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Summary EU Law, Nigel Foster

International and European Law (Maastricht University)

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Summary: European Law


EU Law & Directions (N. Foster, 2nd Edition)
Period 5
By: Nathalie Stroobants

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Chapter 2: The Union Institutions

The Union Institutions

• Art.13 TEU (and subsequently TFEU): Unionʼs institutions are 7, the EP, European
Council, Council, Commission, Court of Justice, ECB, Court of Auditors
o They shall act within the limits of the power conferred
• Art. 13(4) TFEU: two advisory bodies  European Economic and Social Committee
(EESC) and Committee of the Regions (COR)
• + Committee of Permanent Representation, European Investment Bank, European
System of Central Banks

 The European Commission

• Executive administration (not a government), mostly it is a federal body


• Formulate policy within the parameters of the agreed areas
o They have the sole right to initiate legislation
• Own power of decision
• Enact administrative legislation under powers delegated to it by the Council of
Ministers

• Composition:
o Art. 17 TEU and 244-250 TFEU
o Consists of 27 members until 2014 (after that maybe a reduction to 2/3
depending in Ireland)
o Art. 17 (3) TEU and 245 TFEU: complete independence in performance of
their duties, no instructions by local governments is allowed
o Most of the work is covered or generated by EU legislation and carried out by
the national agencies (particularly CAP)

• Appointment
o Commission President is considered and proposed by a QMV by the
European Council to the EP (Art. 17 (7) TEU)
o Subject to approval by EP by majority voting
o Commission President elected + member states in the Council: jointly propose
other Commissioners
o High Representative (Commission member and Vice President Art. 18(4)
TEU)  selected independently by European Council by QMV (Art.18 (1)
TEU)
o Commission subject to the approval of the EP en bloc, rejection of a single
Commissioner is impossible (its either all of them or no one)
o Renewable period of five years (Art.17 (3) TEU), number of Vice Presidents is
not specified Art.17 (6) TEU

• Removal
o Can be done with a vote of censure by the EP, only collectively (Art. 17 (8)
TEU and 245 TFEU)
o Until replacement, the old Commission stays (obviously)

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o One Commissioner can be removed for serious misconduct  Art. 247 TFEU
for the ECJ on application by the Council and simple majority voting of the
Commission (not EP)
o Art. 17 (6) TEU a member of the Commission shall resign if requested by the
President

• Tasks and duties


o Art. 17 TEU  promotion of general interests of the Union
o Guardian or watchdog of the Communities (ensure provisions of the Treaty
and measures taken by institutions)
o Bring claims before of the ECJ for breaches of member states (Art. 258
TFEU), other institutions (Art. 263) and individuals
o Formulates/ proposes policy initiatives and legislative proposals and is the
main initiator of legislation Art.17 (2) TEU
 Council (Art. 241 TEU)
 EP (Art. 225 TFEU)
 1 Mio Citizens request Commission (Art. 11 and 21 TEU)
o Limited powers of independent decision-making: only participation in Council
and EP procedure
o Implementation of rules, executive
o External representation, negotiation of international agreements Art. 207 and
218 TFEU
o Play part in drawing up annual budget (Art. 314-1316 TFEU) and its
implementation (Art. 317-319 TFEU)
o Decision making: collectively by majority (Art.250 TFEU)
o Competition policy, CAP, Common Customs, representation in GATT and
WTO

This institution is regarded as one of the principle ones of the EU, as it represents the
interests of the Union as a whole and can propose new laws, thus, it is the only organ of the
union with legislative initiative powers. It is composed of 27 commissioners that represent
each of the member states, and each of these commissioners is assigned a specific task
focusing on a specific policy area by the President of the Commission. They also manage the
budget of the union and allocate the necessary funds on each area, and most importantly,
they represent the European Union in an international aspect, as they are in charge of
negotiating agreements with other foreign countries.

The Council of Ministers / The Council of the EU

• Meeting 90 occasions each year


• Main legislative organ
• Tasks and functions outlined by Art. 16 TEU and Art. 237-243 TFEU
• Representative ministers depending on subject matters and discussion (i.e. if the
topic is about agriculture, then the ministers at the meeting are all the Ministers for
Agriculture of each country)
• Art. 236 TFEU: EC decides configuration and Presidencies of the Council
• Appointment  Art. 17 (7) TEU

• Function and Powers


o Art. 16 (1): carry out policy-making and coordination of functions
o With EP: legislative and budgetary functions
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o Take decisions and delegate them to the Commission (Art.290 TFEU)


o Ordinary legislative procedure (Art.289 TFEU)
o Budget Art. 314 TFEU

• Presidency
o Each of the member states in turn for a period of 6 months (Art. 16 (9) TEU
and 236 TFEU)
o Troika: 18-months rolling Council governance to provide continuity but each
can still outline priorities

• Role and voting in legislative procedure


o Deciding and enacting secondary legislation
o Co-decision-procedure with EP depending on provision

• Forms of voting
o Unanimity: Required in Art. 19 TFEU: Council enact measures outlawing
different forms of discrimination; in common foreign policy and security policy
and policing (intergovernmental), taxation, social security, budget
o Simple Majority Voting: only for 8 Art of the TFEU, Art. 238: simple majority
 Council shall act by a majority of its component members, not politically
accepted
o QMV: 12 more occasion since the SEA; 30 in TEU, 47 since Amsterdam and
Nice Treaty Art. 16 (3): QMV except where the Treaty provision states
otherwise (most common method), figures in Protocol 30 in Transitional
Provisons
 QMV with 27 members: 255 votes (73,91%) from possible 345
 Blocking minority 91 votes will prevent proposal
 2/3 in favor of the Council proposal, 62% of the population (55 % from
2017 on)
 In Art. 16 EU, 238 TFEU, Protocol 36 on Transitional Provisions
 Declaration No.7: member states whose QMV is no sufficient for
blocking minority can ask Council to continue to discuss the issues
until a satisfactory solution is reached
 2014-2017 Art.205 EC: 55% of Council members  15 states, 65% of
the population; not an act from Commission or HR: 72% of the Council
members

• General law making powers


o Art.113 TFEU: special legislative procedure for harmonization of legislation,
exercise duties and other forms of indirect taxes (VAT)
o Art. 114 TFEU: QMV on a proposal about the establishment and functioning of
the internal market
o Art.115 TFEU: approximation of law no catered for by any of the specific parts
of the Treaty  unanimity
o Art. 352 TFEU: Council can enact measures to attain objectives of the Union

• COREPER and Council Secretariat


o COREPER: representatives of member states (civil servants); Art. 16 (7) and
240(2) TFEU, reduce workload, oversees
o Art. 240 (2) TFEU: permanent Council Secretariat, mundane work of the
Council, organization, preparation, assists EC (Art. 234 (4) TFEU)

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This Council is informally known as the Council of Ministers, and it represents the
governments of each member state. It considered to be the main legislative organ of the
Union, and it composed of one minister from each member state that vary depending on the
topic being discussed (i.e. if the topic to be discussed is about Foreign Relations, then the
representing minister of each state will that of Foreign Relations). The functions of the EU
Council ranges from passing new laws (originally proposed by the commission), signing
agreements between the EU and other world states, approving the annual budget proposed
by Parliament, developing the EUʼs foreign policies, etc. The council is also in charge of
leading the Common Foreign and Security Policy

The European Council (EC)


