changing nature of

judicial hierarchyi) Art. 234 as a source of cooperation between NC and ECJ: proper

and uniform application of law;


EU LAW I – Prof. De Mestral Fall 2004ii) Essential for NC to explain why it is necessary to have question

answered; butiii) ECJ has ultimate decider of the scope of its own jurisdiction & may

assert some control over the suitability of the reference.

Pasquale Foglia case 104/79 Foglia made a contract to sell wine to Novello. Danzas was the carrier of the goods. Both Danzas and Novello had clauses in their contracts that they would not be liable to pay any taxes levied by French or Italian authorities. Danzas paid a French tax then, and sent the bill to Novello who paid it. Novello challenged the tax.Held: It seems that the parties want to obtain a ruling the French tax is invalid by the expedient of proceedings before Italian courts between parties who are in agreement as to the result to be attained. ECJ has a duty to supply national courts with interpretations of the treaties, to enable them to settle genuine disputes.

Pasquale Foglia case 244/80 It is essential for national courts to explain why they consider a reply to their question necessary (unless the reasons are beyond doubt from the file). ECJ has no duty to give advisory opinions on general or hypothetical questions, but of assisting the administration of justice. It ‘does not have jurisdiction to reply to questions of interpretation which are submitted to it within the framework of procedural devices arranged by the parties in order to induce the Court to give its view on certain problems of Community law which do not correspond to an objective requirement inherent in the resolution of a dispute.’ No jurisdiction.

ECJ is ultimate arbiter of the scope of its own jurisdiction. ECJ would not be a passive receptor who decided anything that is put before it.

10.11 The reference to the ECJ: developing control over the Article 234 procedurea) Cases over which the ECJ will decline jurisdiction- Hypothetical nature of the question- Question raised are not relevant to the resolution of the substantive action in

the national court (Dias)- Question is not articulates clearly enough for the ECJ to be able to give any

meaningful legal response – ECJ wont alter the substance of the question, but may tease out relevance (recall that can’t change nature of claim once made as it would be unfair for parties…similar line of thought)

- Facts are insufficiently clear for the ECJ to be able to apply the relevant legal rules.

Lourenco Dias, case C-343/90 Court cannot give a preliminary ruling where interpretation relates to a matter not yet adopted by the Community

institutions procedure before the national court has already been terminated interpretation bears no relation to the actual nature of the case or the

subject matter in the actionNational court should establish the facts of the case when making the reference. Essential for national court to explain the reasons why it considers a reply to the question necessary.

Telemarsicabruzzo, case C-320-322/90 Italian court when making a reference provided almost no factual background.


EU LAW I – Prof. De Mestral Fall 2004Held: It’s necessary for national court to provide factual and legislative background. In the absence of adequate knowledge of the facts, the ECJ cannot interpret EC competition rules in light of the situation in issue. No need to give a decision.

b) Limits of the ECJ’s power to decline a caseWill decline only if the issue of EU law on which the interpretation is sought is manifestly inapplicable to the dispute before the NC or bears no relation to the subject-matter of the action. (ICI)



11. REVIEW OF LEGALITY

11.1 Introduction- Art. 230: Action for annulment

i) The Court of Justice shall review the legality of acts adopted jointly by the European Parliament and the Council, of acts of the Council, of the Commission and of the ECB, other than recommendations and opinions, and of acts of the European Parliament intended to produce legal effects vis-à-vis third parties. Any natural or legal person may, under the same conditions, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former. Limit of action to 2 months.

Four conditions for an act to be challenged:1. act must be of a kind which is open to challenge2. institution or person who makes the challenge must have standing3. there must be procedural or substantive illegality4. challenge must be brought within the time limit

Issues: interrelationship between direct (230) and indirect (234) challenge link between participation in the making of the original decision/regulation and

standing to challenge the resultant act grounds of review, but ALSO the intensity of review is important intensity of review will determine the extent to which the ECJ is willing to review

acts, especially those of a discretionary nature

11.2 Range of reviewable acts under 230- Review all, but recommendations and opinions all under Art. 249. Or other

sui generis acts deemed ok by ECJ.- Challenge must be brought within time limit in 230(5). Only acts which are

tainted by particularly serious illegality are exempted from time limit. They are deemed to be ‘non-existent,’ and do not have any legal effects.

CASE1. Comm v. Council ERTA (Comm dislike way Council resolution adopted sought under 230)- Any act producing legal effect may be challenged.

2. IBM (seeking annulment at the inception of a legislative proposal)- Actions that are purely preparatory in character cannot be annulled. - Whereby procedure to enact brings about discrimination, etc. then may annul.- Any measure the legal effects of which are binding on, and capable of affecting

the legal interests of the applicant, is an act which may be subject to challenge under 230. In the case of acts adopted by a procedure involving several stages, the act is open to review only upon the conclusion of that procedure, when there is a final decision producing legal effects. Provisional measure is not open to challenge.


EU LAW I – Prof. De Mestral Fall 200411.3 Principle of Standing under Art. 230- Art. 230(2): actions may be brought by MS, Parl., Coucil, Commi even when

the decision is addressed to another body or person.- Parliament: Prior to TEU it didn’t have standing. Comitology case, ECJ rejected

Parl’s unlimited standing. In Chernobyl case, Parl got quasi-privileged states. Now, Parl has standing to defend its own prerogatives.Same for ECB and CA.

11.4 Art. 230(4): General standing rules for non-privileged applicants- Review process only be brought in three types of cases:

i) The addressee of a decision can challenge it before ECJ or CFI;ii) Decision addressed to another party and the applicant claims direct

and individual concern to him;iii) Decision in the form of a regulation and the applicant claims that it

is of direct concern to him- Directive can come under Art. 230, but rarely happens.

a) Decisions addressed to another personCASE1. Plaumann- Persons other than those to whom a decision is addressed may only claim to be

individually concerned if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed.

Plaumann has no standing since he is not in a peculiar situation.Critique p. 489-490

- Could anyone ever succeed under these terms?i) Economically unrealistic to judge by the number of firms in the

industry and the situation not being ‘peculiar’ enough to the claimant

ii) There could always be at any point in time someone else involved in economic activity in question nobody can ever succeed in demonstrating necessary individuality.

Test: The applicant must have distinguishing characteristics which singles them out just as the addressee of the decision. (This is a very strict test! Virtually impossible to pass because there is always the argument that others might engage in the trade.)

2. Piraiki- These only Greek exporters of yarn were not ‘specific’ in concerns to warrant

standing under Art. 230.

3. Toepfer (whole trading of cereals)- Applicant successful where the decision concerns a completed set of past

events identify when individually affected get standing.

b) Challenges to regulations: Traditional Approach- Individuals who want to show that a regulation affects them directly and

individually. Usually not successful.- Two tests: Closed category test & Abstract terminology test.


EU LAW I – Prof. De Mestral Fall 2004Approach is to look behind the form of a regulation, in order to determine whether it is in reality a decision. It is a true regulation if it applies “to objectively determined situations and produces legal effects with regard to categories of persons described in a generalised an abstract manner.” But decisions can always be framed in such a way. Closed-category approach: where regulation applies to past events, the number and identity of persons affected is determined, and they can challenge the regulation (International Fruit case 41-44/70.)

CASE1. Calpak (Abstract terminology test) (Production of Pears)- Tried to argue that the regulation was direct aimed at them and the Comm had

identified them: here trying to show that regulation was in fact a decision. - Look at substance of measure and not form.- “The nature of the measure is not called into question because it is possible

to determine the number or the identity of those affected.”- Regulation is a true regulation if “objectively determined situations and

produces legal effects with regard to categories of persons described in a generalised and abstract manner.”

2. International Fruit (Closed category test, where completed set of past events, regulation relates to a closed and fixed category of traders.)- Completed set of past events- Regulation as a conglomerate of decisions when

i) Number of applications affected by it was fixed. ii) No new applications could be added so the "regulation" was really

deciding the fate of each of these persons after the fact. iii) These decisions directly affected the plaintiffs by directly affecting

their legal position.

c) Challenges to regulations and decisions: Modern jurisprudence: Codorniu Case- Regulation identified as such, but still it is of individual concern to certain

applicants.

CASE1. Codorniu (Trademark of cremant – sparkling wine France/Spain - Applicant challenged a regulation which said that a term should be reserved for a particular product with special characteristics. Applicant had a trademark on the word, and his right was thereby infringed.)- Liberal move from ECJ by recognising that this is a regulation, but that the

particularity & the individual concern make it enough to warrant to have standing.

- By reserving the right to use the term to producers from a certain region, the contested provision prevents Codorniu from using his trademark. Codorniu is thereby differentiated from all other traders

d) Post-Codorniu- 3 approaches to standing after the Codorniu Case:

i) Infringement of right or breach of duty: applicant is individually concerned because he possesses a right which is overridden by the regulation. Codorniu & Antillean Rice

ii) Degree of factual inquiry: existence of individual concern will be determined by a factual inquiry into the significance of the contested regulation for the applicant. In Extramet, the applicant was the largest importer of a product affected by anti-dumping


EU LAW I – Prof. De Mestral Fall 2004duty. His business activities depended largely on the imports, and he could not really get the product from other sources. Extramet

iii) Pure Plaumann (denied standing through Plaumann test) Mostly use this approach Campo Ebro Greenpeace (Development through aid of 2 power station

through a decision – NGO sought annulment) ECJ: harm suffered by the litigants, even if directly affected

groups i.e., farmers, fishermen, etc. is not enough to grant standing – b/c harm is of general nature and we don’t know who the other harmed/beneficiaries might be;

those bringing claim do not have attributes substantially distinct from those of other people who live or pursue activities on the territory concerned;

association formed cannot be considered to be direct or indirectly concerned by a measure affecting general interest

e) Test of Substantial Adverse Effect- Case Union de Pequenos Agricultores: Opinion of Advocate General:

i) Rules of standing should be changed to reflect a single criteria: “An applicant is individually concerned by a Community

measure where the measure has, or is liable to have, a substantial adverse effect on his interests.”

ii) See discussion p. 500. Advocate General Jacobs produced an opinion giving applicants standing if they are adversely affected. It remains to be seen whether ECJ accepts this.

11.4 Standing for non-privileged applicants in particular areas- ECJ more liberal in granting standing in particular areas

a) Anti-dumpingThree types of applicants can challenge anti-dumping measures:1. firm which initiated the complaint about dumping

2. Producers and exporters- Timex grated standing as the decision for duties was based on Timex’ market

analysis- Allied Corporation

3. Importer of the good against, whom the duty has been imposed- Extramet: sought to have annulled a duty on the vitamins it imported as the

sole producer of these within the EU didn’t want to sell it to him. Here, it is seriously affected by the contested regulation in view that only a limited number of manufacturers can supply the goods.

b) Competition

Member state or any natural/legal person who claims to have a legitimate interest, can challenge.

Metro, case 26/76 Facts: Metro argued that SABA distribution system was in breach of competition law. Commission decided that there was no breach and addressed its decision to SABA. Metro sought annulment.


EU LAW I – Prof. De Mestral Fall 2004Held: The decision was adopted as a result of Metro’s complaint. SABA continues to rely on distribution system in dealings with Metro. Metro can, therefore, bring a challenge.

If the Plaumann test had been applied here, Metro would not have gained standing.

c) State aids- Prevent the conditions of competition from being distorted, which would be the

case if a State could obtain aid or subsidies from their government.- Commission determines whether the aid is compatible with the Treaty – State

could challenge the decision under Art. 230.- COFAZ: [In the Netherlands, a gov't owned company granted special rebates for

Dutch Ammonia produces. The cheap ammonia allowed the dutch nitrate industry to produce their fertilizers much cheaper than their competitors. The French Assoc. of Nitrate Fertilizer Producers complained to the Commission, which issued a formal decision – France still unhappy sought to annul the Commission's decision.] A regulation addressed to a 3rd party but which affects the 1st party (The competitor) allows standing. Here, direct concern b\c the Commission's decision left intact all of the effects of the tariff system in place, when the applicants had sought to abolish the system altogether. The applicants successfully demonstrated that the Commission's decision may have adversely affected their legitimate interests by jeopardizing their position in the market.

d) Democratic nature of Community- Lenient approach to standing concerning institutional structures of the EU

CASE1. Les Verts (Parl. Made allocation of funds, but biasedly to political parties – party sought annulment)- Use of public funds & time frame of the happenings is determinable and know

who was touched by the decision – also decision of the ECJ would contribute to the protection afforded to the groupings participating in the democratic process of elections.

11.5 Art. 230: Direct concern- If applicant proves individual concern, still must show that the decisions was

of direct concern. standing- Direct concern: where it directly affects the legal situation of the

applicant and leaves no discretion to the addressees of the measure, who are entrusted with its implementation.

- Implementation must be automatic and result from Community rules without the application of the other intermediary rules.

CASE1. International Fruit- The role that the Commission assigned itself in the case i.e., issuing license and

perform market analysis made its regulation for collection of data about imported apples directly concerned on the importers…these were legally directly affected.

Contrast with….

2. Differdange- Aid to steel firms on the condition that their reduce production capacity. The

decision didn’t mention which one or how many firms ought to be closed – left degree of autonomy to the MS discretion in the manner of


EU LAW I – Prof. De Mestral Fall 2004implementation. no direct or individual concern to the municipalities, which came under the decision. No standing.

11.6 Action of Damages- Art. 288: Compensation for damages- Test for liability, where losses are caused by Community acts that are illegal.- Test articulated in Schoeppenstedt case: must prove

i) Breach of superior rule of law Treaty provision Regulation in breach of a hierarchically superior regulation Community legislation infringes on proportionality, legal

certainty, legitimate expectationsii) Breach is flagrant

11.5 APPLICATION OF EC LAW – REMEDIES IN NATIONAL COURTS

11.5.1 IntroductionNational courts must give adequate effect to EC law. However, EC law does not contain procedural law governing remedies for the enforcement of EC law: national autonomy rules when it comes to procedure and remedies. National procedure and remedies can be used to enforce EC law as long as they (i) do not render the exercise of EC rights impossible, and (ii) the procedure is applied in the same way to national and EC law.

In the Francovich case, the ECJ required the national court to provide specific kind of remedy: state liability for breach of EC law. The court held that national procedural and remedial effectiveness remain important, but are qualified by the ‘equivalence and effectiveness’ principle. National courts are called upon to undertake a proportionality analysis for each case, and to refuse to apply restrictive provisions of national law whenever necessary to give effect to EC law.

