Transcript Four Freedoms

Four Freedoms
Dubrovnik, 4 June 2009
Goods
• Two way street, access to Community market for Croatian products
and access for Community products to Croatian market
• Articles 23-25 Customs union – most obvious forms of
protectionism occur through customs duties/charges having
equivalent effect (charges made on goods crossing a border)
• Articles 90-93 Discriminatory tax provisions (internal fiscal policies
of States)
• Articles 28-31 Imposition of quotas or measures having equivalent
effect
EC Treaty rules
• 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 Exceptions
-an exhaustive list of grounds for derogations: public morality, public
policy: public security; protection of health and life of humans, animals or
plants; protection of national treasures possessing artistic, historic or
archaeological value; Provided restrictions are not discriminatory or a
disguised restriction on trade between Member States
Goods
Dassonville (Case 8/74): Measures having an effect equivalent to
quantitative restrictions
« All trading rules enacted by Member States which are capable of
hindering , directly or indirectly, actually or potentially, intraCommunity trade are to be considered as measures having an
effect equivalent to quantitative restriction ».
Cassis de Dijon (Case 120/78): Principle of mutual recognition
No Member State may prohibit the sale of a product lawfully
manufactured or placed on the market in another MS, even if this
product is manufactured according to technical or qualitative rules
which are different from the rules which it imposes for its own
products
Goods
In other words: products lawfully manufactured or placed
on the market in one Member State must be recognised in
another Member States.
Examples from cases:
German purity law for beer: rules banning additives in
beer/”bier” (public health/consumer protection)
Cheese must have a prescribed minimum fat content
Margarine must be sold in cubic packaging so as to
distinguish it from butter
Government schemes to favour domestically produced
goods over imports
Exceptions/mandatory requirements
Restrictions imposed by the importing Member State may not infringe
Community law if they are justified by one of the Article 30 exceptions or
by the mandatory requirements recognised by the European Court of
Justice.
Article 30 EC - an exhaustive list of derogations: public morality, public
policy: public security; protection of health and life of humans, animals or
plants; protection of national treasures possessing artistic, historic or
archaeological value; protection of industrial and commercial property.
Mandatory requirements - non-exhaustive list (but only to be applied
where rules not discriminatory): fairness of commercial transactions and
consumer protection, improvement of working conditions, protection of
the environment.
The principles of necessity and proportionality also apply.
General rule
• The importation and marketing of products lawfully
produced and marketed in another MS may only be
restricted, in the absence of harmonization, by such
national measures where they are necessary in
order to satisfy mandatory requirements or
derogations provided for by Article 30EC, are
proportionate to the desired objective and the
means of achieving that objective which least
hinders trade.
• Burden of proof rests on the MS imposing
restrictions.
Case law refined
ECJ case law was re-examined in Keck following the increasing
tendency of traders to invoke Article 28 as a means of challenging
any rule whose effect was to limit their commercial freedom even
when such rules were not aimed at products from other Member
States.
In Keck, the traders were prosecuted for selling below cost, an
activity outlawed in France at the retail (not wholesale) level. Other
cases included “Sunday trading” cases.
In Keck, the Court considered that “selling arrangements” were
outside Article 28 so long as they applied to all traders in the
national territory and so long as they affected in the same manner
in law and in fact the marketing of domestic products and imported
products.
Other
• Note, if full harmonisation at Community level, no
defences available under Article 30.
• Commission has developed new approach directives
restricted to essential health and safety standards (e.g.
toys, construction products, medical devices etc.).
• Various legislative measures now include obligations to
notify Commission prior to adopting national measures
that would affect free movement (Directive 98/34,
Decision 3052/95, Regulation 2679/98).
• CE marking and standardisation bodies (CEN, CENELEC,
ETSI) and notified bodies.
Persons
The right to free movement means that every EU citizen is entitled
to travel freely around the Member States of the European Union
and to settle anywhere within the EU (Article 18 EC).
Directive 2004/38 consolidates updates and replaces most
legislation governing rights of movement and residence of all
previous categories of persons enjoying such rights (workers, self
employed, students, etc) under the title of “citizens”.
Most significant judicial development of the concept of citizenship
thus far has been the interpretation of Article 12 (non
discrimination) and 18 of the Treaty in such a way as to extend the
entitlement of EU nationals in host MS to equal treatment in access
to various social benefits.
Freedom under Schengen
Since the Schengen acquis was integrated into Community law, the
concept of “free movement” is used in two senses:
- in the traditional sense of free movement for EU citizens, i.e. the
right to enter, stay and remain in another Member State;
- in the sense of anyone being able to cross the internal borders
without undergoing checks.
However, not all EU Member States participate fully in the
Schengen arrangements and so it is not possible to travel across all
EU internal borders without undergoing checks.
The Schengen provisions were not intended to regulate the right to
long-term residence and work, neither for EU citizens nor for thirdcountry nationals.
Article 39 - free movement of workers
• “Freedom of movement of workers shall be
secured within the Community” Article 39.
• Rights, subject to justifications on the grounds of
public policy, public security or public health.
• Court has gone beyond merely prohibiting direct
or indirect discrimination on the basis of
nationality and ruled that Article 39 applies to
any obstacles that impede the free movement of
workers (see Walrave and Koch, Bosman,
Angonese).