• Lisbon Treaty: full Union Institution
• 27 head of states and governments, European President + President of Commission
(Art.15 (2) TEU) + stateʼs ministers and assistant to Commission President (Art. 15
(3) TEU)
• Discuss matters outside the formal scope of the Community Treaties (integration,
international crisis)
• Art.2 SEA: EC on a legal basis, formalized European political cooperation in the areas
of foreign policy consultation and monetary cooperation
• Art. 4 TEU: EC shall provide Union with necessary impetus for its development and
shall define general political guidelines (Art.15 (1) TEU)
• Legislative functions excluded
• 2 meetings in 6 months
• Unanimity and QMV
• Appoints by QMV (Art. 18 TEU), the composition of the EP and the membership are
voted by unanimity (Art. 14(2) TEU, 17(5) TEU and 244 TFEU)
• European Council President
o European President
o By EC with QMV for 2 ½ years, renewable once
o Current President: Herman Van Rompuy (Belgium)
o Independence (Art. 15 (6) TEU)
o Chairs EC: organization of its work in cooperation with Commission
o Obtain consensus by the EC and report it to the EP after each meeting (Art.
15 (6) TEU

European Parliament (EP)


• Direct elections in 1979
• Governed by Art. 14 TEU and 223-234 TFEU

• Membership
o Lisbon Treaty  number of members 750 (Art. 14 (2) TEU)
o MEPʼs serve electorate in constituencies, cross border political groupings
o Seven groups (p. 55 Foster)
o 736 MEPʼs

• Legislative powers
o Before SEA: advisory and consultative powers only
o Cooperation procedure was removed by Lisbon Treaty

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o Art. 14 (1) TEU: EP jointly exercises legislative and budgetary functions with
the Council  co-decision procedure most widely used (40 instances since
Lisbon)
o “Ordinary legislative procedure” Art. 289 and 294 TFEU, 90% of the law-
making
o EP consent to accession of members, associate agreements, the ECHR and
international agreements (Art. 49 TEU and 218 TFEU)

• Control of the executive


• Appointment
o Amsterdam: President of the Commission nominated by the member states is
first approved by EP
o Commission is subject to approval by EP (Art.17 (7) TEU)
o 2004: EP objected the nomination of a single Commissioner under Barroso
• Censure/ removal
o Power to censure Commission
o Art. 17 (8) TEU and 234 TFEU: 2/3 vote of majority of the members needed to
censure Commission entirely (not individual Commissioners)
o Set up a Committee of Inquiry to investigate the alleged
contravention/maladministration in the implementation of Union law (Art. 226
TFEU)
o Question (orally/writing) the Commission under Art. 230 TFEU
o Discuss Commissionʼs annual general reports (Art. 233 TFEU)
o Request Commission to submit proposal which the EP considers necessary
for the implementation of the EC Treaty (Art. 225 TFEU)
• Budgetary powers
o Final say over (non) compulsory expenditure
o Budgetary Treaty 1975: can reject the budget entirely (Art. 314 TEFU)
o Democratic legitimacy through direct elections
o EP can discharge the Commissionʼs implementation of the budget on an
annual basis
o Lisbon Treaty: full parity of the Council and EP in adopting the budget
• Right to litigate
o EP is able to bring an action against the other institutions under art. 265 TFEU
if institutions failed to act as required by their duty
o No a general right to challenge legislative acts under 263 TFEU only the right
to take action to protect its own prerogative powers
o Acts of the Parliament which are legally binding can be challenged under Art.
263 TFEU
o Art. 263 and 265 TFEU: acts or omissions of the EP can be challenged
o Treaty of Nice: express confirmation that the EP is one of the privileged
applicants to challenge other institutions (263 TFEU) without any restrictions
in its locus standi
o Art. 227 TFEU: right of Union citizenship to petition EP and the right of citizens
to complain to Parliamentary Commissioner

The European Court of Justice (ECJ)


• Court of Justice + General Court (former Court of First Instance)+ Judical Panels (Art.
19 (1) TEU and 257 TFEU)
• Self-standing independent court, no hierarchy relationship with national courts as in a
system of appeal
• Art. 19 (1)

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o Interpretation and application of Treaties


o Law observed
o Provide sufficient remedies to ensure efficient legal protection (Lisbon Treaty)
• Competition and organization
o 27 judges for each member states (2007)
o 8 Advocates general (art. 252 TFEU)
o Nominated /appointed by unanimous agreement by governments of the
member states
o Independence beyond doubt, possession of qualifications necessary for
appointment to the highest judicial office in their own countries (or from
academic lawyer)
o Art. 253-254 TFEU
o Can sit as full court, grand chamber (13 judges, cases involving member
states or Union institutions), Chamber (3 or 5 judges)
o Art. 251 TFEU: reduces occasion when the Court may nee dto sit in plenary
session and which is now when a member state or a Union institution, as
party to an action request plenary jurisdiction
o Declaration (No. 38) increase of AGʼs if requested
o Germany, France, Italy, Spain and UK: permanent AGʼs
• Procedure
o Cases arise ad hoc from member states
o 23 official languages
o Internal language: French
o Protocol on the Statute of the Court of Justice and by its Rules of Procedure
o 4 stages to proceedings
 Written proceedings
 Investigation and preparatory work
 Oral proceedings, incl. AGʼs opinion (can be omitted)
 Judgment (deliberation secret in French) in a single ruling
o Art.2 Statute of the Court: before taking office, judges taken an oath to
preserve the secrecy of the Courtʼs deliberation
o Single opinion supports authority (terse, cryptic judgments, little evidence of
reasoning)
o AGʼs which is to assist the Court by giving an opinion (not binding, but
weighty)
o Art. 20 Statute of the Court: case determined without submission from the AG
o Art. 62 a of the Statute Art. 104 of the Rules of Procedure: interventions can
be refused to render judgment in less time than 6 months
• The forms of judgment
o Report drafted in first language of the case
o Full report, brief summary of judgment, report by Judge Rapporteur containing
facts and procedure, summary of arguments, opinion of AGʼs
• The reporting of cases
o European Court Reports (ECR)
o In all official languages
o 2003: electronically
• Jurisdiction
o Art. 19 TFEU Court of Justice, General Court and specialized courts shall
ensure the interpretation and application of the Treaty law is observed
o Factual jurisdiction  Art. 19 (3) and 256 and 279
o Geographic jurisdiction: only member states
o Jurisdiction under the EEA Treaty (interpretations on disputed rules

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o Art. 218 (11) other institutions/member states may obtain the opinion of the
Court of Justice in compatibility of proposed international agreements (with
TEU and TFEU)
o Art. 275 TFEU: excludes jurisdiction over Common Foreign and Security
Policy (except compliance monitoring under Art. 40 TEU and 263 TFEU)#
o Art. 276: excludes jurisdiction over police and law enforcement agency
• Division of Jurisdiction
o Actions against member states (Art. 258 TFEU)
o Actions concerned with the review of acts of the Unionʼs institutions (Art. 263
TFEU)
o Preliminary rulings under 276 TFEU
o Interim measures and appeal from General Court out of divison
o Constitutional Court: powers between institutions and member states
o Administrative court: judicial review of acts of the institutions
o Appeal court
o Direct judicial control: Court interprets a rule and applies it to decide the case
itself
o Indirect judicial control: Court interprets rules on validity of provisions, not the
subject of an action before the Court
• Direct actions
o = contentious jurisdiction of the Court: court upholds the lawful exercise of the
Union legislative and executive powers in action against the Union institutions
under Art. 263-5 TFEU, concerning judicial review
o Uphold compliance of the Unionʼs obligations (258-60 TEU)
o Conformity with EU law by individuals
o Preventive judicial control intended to block the conclusion of an envisaged
agreement by the Union with a third state or international organization
considered incompatible with the TFEU under Art. 218
o Art. 277 TFEU: Court of Justice hear indirect challenges to Union legislation in
proceedings already taking place before the Court of Justice
• Indirect actions
o Exercised by the preliminary ruling proceedings of Art. 267 TFEU
• Interpretation
o Engage expansive interpretation of the texts
o Pro-active role in times of European Integration
o Treaty of Amsterdam: UK government report seeking to curb the activity of the
Court of justice (outvoted)
o Result as being highly instrumental in European integration and in cornfirming
the constitutional basis of the Union
o Often refers to the spirit of the treaty (preamble and general provisions of 3-6
Teu and 18 TFEU)
o Concept of effet utile: useful effect of Union law which would be undermined if
a particular provision was not interpreted in a more expansive way
o Francovich v. Italy: establishment of liability on the part of the member state
could never have been derived from a literal reading of the treaty or secondary
law
o Logical, literal, purposive interpretation
o Historic intend
• Precedent
o Tries to maintain consistency in its judgments
o Past decisions: persuasive authority
o Certain decisions from a precedent for national courts