11.5.2 The basic principle of national procedural autonomya) Absence of relevant Community Rules- MS role to determine how the interests of persons adversely affected are to be

protected

Rewe-Zentralfinanz (1976) Facts: Germany had levied import charges contrary to EC law. The national time limit for contesting the validity of the national administrative measure had expired. (art. 10) (Time period during which person may contest law had passed: Can national court still grant the remedy required by EU Law?)- Art. 10 ‘must do all that is appropriate’- In absence of Community rules: MS must determine how to provide the

protection needed.- When reasonable period of time/limitation provided for person to take

action: MS has done all it could to afford protection.

MS must ensure however 2 principles:i) Equivalence : remedies and forms of action available to ensure the

observance of national law must be made in same way to ensure observance of EU Law;


EU LAW I – Prof. De Mestral Fall 2004ii) Practical possibility: national conditions and procedures should not

make the exercise of the right impossible in practice.

b) No creation of new remediesIf remedy not available under national law & EU didn’t ask for any specific, then no oblig to enact new remedies.

Rewe Handelsgesellschaft (1981) (Art. 234) (Purchase of tax free butter under German law were contrary to EU law & sought remedy for econo interests)There was no intention to have national courts create new remedies for the observance of EC law, provided that existing remedies are sufficient to enforce rights under EC law.

San Gorgio When it comes to the repayment of charges levied in breach of EC law, ECJ insists that a right to repayment be made available in national law.

11.5.3 Requirements imposed by EC lawa) Cases involve ‘recovery of charges’:- individual seeking to recover from the MS the cost of charges that it has

imposed on breach of EU Law; or- MS’s atemps to recoer money that it has wrongfully paid in breach in EU Law.

Characteristic of MS remedies must lie:Proportionality – Adequacy – Effectiveness of national response to EU law breaches.

Saguolo (1977) (Art. 12 National treatment) Facts: French and Italian nationals resident in Germany had failed to comply with German administrative formalities to get residence permits. They were penalised under German law. Issue: the admissibility of the penalty.Held: Penalties should not be so severe as to pose an obstacle to the freedom of movement and residence of persons – no disproportionality to the nature of the offence committed.

Von Colson (1984) Facts: Two women applied for posts as social workers in a German prison. They did not get the jobs and sued on grounds of sexual discrimination. Under German law, remedy is only the reimbursement of reliance costs, in this case travel expenses. EC directive required that discrimination be remedied by getting the job.Held: The sanction must guarantee real and effective judicial protection. Compensation must be adequate to the dame sustained, and amount to more than purely nominal compensation.

b) Effectiveness and no new remedies: difficulties- MS rules could be applied so long as they did not conflict with equivalence and

practical possibility.- Certain rules were deemed substantive to EU law and therefore MS had to

enact new remedies undermine the ‘no new rules’ situation.

Cases dilution of principle of national procedural autonomy.


EU LAW I – Prof. De Mestral Fall 2004R. v. Secretary of State for Transport (1990) Facts: Spanish fishing companies were incorporated under UK law, operating vessels registered as British. New law required all vessels to register anew, and that 75% of directors and shareholders of companies be UK nationals. In the UK, according to the principles of parliamentary supremacy, court cannot render law of no force and effect, or issue an injunction against the CrownHeld: If a national court, in a case before it concerning EC law, has as the sole obstacle which precludes it from granting interim relief a rule of national law, the court must disregard the national rule. Any national law, administrative, legislative, judicial practise which might impair the effectiveness of EC law is to be set aside.(art. 10)- Drawing on Simmenthal. Effectiveness of UK rules not present here and EU

law’s priority over rules and principles of UK law as such.- New remedy must be made by UK court as CoL does not grant interim relief,

but this essential for ‘guarantee’ of protection under EU Law of citizens in particular circumstances.

Dekker (1990) Facts: Defendant refused to employ Dekker on grounds of her pregnancy. ECJ rules that this constituted unlawful sex discrimination.Directive vests in individuals rights which they can plead in legal proceedings. Sanction must guarantee real and effective judicial protection, and must have real deterrent effect. While the remedy was to be determined in accordance which national civil liability law, national provisions could not be applied where they allowed for exemptions. Infringement of the prohibition against discrimination must suffice to hold defendant liable.

Emmott v. Minister for Social Welfare (1991) Facts: Social insurance not granted: remedy, but told that limit time ended to ask for remedies.ECJ set out the principle of national procedural autonomy, qualified by the conditions of equivalence and practical possibility. Until such time as a directive has been transposed into national law, a defaulting member state cannot rely on prescription periods to bar the individual claiming the right conferred on him by the directive, from initiating proceedings. Prescription period cannot start running before directive is implemented by member state

Marshall (No.2) (1993) UK legislation provided for statutory upper limit on award for compensation for unlawful dismissal on grounds of sex. Issue was whether national legislation imposing limit on compensation was OK.Held: a national remedy must be sufficiently effective to achieve the objective of the directive, but member states are free to choose between different solutions suitable for achieving the objective. The measures must guarantee real and effective judicial protection, and must have a real deterrent effect. Possible remedies are reinstating victim of discrimination, or financial compensation. Limiting a priori the amount of compensation cannot constitute proper implementation of the directive.

Steenhorst-Neerings Facts: Directive conferred right on married women to claim benefits for incapacity for work under the same conditions as men. Member state had failed to implement the directive properly. There is a national rule restricting the retroactive effect of a claim for benefits. Claimant was denied right to claim retroactively.Held: Rights must exercised under national law, provided that conditions are no less favourable than those relating to similar domestic actions. The National rule is OK for


EU LAW I – Prof. De Mestral Fall 2004enforcing directive, because it serves to ensure sound administration. It serves to ascertain that claimant satisfies conditions for eligibility (degree of incapacity may vary over time).

[Keep in mind Emmott: ECJ ruled that states cannot rely on national prescription periods as a defence, if they failed to implement the directive properly!]

R.. v. Secretary of State for Social Security Applicant successfully challenged the refusal to grant her invalidity pension. Applicant was refused the payment of interest on the basis that national law did not provide for the payment of interest on social security benefits.Held: ECJ distinguished this case from Marshall, where they held that full compensation for loss and damage sustained must be granted. The case at bar deals with social security benefits and not compensation. As a result, interest cannot be required.

Metallgesellschaft & Hoechst Metallgesellschaft had paid duties which were in violation of EC law. They now claim the interest on such payments.Held: An award of interest represents the reimbursement of that which was improperly paid and would appear to be essential in restoring the equal treatment guaranteed by Article 52 EC. Interest constitutes a damage directly flowing from the breach of Article 52 (now 43).

Note: in all these cases ECJ focused not on the procedural autonomy of national legal systems, but on the nature and importance of the substantive Community right in issue!

Van Schijndel ECJ was asked whether national court must apply EC law even where party had not relied on them.Held: Domestic law principle that a court in civil proceedings must or may raise an issue of its own motion is limited by obligation to keep to the subject matter of the dispute and to base its decision on the facts put before it. Court may act of its own motion only exceptionally and where the public interest so requires. EC law does not require national courts to raise of their own motion issues concerning the breach of EC law, where such examination would oblige them to abandon the passive role assigned to judges by national law. Each national provision (e.g. principle of judicial passivity) must be examined not in the abstract, but in the particular context of each case: purpose of national rule must be weighed against the degree of restriction on enforcement of EC law.

Kraaijeveld EC law does not confer a general power on national courts to consider points of EC law of their own motion. But if judges under national law have an obligation or discretion to raise points of national law of their own motion, they must treat EC law in the same way.

Proportionality test for weighing the impact of a national rule on a particular Community right against the legitimate aim served by that rule!

Dionysios Diamantis If relying on EC right constitutes an abuse of those rights, a national court can refuse reliance on EC law.

c. Development of the principle of equivalenceConcern mostly with national time limits



Edis Repayment of charges which were in violation of community law. National law imposed a time limit of 3 years for bringing proceedings for repayment. This was less favourable than the normal time limits governing actions between individuals for repayment of sums paid but not due.Held: The principle of equivalence implies that the procedural rule applies without distinction to actions alleging infringements of Community law and to actions alleging infringements of national law, with respect to the same kind of charges.

Levez In determining whether the principle of equivalence has been complied with, the purpose and essential characteristics or allegedly similar domestic actions must be considered. A national court must take into account the role played by the provision in the procedure as a whole

11.5.4 The Principle of (state) liability for breach of EC lawOne of the most dramatic and interventionist ECJ rulings was Francovich case, which established state liability in damages for breach of EC law.

Francovich v. Italy (1991) Facts: Francovich brought action against Italy for failure to implement a directive on the protection of employees in the event of employer’s bankruptcy. Directive required establishment of fund for payment of salaries. Francovich argued the state was liable to pay the sums owed.Held: The directive conferred rights on individuals. Full effectiveness of Community rules would be impaired if individuals were unable to obtain compensation when their rights are infringed by a breach of EC law by a member state. Compensation is particularly indispensable where the full effectiveness of the EC rule is subject to prior action by the member state. “The principle of State liability for harm caused to individuals by breaches of Community law for which the State can be held responsible is inherent in the system of the Treaty.” A state must make reparation in accordance with the rules of national law on liability.

Conditions for state liability as per Francovich: i) Conditions under which liability gives rise to compensation depend

on nature of breach;ii) Where MS fails under Art. 249 to fulfill all measures necessary to

achieve results prescribed by directive, the full effectiveness of the rule requires that there should be compensation when 3 criteria are met;

iii) These are: result of directive entails the grant of rights to individuals; identify the content of those rights on bases of provisions of the directive; existence of causal link btw the breach of oblig and harm suffered.

Brasserie du Pecheur v. Germany (1996) Facts: Germany was found in breach of EC law for discriminating against foreign beers which did not comply with the German Reinheitsgebot. Brewery which suffered losses sued German state.Held: Germany must compensate. The Treaty contains no provision governing the consequences of breach of Community law by member states. It is for the ECJ to ensure that in the interpretation and application of the treaty, the law is observed. Non-contractual liability is a general principle of Community law (see Article 288 EC): an unlawful act or omission gives rise to an obligation to make good the damage


EU LAW I – Prof. De Mestral Fall 2004caused. Obligation of public authorities to make good damage caused in the performance of their duties.

Article 288 EC (ex 215) as a basis in developing the conditions for state liability:

Brasserie du PecheurArticle 215(2) refers, in respect of extra-contractual liability of the Community, to the general principles common to the laws of all member states. When it comes to legislative measures involving choice of economic policy, with a wide discretion available to the institutions, there is no liability unless: the institution concerned has manifestly and gravely disregarded the limits on the exercise of power.Factors to be taken into account:

discretion of institution (If there is an obligation to achieve a particular result, or a clear obligation to act or refrain from acting, discretion is reduced, and liability more likely),

clarity/precision or ambiguity of the law which is said to have been breached, infringement of the right was intentional or involuntary, infringement of the right was excusable or inexcusable

Standard of liability: “sufficiently serious breach of EC law.” If breach of community law has persisted despite a judgement finding the infringement to be established, breach of EC law will clearly be sufficiently serious.

This case clarifies state liability through:- Clarifying the basis for state liability Art. 10, 228, 226- Clarifying the conditions for state liability Art 288: governed by same

conditions that Community is for liability for protection of rights of individuals. P.264

i) Even if legality of legislation is at question, during review, Community/MS must do all in power not to adversely affect the rights of individuals;

Legislative context seen, exercise of wide discretion for implementation of Community policy, Community only incurs liability if institutions have gravely disregarded the limits of their powers



PART II: EU ECONOMIC INTEGRATION

Forms of Economic Integration-Free trade area: arrangement between States involving removal of all custom duties and quotas on trade passing between them-Customs union: in addition to removal of duties and quotas between parties, common level of duties and quotas on goods from outside-Common market: to the free movement of goods is added the free movement of the factors of production: labour, capital and enterprise-Economic union: complete unification of monetary and fiscal policy

Four fundamental freedoms of EC LawPart three of the EC Treaty sets out the principles necessary to the establishment of a customs union and common market:

1-Free movement of goods: removal of duties on the movement of goods within the community (art. 23-25); the establishment of a common customs tariff (art. 26-27); removal of quotas and other quantitative restrictions (art. 28-31); the prohibition of discriminatory taxation (art. 90-93). 2-Free movement of workers: abolition of discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment (art. 39)3-Free movement of services: removal of restrictions on the right of individuals and companies to maintain a permanent or settled place of business in a Member State (art. 43-48); removal of restrictions on the cross-border provision of services between Member States (art. 49-55)4-Free movement of capital: removal of restrictions on the movement of capital as well as on payments between Member States and between Member States and third countries (art. 56)

While there are social objectives to these last three freedoms, they are essentially economic in scope. They seek to ensure optimal allocation of resources within the EC, by enabling factors of production to move to the area where they are most valued. This serves to maximize wealth-creation in the EC as a whole.


EU LAW I – Prof. De Mestral Fall 200412. FREE MOVEMENT OF GOODS: DUTIES, CHARGES AND TAXES

12.1 Introduction-Objective: Ensure that goods can move freely, with the consequence that those which are most favoured by consumers will be most successful, irrespective of the country of origin.-Concerned with State action that creates barriers to trade.-These are more than just rules, they create a program backed up with remedies.

12.2 Abolition of customs duties and charges with equivalent effect (art. 23-25)The abolition of custom duties is central to the idea of a customs union and a single market. The ECJ has therefore interpreted art. 23-25 strictly: it has looked to the effect of a duty, not its purpose, has given a broad reading to “charges having an equivalent effect” to a customs duty, it has allowed limited exceptions to these articles and breaches are deemed unlawful per se.

Article 23(1): “The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relation with third countries.”

Duties and Charges: Effect, not purpose

Commission v. Italy, Italian Art Case, 1968, p. 584 -Italy taxes exports of artistic, historical, archaeological items-“goods are products which can be valued in money and which are capable of forming the subject of commercial transaction”-“the tax in dispute constitutes a tax having an effect equivalent to a customs duty on exports and therefore the tax should have been abolished under art. 16 of the Treaty (now art.25)”-the prohibition is on “any charge which, by altering the price of an article exported, has the same restrictive effect on the free circulation of that article as a customs duty. That provision makes no distinction based on the purpose of the duties and charges the abolition of which it requires”.

Charges having an equivalent effect-Designed to catch protectionist measures that create a similar barrier to trade as customs duties.-Provisions are applicable whether the duty/charge discriminated or not-Strident approach of the Court is logic given the centrality of abolishing customs duties to the very notion of community market. Goes back to the heart of the community idea.