Capital and payments - Articles 56-60
• Radically altered by TEU
• “…all restrictions on the movement of capital between
MS and between MS and third countries shall be
prohibited” Article 56(1)
• “…all restrictions on payments between Member
States and between MS and third countries shall be
prohibited” Article 56(2)
• Sanz de Lera ECJ notes that Article 56 has direct effect
– a clear and unconditional prohibition for which no
implementing measures are required – so can be relied
on by individuals against State as well as against private
individuals
Examples
• For citizens, free movement of capital means the
ability to do many operations abroad, as diverse
as opening bank accounts, buying shares in nondomestic companies, investing where the best
return is, and purchasing real estate.
• National rules prohibiting the creating of
mortgage in a foreign currency was in breach of
Article 56 Westdeutsche Landesbank
• Restrictions on the acquisition and disposal of
property (via prior administrative authorisation)
were proscribed Konle v Austrian Republic
Exceptions Article 58
• MS may apply provisions of their tax law which
distinguish between taxpayers who are not in the same
situation with regard to place of residence or to place
where capital is invested - Article 58(1)(a).
• MS may take measures to prevent infringements of
national law in particular in the field of taxation and
the prudential supervision of financial institutions or to
lay down procedures for capital movement
declarations for administrative or statistical purposes Article 58(1)(b).
• but no arbitrary discrimination or disguised restrictions
on trade - Article 58(3).
Exceptions in Articles 59 and 60
• Council can take safeguard measures with
regard to third countries in exceptional
circumstances where movements of capital to
or from third countries cause or threaten to
cause serious difficulties for EMU
• Unilateral actions may be taken against third
countries by a MS in cases of serious political
reasons and on grounds of urgency
Exceptions
Examples
• Scientology International – national French law requiring
prior authorisation for capital investments that threatened
public policy or security, could fall within Article 58(1)(b)
exception. However, the particular French rule was too
vague (did not specify the details of the threat).
• Commission v Belgium – a national rule vesting the
Government with a “golden share” in gas and electricity
companies allowing it to control later dispositions of
strategic assets was justified under Article 58(1)(b) because
it guaranteed energy supplies in event of a crisis and so
within public security
Services/Establishment
• Articles 43-48 EC on freedom of establishment
require the removal of restrictions on the right of
individuals and companies to maintain a
permanent or settled place of business in a
Member State.
– Establishment is defined as “the actual pursuit of an
economic activity through a fixed establishment in
another Member State for an indefinite period”
• Articles 49-55 EC of the free movement of
services require the removal of restrictions on the
provision of services between Member States
whenever a cross border element is present.
Establishment v services
• Not the mere existence of an office in a MS but
rather the temporary or permanent nature of the
economic activities.
• Logic is that services across a border are generally
already subject to the law of the providing MS.
• Abuse or evasion theory: if you direct most or all
services at the territory of a MS but maintain
establishment in another “in order to evade its
professional rules” in certain circumstances, that
person may be treated as established and so fall
within Article 43 rather than 49.
Lawyer establishment cases
– Reyners, Dutch lawyer with Belgian qualifications refused access to Belgian Bar
on grounds of nationality 1974
– Thieffry, Belgian lawyer whose Belgian qualifications were recognised by
French University in France was refused admission to training stage on the
basis that he lacked a French degree (no justification allowed for such refusal)
1977
– Klopp, German lawyer refused admission to Paris bar on basis that he already
maintained an office in another MS contrary to French rules 1984
– Vlassopoulou a Greek national with Greek law degree who had practiced
German law in Germany for years, applied to Bar, was refused on basis that
lacked the necessary qualifications (no German bar exams). Court held that
authority must examine whether existing qualifications were equivalent.
– Gebhard, a German national against whom the Milan Bar took disciplinary
proceedings for pursuing activity as avvocato in Italy on a permanent basis
(without qualifications being recognised or admitted to Bar) 1995
For a national measure to survive…
• National measures liable to hinder or to make
less attractive the exercise of fundamental
freedoms guaranteed by the Treaty must fulfill 4
conditions:
– They must be applied in a non discriminatory manner
– They must be justified by imperative requirements in
the general interest
– They must be suitable for attaining the objective
pursued
– And they must not go beyond what is necessary in
order to attain it
Services
• Will not apply to purely internal situations (but see
DeLiege where Belgian judo player challenged Belgian
selection rules – not excluded from doing so by lack of
cross border basis, competitions in other MS, etc.)
• Kohll, requirement to get prior authorisation from
social security institution was an unjustified restriction
• Watts – patient goes to another MS and pays for
treatment, then claims reimbursement under NHS,
Court considers this is a service under Article 49
• Humbel – Court considered that state funded
education fell outside Article 49
Harmonising legislation
• Two important general pieces of secondary
legislation dealing with services and
establishment were adopted in 2005 an 2006;
– a consolidating Directive on the recognitition of
professional qualifications which replace most of
the previous and general sectoral legislation on
this issue (Directive 2005/36/EC), and
– a general Directive on Services in the internal
market (Directive 2006/123/EC).
Services Directive
• Covers both temporary service provision as well
as freedom of establishment
• Retreat from “country of origin” for services to
“country of destination”
• Points of single contact to be established
• Series of exclusions of particular kinds of services
(negotiated out by EP)
• Shorter list of mandatory requirements in Article
16 than ECJ has accepted but will the Court
continue to allow the longer set of objective
justifications?