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o Van Gend en Loos and Cost v ENEL: higher, authoritative status than other
cases
o Case law system: relying on precedents
The General Court (Court of First Instance CFI
• Growing case load, long delay
• 1968 SEA set up the Court governed by Art. 256 TFEU
• Lisbon Treaty: General Court
• 27 judges, can act as AG in complex cases
• Chambers of 3 to 5 judges
• Grand Chamber: 13 judges or full court
• Art. 50 of the Statute: also single judges
• Expanded to any area of jurisdiction
• Also direct actions under Art. 263 but only annulment applications by natural and
legal persons and the member states and not the Union institutions
• 267 TFEU: preliminary references (unless there is a risk to the unity of Community
law  then Court of Justice)
• 256 TFEU: future changes of jurisdiction, to hear appeal from judicial panels
• Appeal to the Court of justice
o Lack of competence of the court
o Breach of procedure
o Infringement of a Union provision or rule of law by the Court/ error in the
interpretation or application of law
• Length of proceedings
o Still increase in cases and cases that have to be referred to the Court of
Justice
o Increasing jurisdiction of the CFI
• Specialized Courts (Judicial Panels)
o Calles SC since Lisbon Treaty
o Judges appointed by the Council and acting unanimously (257 TFEU)
o First instance Court with appeal to the General Court

ECB European Central Bank


• Achieve price stability
• Regulating interest rates in the Eurozone
• Governed by Art. 13 TEU, Art. 282-284 TFEU

Court of Auditors
• Art. 13 TEU, 285-287 TFEU
• Est. 1975 by the Budgetary Treaty and audits the expenditure of the institutions for
legally and sound financial management
• Annual report forwarded to the EP
• Provide Commission with a discharge if the expenditure is correct (Art. 319 TFEU)
• 263 TFEU: can take actions to protect its prerogatives in judicial review actions
against the Acts of the main legislative institutions

The Economic and Social Committee (EESC)


• Advisory role to represent various sectional interests and must be consulted for the
adoption of certain legislation as determined by the Treaty
• Opinion may be ignored by the Court
• Failure to consult would open up the legislation enacted to annulment (Art. 263
TFEU)
• Voting QMV
• Give opinions on their own initiatives without invitation from the Council

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The Committee of Regions


• Advisory body to represent regional and local bodies (important for federal states)
• Since TEU

Other Union Bodies


• European Investman Bank (308 TEU) to channel funding in European projects
• Economic and Financial Committee to adivse the Council and Commission on internal
market coordination matter (134 TFEU)
• Political and Security Committee to advice the Council and Foreign Minister on
international situations (38 TEU)

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Chapter 3: Transfer of Powers


Introduction
• In order to have competence, EU need s to have power transferred to it
• Division of competences and principle of subsidiarity are political solutions to the
emotive questions about how power is shared btw. the Union and member states
• Subsidiarity is a way of of deciding how to determine where the line between Union
and member states `competences should be drawn

Relationship btw. transfer, competence and supremacy


• Treaties do not provide a clear-cut expression of the relationship btw. the law of the
EU and national laws or domestic laws
• Question of supremacy was settled by the Court of Justice  in order for union law to
be supreme

Transfer of sovereign powers


• When union was established member states needed to transfer some sovereign right
to the Union  facilitated by the member states providing the competences for the
Communities to make their own laws
• Process was acknowledged by Van Gend en Loos with provisio that the powers
transfer or transfer of sovereignty was carried out only within limited fields and was
not a general transfer of power
• Some movement of a transfer of revising powers has been incorporated into the
Union by the Lisbon Treaty  Article 48 TEU has been amended to provide forms of
revision powers for the Treaties
• Any power the communities and union have provided is only there by virtue of the
transfer by the member states
• Member states decide whether the competences of the Union should be increased at
all

The division of competences


• Transfer of powers and competences should in theory be a clear-cut process
whereby any exercise of these powers by the institutions of the Union can only be
within the terms granted by the member states and contained and clearly set out in
the Treaties
• Nothing should be done by the Union institutions which is not expressly permitted by
the Treaties
• What is attributed to the Union by the member states is necessarily removed from
member states ʻcompetence
• Principle of conferred competence: Article 1 and 5 TEU

Express policies, powers and legal base


• Range of actions to be undertaken by the Union are now set out in Article 3 TEU & 3-
6 TFEU  list the objectives and activities of the Communities but do not specifically
detail any of them
• Where the treaty specifies a particular object , it invariably provides a power to
achieve that object  may be expressed through concept of express policies, powers
and legal base
• Express policies are objectives outlined in the Treaties, the power to achieve them
and thus simultaneously the legal base for secondary EU law to achieve the
objectives will also be provided within a Treaty Article
o E.g. Articles 45 and 46 set out respectively the objective and power of
achieving the free movement of workers in the Union
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The split between exclusive and concurrent competences


• Initial expectation was that integration in one area was expected to spread to other
areas and that powers would be needed to regulate those new areas
• It was anticipated that competences and their division needed to be dynamic and
equally evolving and not static
• Competence creep: slow assumption of competences by the Commission to carry out
the policies of the Union; power to do so is not expressively granted by the member
states
• Competences are divided into exclusive and concurrent competences

Exclusive competences
• Union enjoys exclusive competences in a few areas only
o Commercial policy to third countries
o Parts of the common fishing policy
o Article 3 TFEU
 Include customs union
 Competition policy for the internal market
 Monetary policy for the Eurozone
 Parts of common fisheries policy
 Commercial policy

Concurrent competences
• in most areas the dividing line is not clear and competence is concurrent between the
member states and the Union
• areas are set out in Article 4 TFEU
o internal market
o social policy
o economic, social and territorial cohesion
o agriculture and fisheries, excluding the conservation of marine biological
resources
o environment
o consumer protection
o transport
o trans-european networks
o energy
o area of freedom, security and justice
o common safety concerns in public health matters

Complementary competences
• areas of law outside those exclusive and concurrent competences remain the
competence of member states
• Union may support member state`s activities in these areas  Article 6 TFEU
o Union shall have competence to carry out actions to support, coordinate or
supplement the actions of the Member States
 Protection and improvement of human health
 Industry
 Culture
 Tourism
 Education, vocational training, youth and sport
 Civil protection
 Administrative cooperation
• In area of shared competences most difficulties arise
• Degree of sharing alters according to the subject matter

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• Assumption of competence is known as “pre-emption”


• Cassis de Dijon case: only where the Community has not acted, could the member
states act independently and even then, if concerned with a general area, the
member states could act only within prescribed limits