-Possible defence: charge imposed on goods in exchange for a commercial service provided by the State to the importer.

Bresciani, 1976, p. 588 -inspection on raw cowhides at the frontier-imposed and charged on products coming in Italy -“any pecuniary charge, whatever its designation and mode of application, which is unilaterally imposed on goods imported from another Member state by reason of the fact that they cross a frontier, constitutes a charge having an effect equivalent to a customs duty. It is of no importance that it is proportionate to the quantity of the imported goods and not their value”-“the fact that the domestic production is, through other charges, subjected to a similar burden matters little unless those charges and the duty in question are applied according to the same criteria and at the same stage of production, thus making it possible for them to be regarded as falling within a general system of international taxation applying systematically and in the same way to domestic and imported products”.

-The State argued that the importer should bear the costs of the health inspection whereas the ECJ’s responded that this should be borne by the general public. -For this argument to work, you need a strict equivalence between the charges levied on domestic and imported goods.

Commission v. Germany, 1988, p. 590 -Germany charged fees for inspection of live animals coming in-inspection was following a European Directive-“such a charge escapes that classification if it relates to a general system of internal dues applied systematically and in accordance with the same criteria to domestic products alike if it constitutes payment for a service in fact rendered to the economic operator of a sum in proportion to the services or again, subject to certain conditions, of it attaches to inspections attached to inspections carried out to fulfill obligations imposed by Community law”“since the fee was charged in connection with inspections carried out in pursuant to a community provision, it should be notes that according to the case law of the court… such fees may not be classified as charges having an effect equivalent to a customs duty if the following conditions are satisfied : a) they do not exceed the actual costs of the inspections in connection with which they are charged; b)the inspections in question are obligatory and uniform for all the products concerned in the Community; c)they are prescribed by Community law in the general interest of the Community; d)they promote the free mvt of goods by neutralizing obstacles which could arise from unilateral measures of inspections”-in this instance, all conditions are respected.

-A charge may escape art. 23-25 when it is levied to cover the cost of a mandatory inspection required by community law.


Commission v. Italy, Statistical Measures Case, 1969, p.586 -Italy imposed tax on goods for statistical purpose-“any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of art. 23 and 25, even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product”

EU LAW I – Prof. De Mestral Fall 2004Customs unionArt. 24 provides that all products that come from external countries are in free circulation throughout all the member states. So once a product enters any member state it can circulate freely to the others. The imposition of a tariff on these goods is important to maintain the advantages of customs union membership and to provide the EC with resources. Organizational initiatives to ensure that the customs agencies prevent fraud and the importation of illegal goods.

12.3 Discriminatory tax provisions (art. 90-93)-These provisions seek to ensure that a Member State cannot manipulate domestic tax sale to favour domestic goods and thus undermine the objectives of art. 23-25. -These cases can be difficult to adjudicate because tax rules may be used to foster national preferences in relation to matters such as the environment.-Concerned with the problem of distorting competition, which has an impact on consumer choice.-art.90: “No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar products. Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.”-art. 90 (1) prohibits the direct or indirect imposition of internal taxes on products from other Member States in excess of those levied on similar domestic products-art. 90 (2) prohibits national tax provisions that apply unequal tax ratings to goods which may not be strictly similar, but which may nonetheless be in competition with each other

Direct discrimination (art. 90(1))-Requires that whatever system of taxation is chosen, it should be applied without discrimination to similar imported products.-The establishment of 2 levels of taxation usually sets up the alarm

Indirect discrimination (art. 90(1))-Tax system will be compatible if it excludes the possibility that imported products being taxed more heavily than similar domestic goods.-Problematic when disproportionate effect is not explainable.

Humblot, 1985, p.595 -French law imposed an annual car tax based on the power rating of the car-below 16CV: tax rate increased gradually-above 16Cv: flat tax rate-No French rate rated above 16 CV: higher rate only for imported cars-every state stays free to have its own tax system-“such as a system of taxation is, however, compatible with art. 90 only in so far as it is free from any discriminatory or protective effect”-not the case here. “the resultant taxation is liable to cancel out the advantages which certain cars imported might have in the consumers’ eyes over comparable cars of domestic manufacture… The special tax reduces the amount of competition to which cars of domestic manufacture are subject and hence is contrary to the principle of neutrality with which domestic taxation must comply”

National autonomy and fiscal choices



Chemical, 1981, p. 596 -Italy taxed synthetic ethyl alcohol more heavily than ethyl alcohol obtained from fermentation, although both products could be used interchangeably -It not a major producer of synthetic ethyl alcohol-Objective: to favour the manufacture of ethyl alcohol from agricultural products in order to reserve raw material for more important economic uses-Held not to be a violation as it constitutes a legitimate choice of economic policy to which effect is given by fiscal means. -“such differentiation is compatible with community law if pursues economic policy objectives which are themselves compatible with the requirement of the Treaty and its secondary law and if the detailed rules are such as to avoid any form of discrimination, direct or indirect, in regard to imports from other member states or any form of protection of competing domestic products”

-Willingness of Court to accept objective justifications where the national policy is acceptable from the Community’s perspective, even if this benefits domestic traders more than importers.

Commission v. Greece, 1990, p.598-National fiscal policy that imposed a progressively higher tax based on the cylinder capacity of the car-It held that this would not constitute a breach of article 95 (now article 90) unless it was discriminatory, and this would not be the case unless it both discouraged customers from buying highly taxed imported cars and encouraged them to buy domestic cars instead. The mere fact that all cars in the highest bracket were imported was not sufficient to establish a violation of this article.

-EC law does not therefore prohibit the use of tax policy to attain social ends, provided that the tax was based on an objective criterion, was not discriminatory, and did not have a protective effect.

Relationship between article 90(1) and 90(2)-Court will not be overly concerned whether a case is characterized as relating to art.90(1) or (2) if the nature of the product renders such classification difficult. However, this obscures the appropriate response of the infringing State: a breach of 90(1) requires the State to equalize the taxes on domestic and imported goods; a breach of 90(2) requires the State to remove the protective effect, but not necessarily equalize the tax burdens.-Generally though, if the products are similar, then art. 90(1) applies. If they are not, then art. 90(2) may apply.



Commission v. France,1980, p.599 -France had higher tax rates for spirits which were based on grain (whisky, rum, gin) than those which were based on wine or fruit (cognac, calvados, armagnac). -France produced very little of the first category but a major producer of the second category-“it is necessary to interpret the concept of “similar product” with sufficient flexibility. It is necessary to consider as similar products those which “have similar characteristics and meet the same needs from the point of view of consumers”-“the function of 90(2) is to cover, in addition, all forms of indirect tax protection in the case of products which, without being similar within the meaning of the first paragraph, are nevertheless in competition, even partial, indirect or potential, with certain products of the importing country”-“even in cases in which it is impossible to recognize a sufficient degree of similarity between the products concerned, there are nevertheless in the case of all spirits, common characteristics which are sufficiently pronounced to accept that in all cases there is at least partial or potential competition. It follows that the application of the second para of art. 90 may come into consideration in cases in which the relationship of similarity between the specific varieties of spirits remains doubtful or contested”-“as the competitive and substitution relationships between the beverages are such, the protective nature of the tax system criticized by the Commission is clear. A characteristic of that system is in fact that an essential part of domestic production, spirits obtained from wine and fruit, come within the most favourable tax category whereas at least two types of product, almost all of which are imported from other Member States, are subject to higher taxation”

Determination of protective effect (art. 90(2))

Commission v UK, 1983, p.603 -The UK levied an excise tax on certain wines which was roughly 5 times that which was levied on beer-UK produced high amount of beer and low amount of wine-Commission brought an art.226 action claiming that excise tax was in breach of art.90-“the decisive competitive relationship between beer and wine must be established by reference to those wines which are the most accessible to the public at large, that is to say, generally speaking the lightest and cheapest varieties. That is the appropriate basis for making fiscal comparisons by reference to the alcoholic strength or to the price of the 2 beverages in question”“it becomes apparent that those wines which, in view of their price, are most directly in competition with domestic beer production are subject to a considerably higher tax burden”“the UK tax system has the effect of subjecting wine imported from other member states to an additional burden so as to afford protection to domestic beer production”

-Court’s methodology in 90(2) cases: 1-Establish that there is some competitive relationship between the two products in order to render art. 90(2) applicable. Product substitutability is central when determining the existence of the relationship. 2- If there is such a relationship, Court moves on to determine whether the tax system was in fact protective.

12.4 Taxation-EC law does not exercise any general control over direct taxation, which is regarded as central to sovereignty.


EU LAW I – Prof. De Mestral Fall 2004-EC law as a direct impact on indirect taxation through the prohibition on cross-border direct and indirect discrimination and the harmonization of the VAT, which provides the EC with revenue.

12.5 Boundary between articles 23-25 and 90-93-The two sets of articles are mutually exclusive. -Art.23-25: duties or charges levied as a result of goods crossing the border. If a charge is caught by art.25, it will be unlawful.-Art. 90-93: fiscal policies which are internal to the State, concerns discrimination against goods once they have entered a particular Member State. If a fiscal measure falls within art. 90, taxation level is not unlawful but inquiry if the tax discriminates against the importer (art. 90(1)) or has a protective effect (90(2)). -It is important to characterize which one is concerned because obligation of state is not the same.

Cooperative Co-Frutta, 1987, p. 608 Italy imposed a tax on bananas even though no tax was imposed on other fruits from Italy. Italy produces very little bananasQuestion : does a tax on a product that the state does not produce implies that there is a presumption of discrimination?-Held: This is not a border tax. It is part of an internal taxation-“the essential feature of a charge having an effect equivalent to a customs duty which establishes it from an internal tax resides in the fact that the former is borne solely by an imported product as such while the latter is borne both by imported and domestic products”“a charge which is borne by a product imported by another member state, when there is no other identical or similar domestic product, does no constitute a charge having equivalent effect but internal taxation within the meaning of art. 90 of the treaty if it relates to a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products”-in this case, “the tax at issue must be regarded as being an integral part of a general system of internal dues within the meaning of art. 90 and its compatibility with community law must be assessed on the basis of that article rather than art. 25 of the Treaty”

The Court feared that if any charge imposed by a state on a product that it did not make at all were to be qualified as under art.25 then the charge would be automatically unlawful and the importing state could not tax goods which it did not produce itself.


EU LAW I – Prof. De Mestral Fall 200413. FREE MOVEMENT OF GOODS: QUOTAS AND OTHER

QUANTITATIVE RESTRICTIONS

13.1 Introduction-Objective: Ensure that goods can move freely, with the consequence that those which are most favoured by consumers will be most successful, irrespective of the country of origin; this will serve to maximize wealth-creation in the EC as a whole-Concerns quotas and measures equivalent to quotas

Article 28 Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.Article 29 Quantitative restrictions on exports and all measures having equivalent effect shall be prohibited between Member States.Article 30 The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of - public morality, public policy or public security ; - the protection of health and life of humans, animals or plants ; - the protection of national treasures possessing artistic, historic or archaeological

value ; - or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

Articles 23-27: establishing common customs tariff, but it is still open to states to impose quotasArticles 28-31: prevent states from imposing quotas

ECJ’s interpretation of Articles 28-31 is broad: ‘measures having equivalent effect’ to quantitative restrictions was held to include many things. Article 30 can apply even without discrimination (Cassis de Dijon case: discrimination is a sufficient but not necessary condition)

Three central problems:

ECJ jurisprudence has led to the question where this branch of EC law stops Relationship between negative and positive harmonisation: negative (national

rules are unenforceable when they hinder cross-border trade unless they come within one of the exceptions) vs. positive (Community legislative measures to ensure free movement of goods)

Tension between integration and national regulatory autonomy (according to differences in societal preferences, divergent natural or cultural characteristics; desire to regulate for national constituencies alone – protectionist bias)

Directive 70/50 and DassonvilleArticle 28 can apply to Community measures as well as member state measures. Quantitative restriction definition (Gaddo case 2/73): “measures which amount to a total or partial restraint of, according to the circumstances, imports, exports or goods in transit.”

Directive 70/50 lists measures which can constitute a measure having equivalent effect to a quantitative restriction (MEQR):

minimum/maximum prices for imports


EU LAW I – Prof. De Mestral Fall 2004 less favourable prices for imports lowering imported goods’ value by reducing their intrinsic value or increasing

their costs payment conditions for imports which differ from those of domestic goods conditions in respect of packaging, composition, identification, size, weight

which are different from those of domestic goods giving preference to the purchase of domestic goods by e.g. limiting publicity mandatory requirement of having an agent in the state.

Dassonville, case 8/74 Facts: Belgian goods bearing a designation of origin could only be imported if they had an exporting country government certificate certifying the good’s right to such a designation. Dassonville imported Scotch whisky to France without the certificate.Held: In the absence of a Community system guaranteeing the authenticity of a product’s designation of origin, member states can take measures. BUT: the measures should be reasonable, and not be a hindrance to trade. Measures must not be a means of arbitrary discrimination or a disguised restriction to trade. Certificate of authenticity is less easily obtained by importers of an authentic product which had been put into free circulation in another member state than for an importer of the same product coming from the country of origin directly. Therefore, a MEQR.

The crucial element in proving an MEQR is its effect: discriminatory intent is not required; neither is actual discrimination

13.2 Discriminatory barriers to tradea. Promotion or Favouring of Domestic ProductsCommission v. Ireland case 249/81 Facts: Irish government sought to promote the sale of Irish goods. An information service was established which provided info on which products were made in Ireland, were they could be bought. There were also ‘Buy Irish’symbols put on Irish goods.Held: Irish government appoint members of Irish Goods Council, defines the aims and broad outline of the campaign. Campaign is reflection of Irish government’s intention to substitute domestic products for imported products, and thereby to check the flow of imports. This practise is prohibited by Article 28. Even measures adopted by a member state not having binding effect may be capable of influencing the conduct of traders and consumers and thus frustrating the aims of the Community.

Commission v. UK case 207/83 Facts: UK law required certain goods to be marked with their country of origin. Law applied equally to imported and domestic goods, and that info was important for consumers.Held: Purpose of origin marking is to enable the consumers to distinguish between domestic and imported products. Common market seeks to unite the national markets. Within the common market, origin marking requirement has the effect of slowing down economic inter-penetration. UK law has the effect of increasing the production costs of imports. Origin marking is admissible only: origin implies a certain quality of the goods, or origin is indicative of a special place in the tradition of the region in question, or good was made from certain material or by a certain manufacture.