Extension of competences
• Only way to add competences to a specific created intl. organization is by all
signatories to the Treaty to agree to Treaty amendment

Express by Treaty amendment


• Deliberate and clear-cut-the first
• Areas of Union competence have expanded greatly as a result of the member states
assigning additional competences to the Union with successive Treaties adding
• Second and third ways are not express  led to the use of the term “competence
creep”
o Due to the use of implied and general powers by the institutions, notably the
Commission
Implied powers
• Second means of extending competences
• Recognized by the Court of Justice in cases dealing with both internal and external
powers of the Comission where, in the absence of express powers in the Treaty,
powers are nevertheless required to achieve a Union goal, and are thus implied
• Implied powers to carry out internal competences can be used to support external
powers

Internal implied competences


• Comission v. Germany

Impact on external competence from internal competences


• Where existed internal powers have been acted upon by the EU, member states are
also prevented from acting externally in those areas where action would impact on
internal policy
• Union alone is in position to carry out contractual obligations towards 3rd countries
• Commission v. Counicl (ERTA)
• Commission v. Finland
• Most complex agreements are the multilateral trade liberalization agreements carried
out by the member states of the organizations of GATT and the WTO

Residual Powers
• Third way by which competences have been expanded
Specific
• Specific residual powers are those which grant subsidiary law-making powers to
complete goals in specific areas such as Article 115 and 114 TFEU
o Article 115 is an exception to powers granted in 114
• Action can be taken outside of the express and exclusive granting of powers to the
Union by a majority and not by the agreement of all of the member states
General
• General kind of residual power is Article 352 TFEU
o Provides that where in furtherance of any of the objectives of the Treaty
and where no specific power exists, the Union may act by means of the
Council act unanimously with the consent of the EP

Tackling the competence creep

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• Increases in the competences of the EU have been criticized and challenged


• If using Article 115 or 352 TFEU, both requiring unanimity on the part of the
council, they require consultation or consent of the EP only and not its greater
participation in the ordinary legislative procedure
• Challenges before the court of justice to some proposed and completed
Community actions for the Council`s choice of legal base and more formally by
amendments to the Treaties to try to curb this development

Restrictive drafting
• Legal bases have been drafted restrictively so that the Commission cannot use the
base for further legislative intervention
o E.g. 168 (5) TFEU
• Other method outside specific Treaty Article amendments to control and review the
extension and exercise of competences, is the introduction of the principle of
subsidiarity and proportionality

The principle of subsidiarity


• Requires decision to be taken at the most appropriate level and in the EU context this
focuses on whether a decision should be taken at the level of the Union or of the
member states
• Subsidiarity made its first express appearance in the Community legal order by the
1986 SEA Treaty amendments
• Article 1 TEU – decisions are to be taken as closely as possible to the citizen
• Article 5(1) TEU- use of Union competence is governed by the principles of
subsidiarity proportionality
• Article 5(3) TEU- in areas which do not fall within its exclusive competence, the
Union shall act, only if and in so far as the objectives of the proposed action cannot
be sufficiently achieved by the member states but can rather be better achieved by
the Union  not clear!
• Article 5 TEU and principle of subsidiarity build on the principle of conferral
• Article 13 TEU- requires that each institution acts within the limits of powers
conferred on it
• if the matter is one within the exclusive competence of the Union, subsidiarity does
not apply  problem: exclusivity is not clear-cut term
• in order to justify taking the action, the Commission needs to outline why it has
competence to take the particular action and does so in the preamble and recitals to
proposed legislation
• Protocol (No 2) on the application of the principles of subsidiarity and proportionality
• Protocols have Treaty status, Article 51 TEU
• Commission is required to consult widely before formally proposing legislation; draft
legislative acts shall be forwarded to the national parliaments at the same time as to
the EP and Council
• Article 6 and 7 outline the Council members national parliaments`ability to object the
proposal and the procedure how those objections are further considered by the Union
institutions in the legislative process and how the commission must issue a reasoned
opinion if it wishes to maintain the proposal for further consideration in the legislative
process
• Legislative acts may be challenged under Article 263 TFEU for infringing the principle

Challenges for non-compliance with the principle


• Non-compliance has been cited as a ground for annulment under an Article 230
judicial review action before the Court of Justice, for an infringement of as essential
procedural requirement

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• Where an incorrect legal basis is used or where no powers have in fact been
conferred this provides grounds for the annulment of the measure
• Court of Justice will be invited to come up with a clearer and more workable definition

Proportionality
• Contained in Article 5 TEU
• Linked to the subsidiarity principle as both are concerned with the control and
exercise of powers by the institutions
• Treaty definition Article 5 (2): “Under the principle of proportionality, the content and
form of Union action shall not exceed what is necessary to achieve the objectives of
the Treaties”.
• It is subject to Protocol 2
• Union Acts are opten to possible challenges if breaching proportionality
• Lisbon treaty introduced new requirement: Article 296 TFEU – “When considering
draft legislative acts, the EP and the Council shall refrain from adopting acts not
provided for by the relevant legislative procedure in the area in question.”

The participation of the institutions in the legislative and budgetary processes

Legal base for legislative proposals


• Article of Treaties which empower the EU institutions to enact further legislation to
carry out the policies of that title or chapter provide the key to the legislative
procedure which must be used to enact the laws
• Article 59 TFEU – “The European Parliament and Council, acting in accordance with
the ordinary legislative procedure and after consulting the Economic and Social
Committtee shall issue directives”
• Law-making involves the Commission, Council and the EP + sometimes the EESC or
the Committee of the Regions
• Treaty base is then fundamental to the relative powers and ability of the other
institutions to affect the content of Union law
• Use of QMV in the Council of Ministers is extremely important to the Commission
• Measures in support of the single market under Article 114 TFEU require qualified
majority voting rather than unanimity in the Council
• EP has not refrained from challenging the Council for the use of an allegedly incorrect
legal base and regularly brings cases before the Court of Justice
• Two complete changes of Treaty Article numbers  Amsterdam and Lisbon treaty
• View of the Court of Justice is essentially that the democratic process in law-making,
which now involved the EP, demands that where two legal bases are available
requiring different procedures, the one allowing the EP the greater role must be used
so as not to deprive the EP and the Union of its democratic right, unless it can be
shown that the matter is primarily more concerned with a particular Treaty base
• Warning to observe correct legal base is in Article 296 TFEU – “When considering
draft legislative acts, the EP and the Council shall refrain from adopting acts not
provided for by the relevant legislative procedure in the area in question.”

Law-making principles and procedures


• Have been numerous treaties both increasing and complicating legislative procedures
• Treaty of Lisbon has done most, but unfortunately not to the extent originally
proposed by the Constitutional Treaty (CT)
• 3 institutions are involved in law-making
• Before law-making starts the member states decide the overall policy

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The law-making procedures


• Ordinary legislative procedure
• Special legislative procedures
• Consent procedure
• All law-making procedures start with Commission, which puts into effect by means of
preparing and proposing legislative instruments
• Suggestions and recommendations for legislative acts may also come from the EP,
the European Council, the member states, the European Central Bank, the European
Court of Justice, the European Investment Bank and EU citizens  Article 289
• Council and Parliament dispose of these legislative proposals
• Details of procedure vary according to the way the Council votes and the different
form of participation of the EP

The ordinary legislative procedure


• Article 289 TFEU has been amended over the years to provide that the EP act more
extensively with the Council and Commission in the legislative process  introduction
of co-decision making procedure Article 294 TFEU

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Chapter 4: Sources and Forms of EU Law


The EU legal system
• Founding treaties + fundamental rights + general principles + individual style
• TEU, TFEU, Lisbon Treaty  not static body, but amendment from time to time
(SEA, Maastricht, Amsterdam…)
• First members only from civil law countries  EU follows legal structure of
Germany and France ( procedure = French)
• Founding treaties reflect civil country approach
• TEU = general overview treaty
• TFEU = details of the overall policies, broad aims into great detail, but outline for
areas of law that member states agreed on
•  free movement of goods and workers (little secondary legislation), competition
law and agriculture (both extensive secondary legislation)
• Treaties require regulations and directives
• Ambiguity between legislation and interpretation of Treaties and secondary
legislation is resolved by the ECJ
• Case law  internal and external sources (general principles and fundamental
rights)

The style of the EU legal system


• Like civil law system = EU system is deductive (from broad to specific = Treaty
preamble to relevant provison)
• Then secondary legislation and case law + interpretation
• Interpretation techniques of the Court: reference to Preamble and general provisions
to justify a particular decision and apply the law in the scope of the Treaty
• Francovich: argued strongly on the basis of Art. 10 EC to est. for the first time under
community law that states are liable for the failure of the member state to implement
a Directive
• Art. 18 TFEU = general prohibition of discrimination on the grounds of nationality 
used as general tool of the ECJ

The classification of the elements of the EU law


• Three main components
• Institutional law
o = constitutional law of the EU
o Structure of Union, regulation of the main institutions, sources of law (incl.
supremacy and direct effect as principles of EU law), relationship among
institutions, countries and international organizations
o Disputes settled by ECJ
o Court assisted EP in gaining increased litigation rights to reflect its democratic
power
• Procedural Law
o = administrative law
o Incl. action for judicial review by ECJ and actions taken by institutions,
member states, natural and legal persons (Art. 258-260, 263, 265, 267, 277,
340 TFEU)
o Enforcement of rights and remedies against institutions, member states and
individuals
• Substantive law
o establishes legal rules to carry out the broad policy areas of law agreed under
the treaties

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o Largely secondary legislation (takes mostly effect in member states not in the
Union)
o = economic law, Union private law (but concepts vary from country to country)
o Economy topics expanded to social policy, education, culture, public health
and consumer protection

Sources and forms of Community law


• Acquis communitaire = body of EU law
• Connected to Copenhagen Criteria (must accept acquis communitaire in total)
Treaties
• Primary source of Union law
• Of equal standing
• TEU, TFEU, ESCS (not longer in force), EURATOM
• Amended by Merger Treaty, Acts of Accession, SEA, TEU, Amsterdam, Nice, Lisbon
• Language problem is overcome by court through teleological interpretation of the
spirit of the provision
• Direct applicable = treaties become automatically part of the generally binding law of
the member states and citizens
• Self-executing = provisions of law have legal validity in the member states, in that no
further action need be taken by the member states to incorporate or transform the
treaty into the national legal order once it has ratified the treaty (but UK needs
introductory Act)
• Van Gend en Loos: confirmation of the deeper impact of this directly effective
Community law, also legal concern of individuals and not only of member states
• Lay down broad guidelines for the agreed aims and objectives
• No details on implementation ( secondary law, ECJ)
Protocols attached to the Treaties
• Added by successive intergovernmental conferences = complex and vast range of
protocols
• Art. 51 TEU: protocols are integral part of the Treaties
• Complex
• Structure only improved in a limited or half-hearted way
• Constitutional Treaty = simplify + long list of CT protocols
• Lisbon added protocols and made situation even worse
• 37 protocols
Declarations
• In addition to the various protocols, further attached to each subsequent treaty is
usually a list of declarations of the member states
• Sometimes these are by all member states, but usually of just one member state,
which makes a unilateral declaration on a particular matter
• They may alter our view or perception of the meaning or application of Treaty
provisions
• Enjoy no express Treaty status
• Effect very uncertain in EU law
• Lisbon Treaty added further declarations
Secondary legislation
• Arises entirely subject to the authority, higher rank and procedures provided for in the
treaties
• Article 288 TFEU provides the means by which the Union institutions are able to
enact secondary legislation
• Binding sources of law for the member states
• Acts of secondary legislation presently consist of Regulations, Directives and
Decisions

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• All forms of secondary legislation can be both legal acts and the non-legislative acts
• Published in the Official Journal (OJ)
• Published in two main parts with a supplement
o L Series (legislation)
 Contains binding legislative acts
o C Series (information and notice)
 Contains a very wide range of documents which are not binding as
such
• OJ is officially authentic only in its printed form
Regulations
• General provisions of legislation applicable to the entire Union, member states,
institutions and individuals
• Regulations are detailed forms of law so that the law in all member states is exactly
the same
• Regulations are directly applicable or self-executing
• Become legally valid in the member states without any need for implementation on
the date specified or on the 20th day after publication in the OJ (Article 297 TFEU)
• Defined in Article 288 TFEU
• Implementation of a regulation is normally prohibited
Directives
• Binding on those to whom they are addressed
• In practice they are addressed to all member states
• Set out aims which must be achieved but leave the choice of the form and method of
implementation to the member states
• Also defined in Article 288 TFEU
• Enter into force either on the date specified or twenty days after publication (Article
297 TEU)
• Member states are given a period in which to implement Directives which can range
from one year to five or more (two years is usual)
• May contain more than one entry into force date
Decisions
• specific binding and enforceable acts of law which are addressed to member states
or to specific individuals
• also defined in Article 288 TFEU
Other acts producing binding legal effects
• Article 288 TFEU is not exhaustive of the legally binding acts
• Court of Justice can review all measures taken by the institutions
• Such acts need to stem from Article 288 and are often termed ʻsui generisʼ )in a class
of its own)
Recommendations and opinions
• Under article 288 TFEU recommendations and opinions do not have any binding
force
• Case 322/88 Grimaldi: national courts are required to take recommendations into
account when interpreting national law based on community law
• Recommendations often provide a gloss on a Regulation or Directive or extend its
scope of application
Procedural requirements
• Legal acts of institutions shall state the reasons on which they are based and shall
refer to any proposal or opinions which were required to be obtained (Article 296
TFEU)
• Treaty base must be cited also
• Failure will give rise to grounds for judicial review and possible annulment of the
measure under Article 263 TFEU

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• Article 297 TFEU provides the rules concerning the publication of legislative and non-
legislative acts
International agreements and conventions
• The Union has legal personality (Lisbon Treaty)
• Union is usually represented by the European Commission in negotiations
• The express treaty-making powers of the Union can be found in three principal Treaty
Articles
o Article 207 TFEU
 Provides that EU commercial and trade policy is conducted by the
Commission under the authority of the Council
 EU acts as a single actor under this provision
 European Commission negotiates trade agreements and represents
European interest on behalf of the 27 member states
o Article 217 TFEU
 Provides for the conclusion of association agreements with non-
member states which can be regarded as either a precursor to
membership or as an agreement in its own right without any view to
future membership of the EU
o Article 218 TFEU
 Provides for a power for the conclusion of international agreements
with non-member states in matters covered by the areas of the Treaty
not specifically catered for by the other two Treaty Articles mentioned
above
 Article 220 TFEU further requires the Union to maintain appropriate
relations with international organizations such as the UN, the Council
of Europe and the OECD
The Court of Justiceʼs contribution to the sources of law
• There is much scope for judicial creativity on the part of the Court of Justice
• Codified or written law cannot possibly cater for all economic and social
developments that can take place and the judges must at times either adapt existing
rules to fit the situation or introduce new rules to settle the matter judiciously
• Court of Justice has previously determined that the EC Treaty (now TFEU) and
secondary legislation must be interpreted and applied according to the scheme of the
Treaty as a whole and in the light of the Preamble
• There are three principal Treaty Article which provide justification for the Court of
Justice introducing general principles into the EU legal order
o Article 19 TEU
 General guideline set by the Treaty for the functioning of the Court of
Justice
 Has been employed to justify the introduction of very many different
general principles of law, most notably human rights
o Article 263 TEU
 Refers to the infringement of any rule of law relating to the application
of the Treaty as one of the grounds for an action for the challenge to
the validity of EU law
o Article 340 TEU
 Concerned with damages claims against the Union institutions
 Allows the settlement of claims on the basis of the general principle of
the laws of the member states
• These serve to reinforce the Court of Justiceʼs claim that it can rely on general
principles as a source of law in the EU legal order
• Additional sources of law are sometimes classified into broad grouping
o Human and fundamental rights