Public procurement cannot be structured so as to favour domestic producers:

Du Pont case C-21/88: not OK to reserve a proportion of its public supplies to domestic products


EU LAW I – Prof. De Mestral Fall 2004Commission v. Ireland, case 45/87 Facts: Municipality issued tender for water supply contract. Tenderers had to submit bids based on the use of certain pipes conforming with Irish standard.Held: This tender has the effect of restricting the supply of pipes needed to Irish manufacturers alone. It is true that pipes need to suit the existing network. BUT: problem is the Irish authorities refusal to verify whether those requirements are satisfied by pipes other than Irish standard pipes.

Other types of discrimination: discrimination in favour of domestic goods is evident from administrative practise (rather than law): Commission v. France case 21/84: there was a formal change to the law made, but authorities in practise continued to refuse to approve the machines

b. Price-fixing

If there are price-fixing regulations, it is more difficult for importers to market their goods.

Van Tiggele, case 82/77 Facts: Dutch law imposed a minimum selling price for certain spirits.Held: It is sufficient that measures are likely to hinder, directly or indirectly, actually or potentially, imports between member states. National price-control rules applicable without distinction to domestic and imported products can have a discriminatory effect in specific cases. Where a state fixes prices at a level that put imported products at a disadvantage because they cannot profitably be marketed (e.g. competitive advantage conferred by lower cost prices is cancelled out), discrimination is present and in contravention of Article 28.

c. Measures which make imports more difficult or costly

Schloh case 50/85 Facts: Schloh bought a car in Germany, upon import to Belgium, he had to submit his car to roadworthiness tests and fees were charged.Held: Roadworthiness testing made the registration of imported cares more difficult and costly : MEQR. Article 30 (exceptions) may justify it: protection of human life and health, but only if the measure does not constitute a means of arbitrary discrimination. Test cannot be justified for imported cars carrying a certificate of conformity, and testing is not required for domestic cars.

d. National measures v. private action

While article 28 applies to measures taken by a state, articles 81 and 82 apply to actions by private parties which restrict competition.The issue of what is a state entity arises.

R.v. The Pharmaceutical Society case 266/87: Society was independent body responsible for regulation of standards among pharmacists. Functions were conferred by statute => Society is bound by Article 28.

Commission v. France case C-265/95: government had taken insufficient measures to prevent farmers from disrupting imports of agricultural products. ECJ held that it is the duty of governments to take all necessary and appropriate measures to ensure free movement of goods.

13.3 Justifying Discriminatory Barriers to Trade: Article 30


EU LAW I – Prof. De Mestral Fall 2004Challenged rule must come within one of the exceptions of Article 30 AND must pass a test of proportionality: least restrictive measure possible. Burden of proof is on member state seeking to rely on the exception.

a. public morality

Henn and Darby case 34/79: UK law prohibits import of indecent and obscene articles. ECJ found that ban is within Article 28, but was saved by public morality exception in Article 30. It is for each member state to determine the standards of public morality. The purpose of the ban is to restrain the manufacture and marketing of pornography.

Conegate case 121/85 Facts: Conegate imported rubber dolls. National court asked whether prohibition on imports could be justified even though a state did not ban the manufacture or marketing of the same goods within the national territory.Held: must be possible from the rules that their purpose is to prohibit the manufacture and marketing of those products. Where the state does not adopt penal measures with respect to the same goods manufactured or marketed within its territory, Article 30 does not apply.

Crucial distinction: whether imported goods subjected to an absolute ban were treated more harshly than similar domestic goods

b. public policy

Cullet case 231/83 France imposed a minimum retail price for fuel fixed on the basis of French refinery prices and costs.Advocate General: Acceptance of civil disturbance as justification for encroachments upon free movement of goods is inadmissible. If roadblocks and other weapons of interest groups which feel threatened by the import at competitive prices of certain cheap products were accepted as justification, the existence of the 4 freedoms could no longer be relied upon.ECJ: France has not shown that the change of regulations in conformity with EC law would have consequences for law and order.

The public policy exception applied restrictively

c. public security

Campus Oil case 72/83 Irish law required petrol importers to buy 35% of their requirements from a domestic state-owned oil-refinery at fixed prices. This rule was a MEQR. Ireland relied on public security exception: vital for Ireland to maintain its own oil refining capacity to ensure that petrol products are marketedHeld: Since oil is so important for a country’s existence, in principle, reliance on Article 30 is OK. Generally, Article 30 refers to matters of a non-economic nature, but oil products can be regarded as transcending purely economic considerations. “Article 36, as an exception to a fundamental principle of the Treaty must be interpreted in such a way that its scope is not extended any further than is necessary for the protection of the interests which it is intended to secure and the measures


EU LAW I – Prof. De Mestral Fall 2004taken pursuant to that Article must not create obstacles on imports which are disproportionate.” BUT: community rules provide the necessary protection for oil supplies: recourse to Article 30 not admissible.

d. protection of health and life of humans, animals or plants

Test:1. ECJ will determine whether the protection of public health is the real purpose of the measure.2. ECJ then may have to decide whether a public health claim is sustainable where there is no prefect consensus on the scientific impact of the particular substances.

Sandoz BV case 174/82 Facts: Holland refused to allow sales of muesli bars with added vitamins: vitamins are dangerous to public health, because excessive consumption is harmful. There was no scientific evidence at which point consumption is excessive.Held: In the absence of harmonisation, member state decides what degree of protection of the health and life of humans they want to assure. If there are scientific uncertainties, national rules prohibiting the marketing of food with added vitamins is justified by Article 30. BUT: principle of proportionality must be observed: member states are allowed to restrict only what is necessary to attain the aim of protecting public health. “Community law permits national rules prohibiting without prior authorisation the marketing of foodstuffs marketed in another member state to which vitamins have been added, provided that the marketing is authorised when the addition of the vitamins meets a real need.”

e. other grounds for validating discriminatory measures?

Traditional view: discriminatory measure can only be justified by the grounds listed in Article 30.More recent case law: doubt that list in Article 30 is exhaustive.e.g. PreussenElektra case C-379/98: Advocate General Jacobs argued that there are good reasons for allowing environmental protection to be pleaded as justification even in cases where there is direct discrimination.

The relationship between harmonisation and Article 30Community harmonisation measures may make recourse to Article 30 inadmissible. Where Community measure is intended to harmonise an area totally or exhaustively, member state action is pre-empted.

Where the objective of Community legislation is minimum harmonisation, the harmonisation measure does not cover the whole field, and member states can still legislate. With minimum harmonisation, member states can “maintain and often introduce more stringent regulatory standards than those prescribed by Community legislation, for the purpose of advancing a particular social or welfare interest.”

13.4 Indistinctly applicable rules: Cassis de Dijon

Directive 70/50: “also covers measures governing the marketing of products which deal with shape, size, weight, composition, presentation and identification, where the measures are equally applicable to domestic and imported products, and where the restrictive effect of such measures on the free movement of goods exceeds the effects intrinsic to such rules.”


EU LAW I – Prof. De Mestral Fall 2004Rewe-Zentrale AG case 120/78 (Cassis de Dijon) Facts: Wanted to import Cassis de Dijon into Germany. German Gt refused, because it had a rule that required a minimum alcoholic strength of 25%. The product had 10-20%.Issue: Is the requirement a MEQR?Held: Yes.Reasoning: In the absence of common rules regulating production and marketing of alcohol, it’s up to states to do so. The rule of reason: Obstacles to the movement of good resulting from differing national standards must be accepted insofar as they result from rules necessary for the protection of public health, fairness of commercial transactions, consumer protection, or the effectiveness of fiscal supervision. Here, the German Gt’s arguments about public health are unconvincing, and the requirements don’t serve the general interest. They don’t take precedence over the requirement of free movement of goods, therefore. Therefore, a violation of art 28.

Cassis de Dijon was built on the Court’s decision in Dassonville.

13.5 Indistinctly applicable rules and Article 29

There is a difference in scope between Article 28 (imports) and 29 (exports). Article 28: applies to discriminatory provisions as well as to indistinctly applicable rules.Article 29: applies only if there is discrimination.

Groenveld case 15/79 Dutch law prohibited meat product manufacturers from having in stock or processing horsemeat. It was not illegal to sell horsemeat in Holland. Objective of prohibition: to safeguard the export of meat products to countries which prohibit the marketing of horsemeat (it is impossible to detect horsemeat in meat products)Held: Dutch rule does not infringe Article 29. Article 29 is aimed at national measures which have as their specific objective or effect the restriction of exports, in a way that provides a particular advantage for national production at the expense of the trade of other member states. Not the case: prohibition for goods of a certain kind, not important whether they were intended for export or not.

13.6 Indistinctly applicable rules: the limits of Article 28

a. the nature of the problem: Cinéthèque and Torfaen Problem with Cassis de Dijon: all rules that concern trade, directly or indirectly, could be said to affect the free moevement of goods.

Distinction between dual-burden rules and equal-burden rules:

1. dual burden rules: one state imposes rules, which are applied to imports, even though the imports have already complied with trade rules in the state of origin. Cassis de Dijon prevents importing state from imposing its rules, unless they can be saved by mandatory requirements.

2. equal burden rules: rules that apply to all goods, irrespective of origin

ECJ’s approach: rules that do not relate to the characteristics of goods AND do not impose a dual burden on the importer, but concerned only the conditions under which the goods were sold, are OK.


EU LAW I – Prof. De Mestral Fall 2004Cinétèque (1985) Facts: French law required that videos not be sold or rented during the first year after a film was released. The object was the promotion of the cinema sector. Challenged under art 28.Issue: Was measure a MEQR?Held: No.Reasoning: The law was a prima facie violation of the section, but nonetheless it’s lawful if it has an objective justification acceptable to Community law, and provided the measure is proportionate. Here, the object was the protection of enhancement of legal works.

An addition to the list of mandatory requirements in Cassis.Torfaen BC v. B&Q case 145/88 B&Q were prosecuted for the violation of Sunday trading laws: prohibition to sell on Sundays.Held: National rules apply to imported and domestic goods alike. Rules concerning opening hours reflect certain political and economic choices to ensure that working hours are arranged in a way to accord with regional socio-cultural characteristics. Rules are OK.

b. The judgement in KeckState measures which are entirely neutral in their effect on goods, because they only regulate the circumstance in which all goods of the same kind are sold or used, should not be regarded as falling under Article 28.

Criminal Proceedings against Keck, case C-267-268/91 Facts: Keck is prosecuted in a French court for selling goods at the price below the actual purchase price, contrary to French law.Held: Law may restrict the volume of sales, and thus the volume of imported goods, but its purpose is not the regulation of trade between member states. “The application to products from other member states of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between member states within the meaning of the Dassonville judgement…provided that those provisions apply to all affected traders operating within the national territory and provided that they affect in the same manner, in law and fact, the marketing of domestic products and of those from other Member States.” French law is OK.

Cassis de Dijon type rules which relate to the goods themselves are within Article 28, while rules concerning selling arrangements simply imposing an equal burden on all goods are not covered by Article 28.

c. Keck: Static and dynamic selling arrangements

Static selling arrangements: rules relating to the hours at which shops may be open.

Dynamic selling arrangements: ways in which a manufacturer chooses to market a specific product: e.g. advertising

Laws that restrict certain forms of advertising may restrict trade within the EU, even if the rules are indistinctly applicable. Yet, these rules are outside Article 28. Non-static selling arrangements may form an integral aspect of the good.

d. Keck and selling arrangements: two judicial qualifications



Exclusion of selling arrangements from ambit of Article 28 was subjected to two qualifications:

1. it is open to the ECJ to characterise certain rules which affect selling as part of the nature of the product itself, and are hence within the ambit of Article 28

Familiapress case C-368/95 Austrian legislation prohibited publishers from including prize competitions in papers.Held: National law is directed against a method of sales promotion, but in this case it bears on the actual content of the product. the law requires traders in other states to alter the content of their magazine: impairing access of products to the Austrian market

2. even if a rule is categorised as being about selling, it will still be within Article 28 if the rule has a differential impact, in law or fact, for domestic traders and importers

Konsumentombudsmannen case C-34-36/95 Facts: There was a Swedish ban on television advertising directed at children under 12.Held: Law is about selling arrangements. Outright ban of a type of sales promotion might have a greater impact on products from other member states: advertisement is the only effective from of promotion enabling foreign traders to penetrate the Swedish market. National court should determine whether the ban is necessary to satisfy public policy goals (mandatory requirements or Article 36), and whether the ban is proportionate.

Gourmet International Products, case C-405/98 Facts: Swedish Ombudsman sought an injunction restraining GIP from placing alcohol advertisements in their magazine. Swedish law prohibits alcohol advertisements in periodicals, except for periodicals that are aimed at traders. Magazine in question had 90% commercial readers.Held: Prohibition of advertisement not only prohibits a form of marketing a product, but in reality prohibits producers from directing an advertising message at consumers. This impedes market access to foreign traders, and forms an obstacle to trade.

TK-Heimdienst, case C-254/98 Facts: Austrian rule applicable to bakers, butcher and grocers which permitted sales on rounds in a given district only if they had establishment in that district.Held: Concerns selling arrangements. Impedes market access, discrimination of foreign traders.

e. Keck, Article 28, and market access: meaning and application

1. issue: meaning accorded to market access in the ECJ’s case law on goods - selling arrangements are outside Article 28, only if they do not prevent market access to imported products OR impede market access in a discriminatory way for importers

2. issue: general meaning of market access - market access is a means to maximise sales/profits for the individual producer and to enhance the optimal allocation of resources in the community

3. issue: it is doubtful whether any rigid distinction can be drawn between dynamic and static selling arrangements so far as market access is concerned - limitations on


EU LAW I – Prof. De Mestral Fall 2004the mode of marketing are regarded as going to market access. Why not the same in terms of limitations on opening hours/where goods can be sold?

4. issue: we must be aware of the difficulties of applying a test based on direct and substantial impact of access to the market

f. Summary: three ways to approach Article 28

1. use prevention or direct and substantial hindrance of market access as the general criterion for applying Article 28

2. test based on substantial hindrance to market access subject to presumptions based on the type of case: when measure affects goods themselves (Cassis) Article 28 applies; when measure concerns selling arrangements and is not discriminatory, Article 28 does not apply.

3. Continue with Keck type test: selling arrangements are presumed to be outside Article 28, but can be brought within it.

The ECJ is moving away from Keck towards the second test.

13.7 Indistinctly applicable rules: the mandatory requirements

Many rules which regulate trade are also capable of restricting trade, yet some of these rules serve objectively justifiable purposes.

a. relationship between the mandatory requirements and Article 30: The cases

Traditional view: 1. mandatory requirements in Cassis are separate from Article 30 justifications.2. Cassis exceptions can only be used if rules are not discriminatory.3. Cassis list is not exhaustive.

Modern view:1. distinction between Article 30 and mandatory requirements is fading.2. discussion whether Article 30 list is exhaustive3. difficulty to distinguish between cases involving discrimination and those

concerning indistinctively applicable rules

b. the mandatory requirements: consumer protection

Commission v. Germany case 178/84 Facts: German law prohibited the marketing of beer called ‘beer’ if it did not comply with the German Reinheintsgebot. Beer must be made from certain ingredients.Held: German designation ‘Bier’ may not be restricted to beers manufactured according to the Reinheitsgebot (certain ingredients). It is legitimate to seek to enable consumers who attribute specific qualities to beers manufactured from specific ingredients to make their choice in light of that consideration. BUT: consumer protection may be ensured by less restrictive means, which do not prevent marketing of foreign beers: compulsory labelling!

In some cases, labelling was regarded as breaching Article 28! Fietje case 27/80: obligation to use a certain name on the label could make it more difficult for importers to market their goods. Protection is not justified if the details given on the original labels contained the same information as required by the importing state, and that information was capable of being understood.

c. the mandatory requirements: fairness of commercial transactionBereczky – McGill Law92


Fairness of consumer transactions: 5. national rules that seek to prevent unfair marketing practises, such as selling

imported goods which constitute precise imitations of familiar domestic goods.6. Such rules may be justified if they do not prohibit the marketing of goods

which have been made according to fair and traditional practises in state A, merely because they are similar to goods made in state B.

d. the mandatory requirements: public health

Commission v. Germany, case 178/84 Facts: German law put an absolute ban on the marketing of beer with additives on public health grounds. It was accepted that the rule did not constitute a barrier to the import of beer.Held: If rule meets a genuine need of health policy (Article 36), it is OK. A measure must be proportional: restricted it what is actually necessary to secure the protection of public health. If scientific research shows that additive does not pose a risk to health, its use must be authorised. Traders must also be given an opportunity to apply for the authorised use of specific additives.

e. other mandatory requirements

Protection of the environment

Commission v. Denmark case 302/86 Danish law required that beer/soft drink containers be returnable and re-useable. A national agency had to approve the containers.Held: Protection of the environment is one of the Community’s essential objectives, and a mandatory requirement: justifies certain limitations on the free movement of goods. Deposit-and-return system of containers is necessary and proportionate for achieving environmental protection. Require the use of containers authorised by national agency only, and restriction of the quantity of unauthorised products which may be marketed by importers, is disproportionate.

13.8 Broader perspectives on Cassis

a. the advantages of the ECJ’s jurisprudence and the Commission’s response to Cassis

Commission’s response:mutual recognition rule: 1. goods lawfully produced and marketed in one member state should in

principle be admitted to the market of other member states.2. Provided that foreign product fulfilled the legitimate objectives of importing

state’s rules, albeit by different means, foreign goods must be admitted.Barriers to trade:1. barriers to trade are only admissible if:

a. rules are necessary - appropriate and not excessive – to satisfy the mandatory requirements;

b. rules serve a purpose in the general interest which is compelling enogh to justify an exception to the free movement of goods;

c. rules are essential for the purpose to be attained.2. absolute prohibition of sale is never necessary to satisfy a mandatory

requirement

Commission’s objective:


EU LAW I – Prof. De Mestral Fall 20041. Commission will aim at harmonising legislation targeted at those rules which

are not caught by Article 28 but still pose a restriction to the free movement of goods.

2. These are in particular rules covering the composition, designation, presentation and packaging of goods, rules requiring compliance with technical standards.

Criticism:3. mutual recognition will lead to a lowering of safety and quality standards4. consumer groups argued that it is good to have a broad range of goods

available, but there are consequences for consumer safety: balance needs to be struck between free trade/variety of goods, and the need to protect the health, safety of consumers

Foie gras case C-184/96: From now on, everx state imposing legal requirements as to product characteristics, must include a mutual recognition clause in the law.

b. Problems flowing from the ECJ’s and Commission’s strategy [deregulation by case law (negative deregulation) and legislative harmonisation (positive deregulation)]

1. strategy is dependent on agreement with the outcome of the adjudicative process

HC von Heydebrand, Free Movement of Foodstuffs, Consumer Protection and Food Standards in the EC: Has the Court of Justice Got it Wrong?

5. ECJ may simply not be right that consumers are adequately informed through labels, consumers do not pay much attention to labels

6. ECJ decisions can confer an unfair competitive advantage on importers: consumer associates with the name or presentation of a product a familiar domestic product the quality of which is not met by the imported product

2. Strategy imposes balancing exercise between market integration and the attainment of societal goals

3. strategy imposes balancing exercise between market integration and the protective function played by national rules

There is a risk that the Court has introduced a legal test in Cassis that tends to tip the balance away from legitimate social protection towards a deregulated free market economy.

M. Maduro, We the Court, The ECJ and the European Economic Constitution

Allocation of regulatory powers in three ways:1. centralised constitutional model: reacts to the erosion of national regulatory

powers through Article 30 by favouring a process of market integration by means of a replacement of national laws with Community laws.

2. competitive constitutional model: promotes competition among national rules through principle of mutual recognition.

3. decentralised constitutional model: states will retain regulatory powers but are prevented from adopting protectionist policies

Three visions of European Economic Constitution:1. negative integration (ECJ) must be followed by positive integration

(Community legislation to harmonise)2. constitutionalization of negative integration: protects market freedom and

individual rights against public power


EU LAW I – Prof. De Mestral Fall 20043. highest source of legitimacy is national democratic legitimacy

13.9 Conclusion

legislative consequence of Cassis : need for legislative harmonisation pursuant to Article 95 of national rules that could be justified by mandatory requirements

judicial consequence of Cassis : distinction made between rules pertaining to the characteristics of goods and rules pertaining to selling arrangements. ECJ has brought selling arrangements increasingly within Article 28

second-order judicial consequence of Cassis : ECJ must decide whether member state can legitimately plead a mandatory requirement as a defence

regulatory consequences of Cassis: member states lost regulatory competence (Rule of mutual recognition); EC acquired regulatiry competence since the existence of a mandatory requirement brought Article 95 (harmonisation of laws) into play.


EU LAW I – Prof. De Mestral Fall 200414. FREE MOVEMENT OF WORKERS AND PEOPLE

14.1 IntroductionFree movement of persons is one of the four fundamental freedoms of Community law; it deals primarily with the free movement of employed persons. There is a fundamental tension between the economic and social aspects of the freedom, between the role of worker as unit of production and of worker as human being and part of a family. The policy of furthering the free movement of workers has been linked with a broader notion of European solidarity, with the underlying aspiration of integration of the peoples of Europe.

Significant developments: The TEU introduced citizenship into EC law. The Treaty of Amsterdam brought the position of third country nationals directly into EC law. Art. 39 (ex 48) 1. Freedom of movement of workers shall be secured within the Community.2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.3. It shall entail the right, subject to limits justified on grounds of pubic policy, public security or public health:a) to accept offers of employment actually made;b) to move freely within the territory of Member States for this purpose;c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action;d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in implementing regulations to be drawn up by the Commission.4. The provisions of this Article shall not apply to employment in the public service.

Art 39 is directly effective. It is not just vertically effective, but horizontally as well: it prohibits discrimination on the basis of nationality by international sporting associations that are neither public nor state bodies (Case 36/74, Walrave and Koch v. Association Union Cycliste Internationale). It does not apply to wholly internal situations.

Roman Angonese v. Cassa di Riparmio di Bolzano SpA (2000) Facts: Angonese applied for a job at a bank. A condition for entry into the competition was a certificate of bilingualism. He was bilingual, but didn’t have a certificate. Argued that requirement was a violation of art 39.Held: Prohibition against discrimination based on nationality applies not only to public authorities, but to rules of any other nature aimed at regulating in a collective manner gainful employment and the provision of services.-“the prohibition of discrimination based on nationality applies not only to the actions of public authorities but also to rules of any nature aimed at regulating in a collective manner gainful employment and the provision of services”-“the prohibition of discrimination applied equally to all agreements intended to regulate paid labour collectively, as well as to contracts between individuals”-“the prohibition of discrimination on grounds of nationality laid down in art.39 must be regarded as applying to private persons as well”



14.2 Definition of “worker”The definition of worker is a matter for Community law (Case 75/63, Hoekstra). The ECJ requires the term worker to be a Community concept AND claims ultimate authority to define its meaning and scope. The scope of the term will be construed broadly, given that the establishment of the freedom constitutes part of the foundations of the Community

Any person who pursues activities which are effective and genuine, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary, will be treated as worker.

Levin v. Staatssecretaris van Justitie (1982) Facts: Levin a Brit, married to a non-EC national. Moved to the Netherlands, application for residency denied because she didn’t make enough money – the government had a minimum wage requirement to keep residents above subsistence level.Held: “Worker” and “activity as an employed person” define the scope of a fundamental freedom guaranteed by the Treaty, and so should be given a broad interpretation. They include all workers, whether permanent, seasonal or frontier workers. No condition on kind of employment or amount of income is imposed. The effectiveness and objectives of Community law would be jeopardised if the freedom were restricted to full-time work. However, the freedom includes only effective and genuine activities, and not activities on such a small scale that they are marginal or ancillary.-“whilst part-time employment is not excluded from the field of application of the rules on freedom of movement for workers, those rules cover only the pursuit of effective and genuine activities to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary”

The fact that a worker may get some of their money from public funds (ie. welfare) doesn’t mean their activities aren’t effective. (Kempf) The key is the genuinely economic nature of the work.

Steymann v. Staatsecretaris van Justitie (1988) Facts: Steymann was a plumber who joined a religious community in the Netherlands. He worked for no money; the community provided for his material needs. He was turned down for a residency permit to pursue economic activity.Held: His activities in the community are economic activity, because they are connected with the community’s commercial activity. All members must work, and are taken care of in return. It is, therefore, a quid pro quo.

The general rule is that the purpose for which employment is undertaken is irrelevant, and only whether the employment is genuine and not marginal may be

considered.


Lawrie Blum p. 709German measure restricts access for non-nationals to the preparatory service stage necessary for qualification as secondary school teacher-“[worker] concept must be defined in accordance with objective criteria which distinguish the employment relationship by reference to the rights and duties of the persons concerned. The essential feature of an employment relationship, however, is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives


During time of state, the trainee teacher will be considered a worker since the 3 conditions will be fulfilled: performance of services of an economic value, under the direction of the school and earning of remuneration. The amount of remuneration

received is not relevant

The fact that work seemed to be unpaid does not mean that it was not an economic activity; the fact that the employment is not average is no reason to deny a permit; the question if employment is ancillary and marginal is left to national courts to determine. Eg of facts to consider: very limited hours worked, being called upon to work, etc.

Contrary to Leuvin, the purpose for undertaking the work was crucial to the decision which was reached. The fact that the sole purpose was to rehabilitate the person rather than to meet a genuine economic need resulting in a ruling against the individual.

In Brown, fact that someone worked purely in order to prepare for a course of study rather than to prepare for an occupation or employment means that not all the advantages provided for workers within Community law may be claimed (work was only “ancillary” to course of study). Does not disqualify him as a worker BUT limits his rights.

14.3 Individuals seeking work

R. v. Immigration Appeal Tribunal, ex parte Antonissen (1991) The freedom of movement of workers must be interpreted as entailing the right for nationals of member states to move freely within the territory of other member states and to stay there for the purposes of seeking employment. To hold otherwise would make the provision ineffective.-“art. 39(3) must be interpreted as enumerating, in a non-exhaustive way, certain rights benefiting nationals of member-states in the context of the free movement of workers and that that freedom also entails the right of


Steyman p.710German national living in Netherlands. Was a plumber but decided to join a religious community and provided for the needs of the community thereHis application for residence permit was refused. National court made reference-“participation in a community based on religion or another form of philosophy falls within the field of application of Community Law in so far as it can be regarded as an economic activity”-“the work aims to ensure a measure of self-sufficiency for the Community and constitutes an essential part of participation in that community. The services which the community provides to its members may be regarded as being an indirect quid pro quo for their work”

Bettray p. 711-Person had to undertake a therapeutic work as part of a drug-rehabilitation programme -paid by the Dutch social employment programme-“work under the social employment law cannot be regarded as an effective and genuine economic activity if it constitutes merely a means of rehabilitation or reintegration for the persons concerned and the purpose of the paid employment”-“ persons employed are not selected on the basis of their capacity to perform a certain activity, it is the activities which are chosen in the light of the capabilities of the persons who are going to perform them in order to maintain, re-establish or develop their capacity to work”

EU LAW I – Prof. De Mestral Fall 2004nationals of member states to move freely within the territory of the other member state and to stay there for the purpose of seeking employment”

-Court went for extent approach of freedom of movement of workers. Would be too limited to say that only when possession of confirmation of employment is needed.-BUT rights may be limited if job-seeker (eg employment insurance may not be conferred to someone not employed)States retain power to expel a job-seeker who has not found work after a period of time (usually a minimum time of 6 months)

14.4 Discrimination

Direct discrimination is obviously prohibited by art 39. So is indirect discrimination. Most often, it comes in the form of residency or place of origin requirements that can more easily be satisfied by nationals than non-nationals. Language requirements are also an impediment, although Regulation 1612/68 allows for “conditions relating to linguistic knowledge required by reason of the nature of the post filled.”

Direct or indirect discrimination will be usually found where two groups which are comparable are treated differently or where groups which are not comparable are treated in the same way.

- the fact that there was no discrimination was irrelevant- such measure could have been justified only of were necessary and

proportional- general rule : provisions which could preclude or deter a national of a member

state from leaving his country of origin in order to exercise his free-movement rights constitutes an obstacle to that freedom even if they apply without regard to the nationality of the workers concerned.