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o Equality principles and


o Those relating to general procedural rights

Human or fundamental rights


• Communities and EU established as direct response to WWII
• Previously most provisions were in EC treaty, now included in TEU and TFEU
• provisions in Articles 2-3, 6 TEU and Articles 8-10, 18-19, 40, 45, 153 and 157
TFEU
• at start of Communities there was no specific and binding set of obligations
concerning individual rights of citizens
• after WWII western European states were committed to the concept of protecting
human rights
• 1955: all member states, except for France, had ratified European Convention on
Human Rights
• France ratified in 1974
• 1977: Joint Declaration by Community Institutions on Fundamental Rights  stressed
importance of nat. constitutions and ECHR
• Court of Justice gave guarantee that national constitutions will not be infringed even
though community law is superior  reason: human rights form party of the
community legal order
• Non-retroactivity is a principle of community law
• Court of Justice continues to refer to the ECHR in support of its judgments
• Article 6(3) TEU provides that the Union recognizes the rights in the EU Charter of
Fundamental Rights as having the same legal status as the Treaties
• Article 6(2) provides that the Union shall accede to the ECHR and declares that
those rights in the ECHR shall constitute general principles of the Union`s law
• Applicants who wish to join EU: obliged to have respect for human rights (Article 49
TEU)
• Member states with serious breach and offence in regards to human rights, may have
its rights under Treaties suspended by the other member states (Article 7 TEU)

Equality and non-discrimination


• Prohibition of discrimination in:
o Article 18 TFEU: non-discrimination on the grounds of nationality
o Article 157 TFEU: no discrimination btw. men and women with regard to pay
and equal treatment
o Article 40(2) TFEU: no discrimination between consumers and producers
under the CAP
o 45(2) TFEU no discrimination with regard to the free movement of workers
• General principle recognized by the Court of Justice
• Applies in all areas of EU law
• Treaty of Amsterdam was step further: Article 19 TFEU provides that the Council
may take appropriate action to combat discrimination based on sex, racial or ethnic
origin, religion or belief, disability, age or sexual orientation

General principles of procedural law and natural justice


• Judicial review, confidentiality/legal privilege, legal certainty, non-retroactivity,
legitimate expectation and proportionality  broad categories of general principles,
which have been applied by Court of Justice

The right to judicial review


• General rights to review of administrative decisions exist
• Article 6 ECHR: fair and public hearing

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• Article 13 ECHR: provision of an effective judicial remedy

Confidentiality/legal privilege
• Legal principle privilege in recognized in community legal order providing that it was
in relation to or preparation for a client`s defence but it must be btw. a party and an
independent lawyer
• Privilege extended to in-house lawyer`s reports of the independent lawyer`s findings
• ECJ and General Court must be the final arbiters of what is privileged

Legal certainty
• Basic concept underlying legal certainty incorporates a number of ideas concerned
with the boundary btw. legality and illegality or lawfulness and unlawfulness
• Existence of sanctions or punishment for breach of a rule should be made reasonably
ascertainable  at least the type and scope or range of punishment applicable
o Principle of proportionality in this category
• Legal certainty includes underlying concepts of legitimate expectations, protection of
vested rights, proportionality and non-retroactivity

Non-retroactivity
• General principle of EU law
• Law should not retroactively impose punishments or be the legal base for
punishments, particularly with regard to criminal sanctions, nor be the base for a
change in legal status or administrative sanctions.
• Civil or non-criminal law retroactivity may also occur when a person`s actual rights or
expected rights are altered, redefined or totally removed
• Principle of non-retroactivity may take on more subtle forms in civil law application to
remove the difficulties created by the alteration or withdrawal of rights by the
community legal measures
o Involves principle of legitimate expectations
• Provided the legitimate expectations of the parties affected have been respected,
then even a measure which is retroactive in effect may be upheld

Legitimate expectation or vested rights


• Legitimate expectations of affected parties must be observed, especially when they
pre-date an EU provision affecting their rights
• Some degree of overlap with non-retroactivity

Proportionality
• Principle of proportionality embodies concept that the punishment should fit the crime
and not go further
• It must be reasonable in the circumstances and puts the question to the relevant
authority of whether the same result could have been achieved by other methods or
means less harmful
• Individuals should not be affected by actions beyond those necessary in the public or
Union interest and any fines or punishment must be in proportion to the seriousness
of any breach
• Article 5 TEU applies to the relations btw. the Union and the member states in
ensuring that any action at the Community level must be in proportion to the aims of
the Community and not go beyond those aims

Summary
• Category of general principles is already a wide one and potentially capable of great
expansion

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• Principle of subsidiarity could also be included deals with division of powers


• Potential general principles:
o Transparency
o Good faith
• EU draws the laws applicable in the EU legal order from a variety of sources, the
specific EU sources representing the formal and official sources of Treaties,
Protocols, Declarations and EU secondary law mentioned in Art. 288 TFEU
• EU will become member of the ECHR  will formally add that body of law to the
sources of EU law

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Chapter 5: Supremacy of EU Law


Supremacy of EU law
• Supremacy or priority of EU law can be considered from two perspectives
o Point of view of the Union
o Point of view of the member states

The view of the Court of Justice


• There is still no express declaration or specific legal base for the supremacy of EU
law in the Treaties (despite the reforms introduced by the Lisbon Treaty, and the
inclusion of an express statement in the abandoned Constitutional Treaty (CT) )
• The 2007 Lisbon treaty has sidestepped the direct expression of supremacy which
was contained in the CT

Case 26/62 Van Gend en Loos


• Member states had limited their sovereignty
• Individuals in the Community could uphold rights under Community law in the national
courts and in the face of conflicting national law
• Community = Union
• Leading case in the development of the doctrine of direct effects
• Prepared the ground for the Court of Justice to build its argument for supremacy of
Community law
• Affirmed the Courtʼs jurisdiction in interpreting Community legal provisions  ensure
uniform interpretation in the member states
• Established direct effect of Community law in the national legal orders
• ʻ the Community constitutes a new legal order of International law for the benefit of
which the States have limited their sovereign rights, albeit in limited fields, and the
subjects of which comprise not only member states but also their nationalsʼ

Case 26/62 Van Gend en Loos, Case 6/64 Costa v ENEL and Case 106/77
Simmenthal
• Community law was assumed to be an autonomous legal order which is related to
international law and national law
• It is nevertheless distinct from them and thus subject to its own logic in relation to
supremacy over the law of the member states
Case 6/64 Flaminio Costa v ENEL
• Primarily concerned the payment of an electricity bill of a very low value
• Italian Government passed an act to nationalize the electricity industry (1962), this
industry sent out bills to recover debts previously outstanding
• Mr. Const claimed the action was in conflict with then Article 37 of the EEC Treaty
(concerned with State monopolies)
• Raised the wider issue of whether a national court would refer to the Court of Justice
if it considers Community law may be applicable or simply apply the subsequent
national law which became an integral part of the legal systems Court of Justice
stressed the autonomous legal order of Community law
• EEC Treaty has created own legal system of the member states and which their
courts are bound to apply
• Member states have limited their sovereign rights and have created a body of law to
bind their nationals and themselves
o By
 creating a Community of unlimited duration,
 having its own institutions
 its own personality
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 its own legal capacity


 real powers stemming from a limitation of sovereignty or a transfer of
powers from the states to the Community

• Community law takes priority over all conflicting provisions of national law whether
passed before or after the Community measure in question
• The integration into the laws of the Member States make it impossible for the states
to accord precedence to a unilateral and subsequent measure over a legal system
accepted by the on the basis of reciprocity  such a measure cannot be inconsistent
with that legal system

• Court of Justice invoked the use of some of the general provisions of the EEC Treaty
both of which would be breached if subsequent national legislation was to have
precedence
• The law stemming from the treaty, and independent source of law, could not because
of its special and original nature, be overridden by domestic legal provision, however
framed, without being deprived of its character as Community law and without the
legal basis of the Community itself being called into question!  Community law must
be supreme over subsequent national law

Case 106/77 Simmenthal


• Directly effective provisions of Community law preclude the valid adoption of new
legislative measures to the extent that they would be incompatible with Community
provisions
• Voluntary limitation of sovereignty and the need for an effective and uniform
Community law requires supremacy
• A provision of EC law must be implemented as effectively as possible

• Consequence of a member state not giving primacy to EU law is that liability on the
part of the state will be incurred

Supremacy and member states constitutional law


• National courts do not posess the poer to review Community law (Case 11/70
Internationale Handelsgesellschaft)
• Autonomy of jurisdiction (deny national courts the right to ignore the distinction or
separation of the national and Community law legal system but nevertheless do so
itself)
Case 106/77 Simmenthal
• The law stemming from the treaty cannot because of its very nature be overridden by
rules of national law without being deprived of its character as Community law
• Any inconsistent national legislation recognized by national legislatures as having
legal effect would deny the effectiveness of the obligations undertaken by the member
states and the good faith clause and thus the imperial foundation of the Community

• The Court of Justice is clear that Community and now EU law is supreme over all
types of national law
• EU law denies the member states the right to resolve conflicts of law by reference to
their own rules or constitutional provisions
• Obtains supremacy because of the transfer of state power and sovereignty to the
Union in those areas agreed
• Member states have provided Union with legislative powers  no point if member
states could annul or suspend the effect of EU law by later national law

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• Precondition of the existence and functioning of the Union is the uniform and
consistent application of EU law in all the member states  precedence over national
law
• Any provision of national law which conflicts with EU law must be overruled,
regardless of its date of enactment or rank

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Chapter 6: The preliminary Ruling


The preliminary ruling (Article 267 TFEU)

Introduction
• Article 267 TFEU can be seen as the vehicle which allowed the ECJ to introduce
direct effects into the legal order
• The ECJ as well as national courts are involved in hearing cases in which EU law is
pleaded and upheld ( ECJ held, that Community law was a matter not just for the
member states and to be argued before the ECJ but that is concerned individuals
also and gave them rights which they could argue before their own national courts –
Van Gend en Loos)
• ʻdual vigilanceʼ describes the situation whereby
o the Commission ensures EU law enforcement procedure and individuals
o the Commission can pursue remedies for breaches of EU law by member
states that affect their rights
• additional means of contesting national laws were developed by the ECJ to provide
remedies for individuals in circumstances where direct effects did not exist
o most importantly: indirect effect and state liability
• system of remedies has developed extensively

Article 267 TFEU. The preliminary ruling procedure


• preliminary ruling or reference procedure by which the courts of the member states
can refer questions to the Court of Justice on matters of EU law
• procedure provides the link or bridge between the national legal system and the EU
legal system
• courts of the member states may or sometimes must seek a ruling from the Court of
Justice
o on the interpretation of all form of EU law
 including international treaties and recommendations and
o on the validity of EU secondary legislation
• main task of the Court of Justice is to interpret and rule on the validity of EU law so
that a national court can reach a conclusion on a case involving EU law
• national courts role is to determine the facts of a case, ask a question of the Court of
Justice when one arises and later, when the ruling of the ECJ has been sent back to
the national court, apply the ruling to the facts of the case
• Court of Justice should not concern itself with the application of the ruling it has made
or advise the national court how to apply the ruling
• The article has at its purpose
o the uniform interpretation and application of EU law in all the member states
o legal certainty by ensuring that EU law means the same in ever member state
• intended relationship was of equality and cooperation (Court of Justice should only
provide a guiding ruling and not direct the national courts  sharing of jurisdiction)
• the article was the instrument which allowed the Court of Justice to develop the
doctrines of direct effects and supremacy, vital for the development of the system of
remedies
Which bodies can refer?
• Court of Justice has accepted reference from a varied number of bodies which are not
courts, but which decide legal issues based on EU law including administrative
tribunals (e.g. Van Gend en Loos) , arbitration panels and insurance officers
• Determination of what is an acceptable court or tribunal is a question for the Court of
Justice
• Following cases helped to define the scope of acceptable bodies
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o Case 61/65 Vaassen


 Reference received from arbitration tribunal of a private mine
employeesʼ social security fund
 Power to nominate members gave approval to both the panel itself and
 The fact that the panel was a permanent body operating under national
law and rules of procedure qualified it as a court or tribunal
o Case 246/80 Broekmeulen v HRC
 Reference made by the Appeal Committee of the Dutch Medical
Professions Organization
 Held to be acceptable, because it was approved and had the
assistance and considerable involvement of the Dutch Public
Authorities
 Its decisions were arrived at after full legal procedure, the decisions
affected the right to work under Community, they were final and there
was no appeal to Dutch Courts
o Case 138/80
 Reference from the Paris Bar Association Council
 Refused because there was no lawsuit in progress
 Bar Council was not therefore acting as a court or tribunal called upon
to give judgment
o Case 102/81 Nordsee v Nordstern
 Reference from a privately appointed arbitration body
 Refused because there was no involvement of national authorieties in
the process, there was not a sufficiently close link to national
organization of legal remedies
o Case C-24/92 Corbiau v administration des Contributions
 Reference from the office of the Director of Taxation
 This body acted in both an administrative and judicial capacity
 Lacked sufficient independence to be regarded a court or tribunal
o Case C-54/96 Dorsch
 Particular instructive
 Courts spell out the criteria
• Whether court is established by law
• Whether it is permanent
• Whether its jurisdiction is compulsory
• Whether its procedure is inter parties, i.e. between two parties
• Whether it applies rules of law
• Whether it is independent
• It is not critical to acceptance if the body is private or there is not an appeal from its
decision
• A strong indicator is the level of involvement by national authorities
• Whether all these criteria will be strictly applied in all cases in the future is uncertain
Is the question relevant and admissible?
• The article itself contains little guidance except to provide that if the member state
court or tribunal considers that a decision on a question of EU law is necessary to
enable it to give judgment, it may request a ruling from the Court of Justice
• The relationship or partnership which is supposed to hallmark this procedure requires
that, once requested, a ruling be given by the Court of Justice to complete the EU
side of the procedure
• According to the letter of the article it is for the national court to decide to refer a
question