Ugliola p.715Italian worker in German challenges German law under which a worker’s security of employment was protected by having periods of military service taken into account in calculating the length of employment. Law applied only to those who had done their military in German region, although the nationality of the worker was not important.This amounts to discrimination since “German law created an unjustifiable restriction by indirectly introducing discrimination in favor of their own nationals alone, since the requirement that the service be done in the German region would clearly be satisfied by a far greater number of nationals than non-nationals”

Groener v. Min. of Education (1989) Facts: Groener a Dutch teacher, teaching in Ireland. Applied for a full-time position, turned down because she couldn’t take a Irish test. Teaching was to be done exclusively in English.Held: The Treaty doesn’t prohibit policies for the protection of a language of a member state where it is the national language and the first official language. The implementation of that policy must not encroach on the free movement of workers. Requirements must be proportionate, must not discriminate against nationals of other member states.-“the treaty does not prohibit the adoption of a policy for the protection and promotion of a language… however the implementation of such a policy must not encroach upon a fundamental freedom such as that of the free movement of workers. Therefore, the requirements deriving from measures intended to implement such a policy must not in any circumstances be disproportionate in relation to the aim


EU LAW I – Prof. De Mestral Fall 2004pursued and the manner in which they are applied must not bring about discrimination against nationals of other member states”.

Bosman p.718-Transfer system of football player requires that the club who wants to engage a player from another club has to pay a sum of money to that club-Bosman was Belgian player in Belgian team sought by a French club who did not want to pay the money; he said that ayment represented a restriction on the free movement of players. Football association argued using Keck because the system did not look at the players’ nationalities-para 103 “[the rules] still directly affect players’ access to the employment market in other Member States and are thus capable of impeding freedom of movement of workers. They cannot, thus, be deemed comparable to the rules on selling arrangements for goods which in Keck were held to fall outside the ambit of art. 28”-para 104 “the transfer rules constitute an obstacle to freedom of movement for workers prohibited by art 39. It could only be otherwise if those rules pursued a legitimate aim compatible with the Treaty and were justified by pressing reasons of public interest. But even if it were so, application of those rules would still have to be such as to ensure achievement of the aim in question and not go beyond what is necessary for the purpose”

14.5 Public Service Exception

Commission v. Belgium p.723Possession of Belgian nationality was required as a condition of entry for posts with Belgian local authorities and public undertakings, regardless of the nature of the duties performedCommission argued that scope of art 39(4) could only cover posts implying actual participation in the exercise of official authority by those occupying them-para 10 “That provision (art.39(4) removes from the ambit of art 39(1) to (3) a series of posts which involve direct or indirect participation in the exercise of powers conferred by public law and duties designed to safeguard the general interests of the State or of other public authorities”-para 11 “the effect of extending the exception to posts which, whist coming under the States or other organizations governed by public law, still do not involve any association with tasks belonging to the public service properly so called, would be to remove a considerable number of posts from the ambit of the principles set out in the Treaty and to create inequalities between states according to the different ways in which the State and certain sectors of economic life are organized”

-Commission gave a functional answer -A post will benefit from the derogation in art 39(4) only if it involves BOTH the exercise of power conferred by public law AND the safeguarding of the general interests of the state-This derogation has to be confined to restricting the admission of non-nationals into the public service, but it does not permit discrimination in conditions once they are admitted


EU LAW I – Prof. De Mestral Fall 200414.6 Formal requirements for workers

Directive 68/360, adopted under article 49 (now article 40) clarifies certain formal requirements relating to the right of entry and residence of non-nationals

-In this case, expulsion was too severe-However, ECJ said Community law could not prevent the states from adopting provisions to control non-nationals, backed up with appropriate sanctions other than expulsion. Principle of proportionality of sanctions for administrative breaches, which requires that sanctions should not impose excessive restrictions on freedom of movement, is central to the law in this area.

Watson p. 731-British national and one person of the Italian family with which he was staying was charged with failure to report the presence of a foreign national within 3 days-Penalty could go up to 3 months imprisonment, and in case of foreign national, to deportation-para 20 “the penalties … is certainly incompatible with the provisions of the treaty, … such a measure negates the very rights conferred and guaranteed by the treaty”-Para 21 : “whilst the national authorities are entitled to impose penalties in respect of a failure to comply with the terms of provisions requiring foreign nationals to notify their presence which are comparable to those attaching to infringement of provisions of equal importance by nationals, they are not justified in imposing a penalty so disproportionate that it becomes an obstacle to the free movement of persons”

-The situation is less clear for non-nationals who have not found any work in host country-Directive 68/360 provides that a residence permit cannot be withdrawn solely on the ground that the worker is unemployed. It provides also that if involuntary unemployment has continued for more than 12 months the period of residence may be restricted to no less than 12 months.

Antonissen p. 733See facts before. Case of unemployed actively seeking work. -“in the absence of community provision prescribing the period during which the community nationals seeking employment in a member state may stay there, a period of 6 months, such as the one laid down in the national legislation at issue, does not appear in pple to be insufficient to enable the persons concerned to apprise themselves of offers of employment corresponding to their qualifications… However, if after the expiry of that period the person concerned provides evidence that he is continuing to seek employment and that he has genuine chances of being engaged, he cannot be required to leave the territory”


Royer p.730-French residing in Belgium. Failed to comply with administrative requirements once he had entered the Belgian state and was told to leave the country-Q to ECJ: the right of residence is independent of the possession of a permit? In case of failure to comply with administrative requirements, is this a ground for deportation?-para 33 : “the grant of the residence permit is to be regarded not as a measure giving rise to rights but as a measure by a member state serving to prove the individual position of a national of another member state with regard to the provisions of community law”-para 38 : “the mere failure by a national of a member state to complete the legal


14.7 Scope of article 39: impediment to market access and wholly internal situation

Access to employment marketEven where there is no discrimination, a measure will be invalid where it acts as an obstacle to the access of workers form one member state to employment in another member state. (Bosman) National obstacles might be justified on public interest grounds, but they are prima facie a violation of the Treaty.

Provisions which could preclude or deter a national of a Member State from leaving his country of origin to exercise his free-movement rights constituted an obstacle to that freedom even if they applied without regard to the nationality of the workers concerned. (Terhoeve)

Wholly internal situationArticle 39 does not apply to situations of reverse discrimination where nationals of a Member State cannot claim rights that nationals from another Member State can claim from that State. There must be a factor connecting a situation to community law. (Saunders) However, as exemplified by Terhoeve, a worker will be able to use article 39 against his own or her own State upon his or her return, when the worker has been employed and has resided in another Member State.

14.8 Substantive rights and social advantages

-art. 39 also confers positive, substantive rights of freedom of movement and equality of treatment on EC workers-Community workers enjoy a considerable range of the substantive benefits available to nationals-some regulations cover the families of the EC workers-important reg : 1612/68 p. 734-735-art. 7 : social and tax advantages and equal access to vocational training .Also provides for permissible limits to these advantages

Evan p.738-French working in Belgium receives pension from Belgian national pension office-a percentage reduction of the pension each year was made for everyone except Belgian nationals who were in receipt of WWII service invalidity pension-Evan received such pension from French gvt and did not want to have to suffer deduction according to treatment of equality -“such a benefit is based on a scheme of national recognition, and cannot therefore be considered as an advantage granted to a national worker by reason primarily of his status of worker or resident on the national territory and for that reason does not fulfill the essential characteristics of the “social advantage” referred to in art 7(2) of the regulation”

- There is a special relationship between citizens and state regarding military service justifying the difference regimes

- 3 factors in determining if workers are entitled under art 7(2) to a particular benefit:

1.their status of workers 2.their residence on the national territory 3.the suitability of the benefit in facilitating their mobility within the community


EU LAW I – Prof. De Mestral Fall 2004- It is only workers and those family members specifically listed in the Regulation

who may avail themselves of the social advantages - in Lebon, ECJ rules that once the child of a worker reached the age of 21, and

was no longer dependent on the worker, benefits to that child could not be construed as an advantage to the worker

- residence’s right of the spouse of the worker is dependent on the right of residence of the worker and of the housing requirement (art.10) although does not oblige to live together.

Morson p. 7422 Dutch working in the Netherlands were refused the right to bring their parents from Suriname. -no right to bring the parents because they are nationals working in their own state who had never exercised the right to freedom of movement within the Community. Had they be working in another member state, they would have been covered by art.10

Diatta p.741-Senegalese woman married to French, residents of Germany-They separated. She was refused an extension of her residence permit on the ground that she was no longer a family member of an EC national-Para 18 : “a requirement that the family must live under the same roof permanently cannot be implied”Para 20 : “the marital relationship cannot be regarded as dissolved so long as it has not been terminated by the competent authority” Singh p. 743-Indian national married to UK national. Both worked in Germany and sought to re-enter UK-Indian wife argued right to movement -UK argued that the British spouse’s right to re-enter the UK derived from national law and not community law- “a national of a member state might be deterred from leaving his country of origin … if, on return, the conditions of his entry were not at least equivalent to those which he would enjoy under the Treaty in the territory of another State”Para 20 “he would be deterred from so doing is his spouse and children were not also permitted to enter and reside in the territory of his member state of origin under conditions at least equivalent to those granted by community law in the territory of another member state.”

- Right of movement incorporates right to return.

14.9 Education

-3 typical ways in which education rights have been guaranteed by Community law

1. children of the worker -art.12 of Reg 1612/68 -children of EC workers are put in same position as the children of nationals of that state- art.12 confers rights to children of workers even after they are 21 (broader than

art.10)

2. When worker moves and wants educational training, following the principle of equality- art.7 Reg 1612/68


EU LAW I – Prof. De Mestral Fall 2004- part of substantive equality of treatment to which EC workers are entitled

(same advantages, grants and facilities available to nationals)- BUT limited to vocational studies which provide only instruction either in

alternating or closely linked to an occupational activity need some continual link between previous work and the studies; and the work must not be ancillary to the studies

Evan p.738-French working in Belgium receives pension from Belgian national pension office-a percentage reduction of the pension each year was made for everyone except Belgian nationals who were in receipt of WWII service invalidity pension-Evan received such pension from French gvt and did not want to have to suffer deduction according to treatment of equality - “such a benefit is based on a scheme of national recognition, and cannot therefore be considered as an advantage granted to a national worker by reason primarily of his status of worker or resident on the national territory and for that reason does not fulfill the essential characteristics of the “social advantage” referred to in art 7(2) of the regulation”

3. Students

Gravier p. 747-French student challenged the requirement of a registration fee in cartoon art class in Belgium-He had no family nor any right of residence in Belgium, apart from claim as student to such a right based on art. 12 and 150 of Treaty (equal treatment in regards to education)-“although educational organization and policy are not as such included in the spheres which the Treaty has entrusted to the Community institutions, access to an participation in courses of instruction and apprenticeship, in particular vocational training, are not unconnected with Community law”-“access to vocational training is in particular likely to promote free movement of persons throughout the Community … It follows that the conditions of access to vocational training fall within the scope of the Treaty”

- This is a broad approach- Two ways that states can still limit the duty to treat everyone alike (would

create big financial consequences) : interpret “vocational training” or “conditions of access” restrictively.

- “vocational training” excludes university courses that improve general knowledge.

- ECJ draws the line at education. Like taxation, it is still a national matter so not all the advantages are given to every students, not matter his nationality

14.10 Citizenship

- Nice treaty has changed art.18 (2) and added (3)- extension of the right of residence, not longer only workers, BUT subject to

“limits and conditions”- eg. Unemployed people cannot depend on social services, and should have

sickness insurance (rights of residence not conferred to EU citizens that lack sufficient financial resources)

- allowance for children is part of the freedom of movement on the ground that no allowance makes it harder for freedom of movement to be exercised

- Sala cannot be discriminated against (art. 12)Bereczky – McGill Law104


Sala p.757-Spanish national in Germany for 30 years. Worked until 1989. Then received social insurance. She did not have her residency permit renewed since 1984-Applied for child-raising insurance but was refused because she was not a national-She argues this is a breach of EC law because causes discrimination-Germany argued her situation was not covered by the Treaty (she’s not a worker)ECJ: a child-raising allowance is within the scope of the Treaty-para 61 “as a national of a member state residing in the territory of another state, the appellant comes within the scope rationae personae of the provisions of the Treaty on European citizenship”-para 62 “art. 17(2) attaches to the status of citizen of the Union the rights and duties laid down by the Treaty, including the right, laid down in art 12 not to suffer discrimination on grounds of nationality within the scope rationae personae of the Treaty”-para 63“a citizen of the European Union … can rely on art 12 in all situation which falls within the scope of the treaty”

Grzelczyk p. 758-French studying in Belgium (not a worker)-Applies for minimum subsistence allowance-it is refused on ground that he is not a national -para 29 “the fact that G is not Belgian is the only bar to the allowance being granted it is discrimination”-para 31“union citizenship is destined to be the fundamental status of nationals of the Member states, enabling those who find themselves in the same situation to enjoy the same treatment in law irrespective of their nationality, subject to exceptions”-para 32 “a citizen of the EU, lawfully residing in the territory of a host state, can rely on art 12 in all situations which fall within the scope of Community law”-para 33 “those situations include those involving the exercise of fundamental freedoms guaranteed by the Treaty and those involving the exercise of the right to move and reside freely in another member state as conferred by art. 18”

- Steps of the Court analysis: 1.found discrimination 2. use of citizenship to determine the sphere of application of art 12, and application in situations that come within the scope of Community law 3. the scope of community law is defined in part by the right to move and reside freely in another Member State

- As such, may be VERY far-reaching. Once individual is in the state, need to treat him like all others.


EU LAW I – Prof. De Mestral Fall 200415. FREEDOM OF SERVICES AND RIGHT TO ESTABLISHMENT

15.1 Introduction

Free movement of persons also covers the self-employed who move on a temporary or permanent basis. Secondary legislation regulates fields such as insurance, financial services, telecom, and broadcasting.

Articles 43-48 govern freedom of establishment- requirement of removal or restrictions on the rights of individuals and

companies to maintain a permanent or settled place of business in a member state

- definition of establishment: ‘the actual pursuit of an economic activity through a fixed establishment in another member state for an indefinite period’

Articles 49-55 govern freedom of movement of services- Requirement of removal of restrictions on the provision of services between

member states, whenever a cross-border element is present- Cross-border element can result from the fact that (i) the provider is not

established in the state where services are supplied; (ii) recipient of services has travelled to receive services in another member state

- Provisions governing the free movement of services are residual: apply only in so far as the provisions concerning capital, persons, goods do not apply

- there are exceptions to freedom of movement on grounds of public policy, security, health, BUT: ECJ has also recognised other public-interest justifications

15.2 Persons, services, and establishment: differences and commonalities

Potential overlap between workers (Art 39) and temporary service providers (Art 49). The ECJ distinguished the two by ruling that “workers employed by a business established in one member state who are temporarily sent to another member state to provide services, do not, seek access to the labour market in that second state if they return to their country of origin after completion of their work.”

There are important similarities between establishment and services: at what stateg does a self-employes person providing services in another member state be considered sufficiently connected with that state to be established?

Gebhard case C-55/94 The concept of establishment is broad, allowing an EC national to participate on a stable and continuous basis, in the economic life of another member state and profit therefrom. He thereby contributes to social and economic inter-penetration within the Community.A provider of services moves to another member state to provide services on a temporary basis. The temporary nature of activities is to be determined in light not only of the duration of the service provision, but also its regularity, periodicity or continuity. The temporary nature does not preclude service provider from equipping himself with some form of infrastructure in that other member state, if it is necessary (not deemed to be established just because of infrastructure).



Secondary legislation governing entry and residence

Directive 73/148 Governs terms and conditions of entry of foreign national and his family;Art 1: member states are required to guarantee entry and right to leave without visa;Right of permanent residence;Equality of treatment with nationals

The Commission proposed an umbrella directive on free movement and residence (not separate directives for movement of services/residence of workers)

The ‘official authority’ exception Article 45 EC: provisions on freedom of establishment shall not apply ‘so far as any given member state is concerned, to activities which in that state are connected, even occasionally, with the exercise of official authority.’

public service derogation in the context of self-employed people

Official authority defined: Official authority arises from the sovereignty of the state; it implies the power of enjoying the prerogatives outside the general law, privileges of official power and powers of coercion over citizens.

Reyners v. Belgium, case 2/74 Facts: Dutch national was refused admission to Belgian bar because of lack of nationality, although he had studied law in Belgium. The issues was whether legal profession of avocat as a whole was exempt from the freedom of movement of services. Held: Art 45 is fully satisfied when the exclusion of nationals is limited to those activities which constitute a direct and specific connection with the exercise of official authority. Extension to the whole profession is possible only in cases where such activities are linked with the profession in such a way that “freedom of establishment would result in imposing on the Member State concerned the obligation to allow the exercise, even occasionally, by non-nationals of functions appertaining to official authority.” Professional activities involving contacts with courts do not constitute connection with the exercise of official authority.

Are the freedoms horizontally applicable?

Walrave and Koch, case C-281/98 The Treaty prohibition against discrimination on grounds of nationality applied not only ‘to the action of public authorities but extends likewise to rules of any other nature aimed at regulating in a collective manner gainful employment and the provision of services.’

Wouters, case C-309/99 Abolition of obstacles to freedom of movement of persons would be compromised if the abolition of state barriers could be neutralised by obstacles resulting from the exercise of their legal autonomy by associations or organisations not governed by public law.

BUT: does it apply only to collective bodies or also to individuals?? UNCLEAR



15.3 The right of establishment

Art 43 EC Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on setting up of agencies, branches, or subsidiaries by nationals of any Member State established in the territory of any Member State.Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the chapter relating to capital.

Limits of Art 43:- cannot be invoked by nationals against their own member state- rights of establishment ‘under the conditions laid down for its own nationals.’

Discrimination is prohibited as long as there is equal treatment with nationals.

BUT: ECJ eventually gave a wider scope to that provision – even non-discriminatory measures can be an obstacle to the freedom and infringe Art 43.

Art 47: requires Council to pass directives for the facilitation of the freedom of establishment:

- mutual recognition of diplomas- 1961 General Programme: elimination of restrictions on powers attaching to

conclusion of contracts, acquisition of property, access to credit, receipt of state aids

The effect of Article 43

Reyners, case 2/74 Art 43 is directly effective, even without implementing directives. It provides a precise result: non-discrimination on grounds of nationality. Fulfilment of result is to be made easier by directives, but not dependent on them.

Thieffry, case 71/76 Facts: Belgian national had obtained doctorate in law in Belgium and practised as an advocate in Brussels, then obtained French university recognition of his law degree. Was refused admission to the Paris bar.Held: Practises of professional bodies or public service must ensure freedom of establishment. Person cannot be denied the benefits of the freedom just because directives have not yet been passed. Thieffry had obtained what was recognised as an equivalent qualification: state authorities are not justified in refusing bar admission.

Heylens, case 222/86 Belgian football trainer worked in France, wanted to have his diploma recognised there.Held: Member states can regulate the qualification necessary to pursue a profession. But, procedure must enable the national authorities to assure themselves, on an objective basis, that the foreign diploma certifies that its holder has equivalent


EU LAW I – Prof. De Mestral Fall 2004qualifications to the national requirements. National can obtain judicial review of a decision of authorities on recognition: ascertain the reasons for refusal.

Vlassopoulou, case 340/89 Facts: Greek national with Greek law degree had practised law in Germany, applied for admission to the bar, was refused.Held: National requirements for admission to a profession represent a hindrance to the freedom of establishment if they take no account of the knowledge and qualifications already acquired by the person. Amember state must take into consideration the diplomas, and other evidence of qualification of the person – ie. any education of training.

Council Directive 89/48: Mutual recognition of higher education diplomas.Art 43 simply provides that a person cannot simply be refused entry to a profession on the ground that she lacks domestic qualification.BUT: Art 43 does not confer a right to facilities for the completion of adaptation period.

Legislative harmonisation and mutual recognition of qualifications

- Directive 99/42 - general mutual recognition- Directive 98/5 - right of establishment for lawyers- Directive 89/48: general system for the recognition of higher education

diplomas: applies to all regulated professions of at least 3 years university training those not covered by specific directive recognition based on mutual trust applies to fully qualified professionals where there are major differences in training, an adaptation period or

aptitude test- Directive 92/51: recognition of education and training not covered in Directive

89/48 diplomas awarded after post-secondary course of at least one year certificates after training courses other than post-secondary vocational training

For professions which are unregulated, the Vlassopoulou principles are applied: requirement to examine knowledge and qualifications already acquire give proper reasons for non-recognition access to judicial remedy

These directives do not apply to qualifications obtained outside the EC. Recognition of foreign training must be brought about by bilateral agreements. Non-EU nationals have no right to recognition under Article 43, even if they obtained training within the EC.

The scope of Art 43

Commission v. Belgium, case 221/85 Facts: Clinical laboratories had to have their primary establishment in Belgium in order to practise there, but this applied to everyone equally (no reference to nationality).Held: This was not a breach of Article 43. Each member state is free to lay down rules for its own territory governing the activities of laboratories.


EU LAW I – Prof. De Mestral Fall 2004Klopp, case 107/83 German lawyer was refused admission to the Paris bar because he maintained office in another member state.Held: France cannot require a lawyer to have only one establishment: Article 43 guarantees the freedom to set up more than one establishment. There are less restrictive ways to ensure that lawyers maintain sufficient contact with their clients and the judicial authorities in France.

The ECJ has gradually adopted a common approach to all free movement rules: non-discriminatory restrictions on access can be caught by Art 43.

Gebhard, case C-55/94 German national was refused admission to the Milan bar, and his qualification had not formally been recognised. Held: National measures hindering or making less attractive the exercise of fundamental freedoms must fulfil four conditions: 1) must be applied in a non-discriminatory manner; 2) must be justified by imperative requirements in the general interest; 3) must be suitable for securing the attainment of the objective; 4) must not go beyond what is necessary.

There was no mention of requirement of discrimination in this decision. But the discriminatory nature of a restriction is not irrelevant: discrimination on grounds of nationality will fall directly within the prohibition in Art 12 EC => state may rely on exceptions in Article 46. If the national rule is equally applicable, which does not constitute deliberate discrimination, there is a wider and open-ended range of public interest grounds to rely on for justification.

(i) The ‘reverse discrimination’ question: can nationals rely on Article 43 in their own member state?

Nationals setting up in a self-employed capacity in their own member state cannot complain under Art 43 about the domestic regulation of these activities.

Knoors, case 115/78 Dutch national had obtained training in Belgium, wanted to practise as a plumber in the Netherlands. He relied on Directive 64/427.Held: The directive cannot be applied in purely internal situations. But if a national resided in another member state to obtain a qualification, state of origin must recognise this qualification according to the same criteria as with a foreign EC national, otherwise, freedom of movement would be discouraged.

NOTE that subsequent cases are more restrictive.

Bouchoucha, case C-61/89 B, French national, had obtained osteopathy degree in the UK, wanted to practise in France. France refused to recognise, since he was not a doctor, as required in France.Held: In the absence of Community legislation, a state is free to regulate the exercise of an activity within its territory, without discrimination. Member states have a legitimate interest in preventing abuse of the freedom of movement, such as nationals obtaining degrees abroad easily.

In Vlassopoulou, the authorities were required to compare the nature and content of qualifications with that required under domestic law. In Bouchoucha, where national authorities dealt with their own national, the Court held that in the absence of Community legislation, states are free to regulate professions. Nationals will only be


EU LAW I – Prof. De Mestral Fall 2004permitted to rely on Art 43 to challenge a restriction on establishment in their own member state where there is some Community element present.

(ii) Are restrictions on social benefits contrary to Article 43?

There is no equivalent within the law on freedom of establishment to Regulation 1612/68 (rights of workers and families to be granted the same social and tax advantages as nationals; housing or educational rights for children). The ECJ has interpreted Art 43 as prohibiting national measures which confer social advantages on nationals/companies (primary establishment) to the exclusion of non-nationals/companies (secondary establishment).

Meussen, case C-337/97 Art 42 precludes national legislation which imposed residence requirement on children of self-employed EU migrants, but not on children of nationals, to obtain finance for their studies.

Commission v. Italy, case 63/86 Facts: Italy argued that reduced-mortgage loans and social housing is not to be provided for self-employed non-nationals.Held: Non-national self-employed person must be able to get the same benefits. Restrictions on the right of access to housing and other facilities granted to nationals to alleviate the financial burden is obstacle to pursuit of self-employment. Non-national self-employed person is in a disadvantaged competitive situation, because of a greater financial burden.

15.4 Establishment of companies

Art 48 EC: Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.‘Companies or firms’ means companies or firms constituted under civil or commercial law, including co-operative societies, and other legal persons governed by public or private law, save for those which are non-profit making.

Commission v. France case 270/83 The ECJ drew analogy between the registered office of a company and residency of a natural person. Taxing branches of a company in a member state on the same basis as companies whose registered office is there, but not granting the same tax advantages, is in breach of Art 43. Art 43 ‘expressly leaves traders free to choose the appropriate legal form in which to pursue their activities in another member state.’ Corporate seat serves as connecting factor with the legal system of a member state, like nationality in the case of a natural person.

R. v. HM Treasury, ex parte Daily Mail, case 81/87 Facts: Company resident in the UK wanted to move its registered office to the Netherlands, and have branch in the UK. Company sought permission from the Treasury, which could liquidate of part of its assets. Company argued that this was an unacceptable restriction on its freedom of establishment.Held: Art 43 does not apply: because of wide variation of national laws as to the required factor connecting a company to the territory for the purposes of incorporation, and transfer of a registered office. Companies have similar rights as natural persons to leave their member state, but have no right to move without restriction.



Centros, case C-212/97 Facts: Company was registered in the UK to get around minimum capitalisation requirements, although it never traded there. It wanted to establish a branch in Denmark, which was refused, because its branch would de facto be the principal establishment. Denmark argued that this arrangement was only for tax purposes.Held: Refusal to establish a branch of a company having its registered office in another member state is a restriction on freedom of establishment. ECJ caselaw permits states to take measures to prevent fraudulently taking advantage of Community law. However, Art 43 is intended specifically to enable companies to pursue activities in other member states through agency. If a company chooses to form in a member state whose company law seems less restrictive, this cannot be an abuse of the right of establishment. It is clear from Segers that “the fact that a company does not conduct any business in the Member State in which it has its registered office and pursues its activities only in the Member State where its branch is established, is not sufficient to prove the existence of abuse or fraudulent conduct.”

The choice by company of a member state with lenient company law in order to enjoy the right of secondary establishment is an exercise of the rights inherent in the notion of freedom of establishment.

15.5 Free movement of servicesArt 49 EC Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

The Council may, acting by a qualified majority on a proposal from the Commission, extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the Community.

If you want to benefit from the right to provide services, you have to be established within the EC already.

Art 50 Services shall be considered to be ‘services’ within the meaning of this Treaty where they are normally provided for remuneration, insofar as they are not governed by the provisions related to freedom of movement of goods, capital and persons.‘Services’ shall in particular include(a) activities of an industrial character;(b) activities of a commercial character;(c) activities of craftsmen;(d) activities of the professions.Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is to be provided, under the same conditions as are imposed by that State on its own nationals.

The articles on freedom of movement of services apply only where the activity or restriction is not covered by free movement of goods, persons, capital. Banking, insurance services are dealt with under free movement of capital. Article 55 renders exceptions (public policy, health, security; official authority) applicable to free movement of services


EU LAW I – Prof. De Mestral Fall 2004Definition: Carrying out of an economic activity for a temporary period in a member state in which either the service provider or the recipient of the service is not established.

Gebhard, case C-55/94 Just because the service provider equips himself with the necessary infrastructure (eg. Office), does not automatically mean that his activity is not temporary. It is the permanent nature of the activity that renders someone established rather than providing services.

a. The effect of Article 49

Van Binsbergen, case 33/74 Facts: Dutch national providing legal advice to van B moved his residence to Belgium during the proceedings. The Court told him he could no longer practise in the Netherlands, since he was no longer resident there.Issue: Does art 49 have direct effect, and in Dutch rule compatible with it?Held: Yes, and no.Reasoning: The aim of the Treaty is to abolish restrictions on the freedom to provide services, and to introduce the rules required for this freedom. Art 49 abolished all discrimination against a service provider on grounds of nationality or the fact that he is established in another state from where the service is provided. Art 49, 50 impose a specific obligation not to restrict freedom of movement of services on grounds of nationality/establishment, which member states cannot delay for reason of absence of implementing directives. By the end of the transition period, the art was of direct effect. The national measure was a straightforward violation of the right set out in art 49.

If someone directs most or all of his services at the territory of a particular member state, but maintains his establishment outside that state, that person may be treated as established, if the aim of the operation is to evade professional rules (abuse).

Scope of Article 49

(i) the need for an inter-state element

What about Article 49 and ‘internal situations’? Art 49 does not expressly restrict its coverage to situations of nationals in a member state other than their own. So long as the services are provided for persons established in another member state (cross-border element), a national can invoke Art 49 against his own state.

Debauve, case 52/79 Provisions of the Treaty on freedom to provide services cannot be applied to activities whose relevant elements are confined within a single member state.

(ii) the freedom to receive services

Directive 64/221: Article 1 protects the position of a recipient of services who resides in or travels to another state for that purpose.Directive 73/148: Article 1(b) requires the abolition of restrictions on movement and residence of nationals wishing to go to another state to receive services.

Luisi and Carbone, case 286/82 – 26/83 Although Arts 49 and 50 don’t mention the recipient of services, they are covered as well - the necessary corollary of the freedom to provide services. Freedom of movement for recipients is guaranteed.


EU LAW I – Prof. De Mestral Fall 2004(iii) the economic nature of the services: remunerationDeliège, case C-51/96 Services must be economic in nature. An athlete participating in a competition need not directly provide services. Provision of closely related services is sufficient: organiser puts on a sports event for which broadcasters pay to transmit it, or sponsors and advertisers pay. Services need not be paid directly by those for whom they are performed (the television viewer in this case).

Belgium v. Humbel, case 263/86 The essential characteristic of remuneration: that it is consideration for the service provided, and agreed upon between the provider and the recipient of the service. This is absent in the case of the national education system, because the state provides courses not to make profit, but to fulfil its duties towards its own population. The education system is paid from tax money, not from tuition fees paid by students.

Kohll, case C-158/96 Facts: Treatment provided by orthodontist in another member state. In K’s member state, he had to obtain prior authorisation from social insurance to go and receive the service, that it will be covered.Held: The requirement of prior authorisation is an unjustified restriction. K had actually paid for the service received.

Geraets-Smits/Peerbooms case C-157/99 Facts: G was insured under Dutch social insurance scheme and received medical treatment outside Holland. Although he was required to get prior authorisation prior to treatment, he didn’t.Held: Medical activities fall within the scope of Article 60. Medical service provided in a member state and paid for by the patient should not cease to fall within the scope of the freedom to provide services merely because reimbursement of the treatment is applied for under another state’s health insurance legislation. There is no requirement that the service be paid for by the recipient.Prior authorisation requirement is a barrier to freedom of movement of services. However, in this case justified because it is in the interest of maintaining a balanced medical and hospital service open to all, and preventing the system from being undermined.

(iv) can illegal activities constitute services within Article 49-50?

If someone established in a member state where a particular activity is lawful wants to provide such service in a member state where the activity is unlawful – is that covered by the Treaty?

Koestler, case 15/78 French bank provided services to a German national which are lawful in France, but not in Germany. Can they recover from the client?The contract was a service. It was OK for Germany to restrict the service and not to allow recovery if the same refusal applied to banks established in Germany.

Grogan, case C-159/90 Abortion constitutes a service within Article 49. A member state in which abortion is illegal can prohibit or restrict the provision of the service within its territory.

Schindler, case C-275/92 German lottery wanted to provide services in the UK, where it is unlawful.


EU LAW I – Prof. De Mestral Fall 2004Held: Lotteries were services provided for remuneration (ticket price). Despite being regulated in member states, lotteries cannot be regarded as so harmful that they can be considered illegal. Germany can offer services in the UK

A remunerated activity which is lawful in some member states constitutes a service within Art 49, but member states remain free to regulate and restrict it, as long as they do so proportionally, and without arbitrary discrimination (nationality, place of establishment).

(v) are restrictions on social benefits contrary to Article 49?

Commission v. Italy, case 63/86 (1988) Social housing benefits must be extended to service providers (not only workers) from other member states. Benefit must be in some way connected to the exercise of the economic activity.

Cowan, case 186/87 British tourist beat up in Paris, applies to fund for victims of violence. Tourists are covered by Art 49. Services they received are services in relation to their holiday (hotel, restaurants), for which remuneration is provided. By virtue of having received services, they are entitled to the social benefits in that member state. Protection of service recipients in that member state is corollary of the freedom of movement of services.

This is weird: where’s the service? Getting beaten up is not a service. The court here is reading “service” quite broadly.

Justifying restrictions on the free movement of servicesThe 3 grounds of exception in Art 46 (which allow discrimination) are also applicable to free movement of services by virtue of Article 55: public policy, public security, public health.

Other than that there are ‘objective justifications’. Test is set out in Van Binsbergen:

- restriction must be adopted for a legitimate public interest, not incompatible with Community aims. Public interest must not be an economic aim.

- restriction must be equally applicable to persons established within the state and foreign service providers

- restriction must be proportionate, suitable, appropriate to achieving the aim. Is there a less restrictive means to achieve the aim? Crucial factor: is service provider subject to similar regulation in the member state of establishment (double burden)?

- Fundamental rights must be respected.

‘Objective justifications’ arise out of the concern that foreign service providers fall outside the control of national authorities in the country where services are provided. Service providers might be tempted to establish their residence in the country with the most lenient professional rules, and thereby evade the rules of the country where the services are provided.

Are non-discriminatory restrictions covered by Article 49?

YES. There is an increasing tendency by the ECJ to refer to all the Treaty freedoms as being based on the same principles. No longer necessary for direct or indirect discrimination to be established: if there is an impediment to free movement or a restriction on market access, measure is caught.


EU LAW I – Prof. De Mestral Fall 2004Lawyers’ Services, case 427/85 Facts: Territorial exclusivity rule: In order to practise before certain of the higher court in Germany, lawyer must first be admitted to practise before that judicial authority. Lawyers providing only temporary services in Germany are also subject to the rule.Held: The territoriality rule is not discriminatory on foreign lawyers, not does it duplicate license requirements. Nevertheless, foreign lawyers are in a less favourable position, and the rule cannot be applied to foreign lawyers providing temporary services.

Alpine Investment, case C-384/93 A restriction will not fall outside the scope of Art 49 because it is non-discriminatory in law and fact, UNLESS it is also a restriction which does not in any way affect the access of a person to the market in services of another member state.


EU LAW I – Prof. De Mestral Fall 200416. PUBLIC POLICY, SECURITY AND HEALTH DEROGATIONS

16.1 IntroductionCommon grounds of derogation from the four freedoms are provided for in the Treaty. Just as the ECJ has interpreted the three sets of freedoms fairly expansively and the public-service and official-authority exceptions of art. 39(4) and 45, the common derogations have been given a relatively narrow scope.

Objective: The free movement principle may be derogated from on grounds of public policy, security, health (Arts 39(3), 48(3), 46(1)). Unlike public service and official authority exceptions (art 39(4), 45) which apply to the nature of the work performed, these derogations are concerned with the characteristics of particular persons. The scope of these derogations is determined by both the ECJ and Directive 64/221.

There is no uniform interpretation of the public policy exception, states retain a certain degree of discretion. The ECJ nevertheless put limits to the exercise and scope of these exceptions, through the principles of non-discrimination, proportionality, and protection of fundamental rights.

There are also procedural safeguards in Directive 64/221: exceptions cannot be invoked to serve economic ends. For example, a Member State cannot plead high unemployment to justify deporting or refusing entry to another EC national who wished to take up employment in the State.

Directive 64/221 seeks to co-ordinate national public policy, security, health measures puts substantive limitations on the kinds of permitted derogations provides procedural protection for individuals concerned by derogations applies only to natural persons

16.2 The discretion of the member states

What conduct can justify the invocation of the derogationVan Duyn v. Home Office, 1974. case 41/74 Facts: UK wanted to refuse Dutchwoman entry because she was going to work for Scientologists, which is not prohibited, but strongly disapproved by the British government. UK wanted to invoke public policy exception.Held: Art 3(1) of Directive 64/221: measures taken on grounds of public policy, or security shall be based exclusively on the personal conduct of the individual concerned. Voluntary participation in Scientology, identification with its aims forms part of her personal conduct. The scope of public policy cannot be unilaterally determined by member states, but an area of discretion must be allowed. Where a government clearly defined their standpoint regarding a particular organisation, and where it takes administrative measures to counteract its activities, the activity need not be made illegal. The freedom of movement is subject to proper limitations. Int’l law prohibits a state from refusing entry to its own nationals, however.

What steps may member states take against non-nationals?Van Duyn: so long as the state adopts some administrative measures to countreact the activities of an organisation, it is not required to criminalise or ban the organisation before being able to rely on the public policy exception. There is an inevitable discrimination between nationals and non-nationals. Nationals cannot be deported. Discrimination can be lessened by providing for restrictive measures against the practise of the activity by nationals.



Adouri and Cornuaille, case 115-116/81 Facts: A and C are French nationals working in Belgium. A’s residence application was refused on public policy grounds, because they worked as prostitutes. Belgian prostitutes were not subject to any repressible measures.Held: Prostitution is not prohibited by Belgian law. Authority to adopt measures under the public policy exception must not be result in an arbitrary distinction to the detriment of foreigners. “The conduct may not be considered as being of sufficiently serious nature to justify restrictions on the admission to or residence…where the Member State does not adopt, with respect to the same conduct on the part of its own nationals repressive measures or genuine and effective measures intended to combat such conduct.”

Rutili, case 36/75 Facts: Italian national resident in France worked as a trade union official. In 1968, France prohibited him from residing in certain territories of France.Held: Restrictions cannot be imposed unless the presence or conduct of the person constitutes a genuine and sufficiently serious threat to public policy. Measures must be based on the conduct of a particular individual, not general considerations. Public policy exception should not be invoked to serve economic ends. A ban on residence may only be imposed for the entire territory of a state; partial bans unacceptable: foreigners must be treated on equal footing with nationals.

‘Personal conduct’ requirementDirective Article 3(2): previous criminal convictions in themselves are not sufficient to justify invoking an exception.

Bonsignore, case 67/74 B was Italian working in Germany. He fatally injured his brother and was convicted of causing death by negligence, but since it was a tragic accident, no punishment was imposed. Afterwards, deporation order was made.Issue: Can person be deported as a preventive measure?Held: Deportation order may only be made for breaches of the peace and public security which might be committed by the individual. Deportation of a ‘general preventive nature’ is prohibited.

Bouchereau, case 30/77 Facts: B was French national, twice convicted for possession of drugs. After the second conviction, deportation was recommended.Held: ‘Previous criminal convictions shall not in themselves constitute ground for the taking of such measures.’ Previous criminal convictions can only be taken into account in appraising whether person poses threat to public security, if there is evidence of personal conduct constituting a present threat.

A criminal conviction may be evidence that person is a present danger. A threat to public policy must be ‘genuine and sufficiently serious’: something more than just breach of law is required; society’s fundamental interests must be threatened.

Procedural protections under directive 64/221Aim of Directive 64/221 is to reduce the discretionary power of the state by requiring that the individual position of workers be given a thorough examination before exceptions are invoked against such person. Examination must be subject to review by the courts. The directive sets limits on what can constitute a public policy, security or health ground.

Article 5 Grant or refusal of residence permit should be made as soon as possible, no later than 6 months after application


EU LAW I – Prof. De Mestral Fall 2004Article 6 Applicant must be informed about the ground of public policy, security, health

for which he is refused a permitArticle 7 There must be an official notificationArticles 8,9 Legal remedies against such a decision: general judicial review is sufficient. An

independent, competent authority must hear the defence of the worker

Royer, case 48/75 If a decision (e.g. to deport) was executed immediately, and not suspended pending appeal, the guarantee would be illusory: person would be deprived of making use of the remedies in Directive 64/221. There must be an opportunity to lodge an appeal and obtain a stay of the execution of the decision.

However…Pecastaing, case 98/79 If it is possible for the applicant to obtain a fair hearing and to have an adequate defence presented, the foreigner need not be allowed to remain in the country during the appeal.

Yiadom, case C-357/98 Facts: Y was admitted to the UK many month before the decision prohibiting entry was issued.Held: Measure determining Y’s situation can’t be classified as a ‘decision concerning entry’ under Art 8. Y therefore entitled to the enhanced procedural safeguards under Art 9. Once UK accepted the physical presence of Y for a period manifestly longer than required for the issuance of a decision prohibiting entry, it can also accept Y’s presence for the time needed to exercise right of appeal under Article 9.


EU LAW I – Prof. De Mestral Fall 200417. EQUAL PAY OF MEN AND WOMEN

Treaty Article 141 establishes the principle of equal pay for women and men. It also imposes on the Commission the obligation to adopt measures in the area of equal opportunities between the sexes, and equal treatment of women and men at work. The principle of equal treatment has gradually developed through legislation, judicial action, Treaty amendment, policy change. Charter on Fundamental Rights contains provisions in relation to gender equality. EC sex-discrimination law:

equal pay equal treatment social security

Main EC Treaty articles relating to EU social policy are articles 136-148:- improvement of working conditions, living standard of workers- equality between men and women on the labour market and at work

Elimination of sex discrimination (equal treatment) was held to be one of the fundamental personal human rights protected under Community law (P.v.S. case C-13/94; Schroeder case C-50/96). However, the principle was held to not be directly applicable against member states, and requires legislative implementation: Defrenne III case 149/77. Thus, states were only obliged to assure equal pay.

There are two opposing views regarding the purpose of this principle: (1) initially, economic: to liberalize the market and further the creation of a single entity in Europe and to ensure that that employers in no one Member State would have a competitive advantage over those in another Member State from not respecting this principle; (2) in the context of an overall emphasis on fundamental human rights, the Court has moved towards focusing on the social aim of the principle.

Art 141 EC 1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.2. For the purpose of this Article, ‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment from his employer.Equal pay without discrimination based on sex means:(a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;(b) that pay for work at time rates shall be the same for the same job.3. The Council, acting in accordance with the procedure referred to in Article 251, and after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle or equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value.4. With a view to ensuring full equality in practise between men and women in working life, the principle of equal treatment shall both prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the under-represented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers.

Defrenne v. Sabena,1976, case 43/75 Art 141 pursues a double aim: 1) to avoid situations in which undertakings established in states which have actually implemented the principle of equal pay suffer a competitive disadvantage; and 2) to fulfil a social objective of the Community: ensure social progress and seek constant improvement of living and working conditions of the peoples of the Union.



Schroeder, 2000, case C-50/96 There was a danger that the equal pay principle would be applied retroactively in Germany, so that part-time workers had access to the pension scheme, which would harm employers.Held: If there is a conflict between the economic (ensuring equal conditions for competing employers) and social (ensuring fairness to individual women and men) aims of Article 141, the social aim takes precedence. The right not to be discriminated against on sex grounds is a fundamental human right.


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