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• In practice it is often regarded as the initiative of one of the parties to request that a
reference be made, but it remains the case that ultimately the national court has the
right to decide
• The initial approach of the Court of Justice is described as come one-come all and it
was happy to correct even improperly framed references to accept them
• It refused to rule on the validity of national laws, but it does take position in cases
where EU la conflicts with national law and states which law should take preference
• The finding by a national court that it needs to refer is not to be questioned by the
Court of Justice (Van Gend en Loos)
• Court of Justice held that it is a decision of the national court alone to judge whether a
decision on the question is necessary for it to give judgment (Costa v ENEL)
• The Court of Justice has declared that it was unable to review the facts of the case
presented to it in the case, i.e. it will not go behind the national decision (Simmenthal)
• Court of Justice was seen to be less willing to accept all references and has from time
to time declined to give a ruling on questions referred to it on the grounds that no real
question arises or that such references were an abuse or misuse of the article

Rejected references: relevance, clarity and basic information


• Cases may be rejected
o if they lack basic information needed
o where information is not clearly conveyed to the ECJ
• question that is raised must be one that is justiciable before the court
• there is also a formal ground for refusing a judgment, following a change to the Rules
of Procedure of the Court of Justice (Article 104 (3))
• Court of Justice can refuse a case where the question is manifestly identical (or can
be deduced) to one already answered (only if the Court hears from the Advocate
General first)
• May also decide to consult the referring court for the observation of the parties
• Courtʼs view is that it is up to the member statesʼ court to determine if they need a
ruling
• Reference should be clear and succinct but sufficiently complete
• The Court may, after hearing from the AG, seek clarification from the referring court if
the question or issue is unclear (Article 104 (5) Rules of Procedure)
No genuine dispute or an abuse of the procedure
• There are two cases of special importance arising from the same sets of facts and
underlying problem (see p. 153/154 for an example)
Acceptance nevertheless
• The decision in Foglia v Novello has been cited as authority to the Court of Justice in
subsequent cases as an argument that the Court of Justice does not hear the case

The question referred: overall view


• Court of Justice did not wish to encourage national courts to challenge the validity of
the laws of other member states, especially when there existed the possibility of
proceeding in the French courts to challenge French law and from which the article
could be launched if deemed necessary by the French judge (Foglia v Novello)
• Court of Justice may decline case under Article 267 TFEU in a number of situations
o Where the question referred is hypothetical
o Where it is not relevant to the substance of the dispute
o Where the question is not sufficiently clear for any meaningful legal response
o Where the facts are insufficiently clear for the application of the legal rule
• Cooperation between national courts and the Court of Justice still exists, but the Court
of Justice no longer simply accepts anything put before it

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• Exercises more positive control over its own jurisdiction in the manner similar to
superior national courts
• Approach is reflected in the case law arising from Article 267 TFEU

A discretion or an obligation to refer?


• Whether there is a discretion or an obligation to refer a question depends on which
sentences of the article apply
• 267 (2) states that any court may refer if it considers it necessary to reach a decision
in the case
• Article 267 (3) states that courts against whose decision there is no judicial remedy,
shall bring the matter before the Court of Justice

The discretion of lower courts


• Courts falling within 267(2) are not obliged to refer but have a wide discretion to refer
at any stage of the proceedings and in any sort of proceeding
• Any national court which considers that a ruling on EU law will help it decide an issue
has the discretion to decide regardless of any national rules of precedent or referral
(Rheinmühlen – Düsseldorf)

The timing of the reference


• National courts can refer at any stage of the proceedings and in any sort of
proceedings
• Court of Justice has provided extra-judicial guidelines
• There are two special procedures
o Accelerated procedure
 National court may request that this procedure be utilized where it is a
matter of exceptional urgency
 the case will be listed immediately giving the parties fifteen day to
submit observations
o Urgent preliminary ruling procedure
 Relates specifically to the areas of freedoms, security and justice
 Introduced to deal quickly with cases involving the detention of persons
• None of this impinges on the ultimate discretion of national courts
Courts of last instance
• Initial problem exists in deciding which courts are courts of last instance for the
purpose of Article 267 (3) TFEU
• Relevant court is the highest court for the case rather than the highest court of the
member state
• In Costa v ENEL it was held that national courts against whose decisions there is no
judicial remedy must refer a question of Community law to the Court of Justice
Avoiding the obligation to refer: the development of precedent and ʻacte clairʼ
• It is no longer necessary to make a reference where the provision in question has
already been interpreted by the Court of Justice or the correct application is so
obvious as to leave no scope for any reasonable doubt
There is a previous ruling on the point
• If cases and their judgmenet can be based on previous judgement the national court
can excuse the obligation to refer
The answer is obvious (acte clair)
• Under the doctrine of acte clair (French law) a lower court need not refer a case to a
hogher court if it thinks the application of law is obvious
• In EU law this means that national courts need to make a reference if they consider
the answer to the question on EU law to be obvious

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• National court must be convinced that the matter is equally obvious to courts of other
member states, that it is sure language differences will not result in inconsistent
decisions in member stats and that EU law must be applied in light of the application
of it as a whole with regard to the objectives of the EU  extremely difficult to fulfil
Questions of validiy
• Must be referred to the Court of Justice
• National courts cannot decide for themselves that Community law provisions are
invalid
Use of acte clair by the national courts
• Acte clair is being abused by national courts sometimes
• There were some movements to refine the principle by removing its availability to
courts of last instance
• Courts can be held more liable now

The effect of an Article 267 TFEU ruling

The effect on the Court of Justice


• In the absence of binding precedent in the EU legal order, a ruling by the Court of
Justice is binding and effective in that case only and there is no further binging effect
on the Court of Justice
• Court of Justice tends to follow previous decisions to maintain consistency and will
cite previous judgments
• Development and build-up of legal principles as in common law does take place
• But Court also overrules previous decisions without much commotion when it feels
that the situation warrant it
• Seems to move in the direction of setting up a system which certainly starts to
resemble a system of precedent

The effect on the national courts


• An article 267 ruling is a mandatory judgment and not an advisory opinion
• A ruling of the Court of Justice is then to be treated in each member state according
to how its own system of law regards authoritative judgments
• The Article 267 TFEU, guidelines, point 31, provides that the Court of Justice wishes
to see that its judgment has been applied in the national proceedings and to that end,
be send a copy of the national courtʼs final decision

The evolution of Article 267 TFEU references


• Article 267 has allowed the Court of Justice to develop a system of remedies because
cases referred from the national courts are those predominantly brought to the courts
by individuals whose rights have been infringed by the member state authorities
• Remedies developed include
o Direct effect
o Indirect effect
o State liability
• Remedies can be secured in the member stateʼs courts
• Court of Justice ruling now has a far more general importance than just for the parties
in a single case and appears to have placed the Court of Justice at the apex of the
systems of national courts
• Nature of the relationship changed from a symbiotic or horizontal one more to a
vertical or hierarchical one
• This is a form of conscious or deliberate sectoral delegation of responsibility over EU
law to the national courts
• National courts become enforcers of EU law

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Reforms and future


• expansion of the CFI jurisdiction to include Article 267 references
• Ability to set up judicial panels
• suggestions:
o Limiting the national courts able to make a reference by removing the right of
first instance courts to refer
o Only allowing novel or complex cases
o Permitting national courts to make suggestions as to the answer
o Permitting national courts to decide themselves subject to an appeal to the
Court of Justice
o Setting up regional EU Courts, with appeal to the Court of Justice

Interim measures within an Article 267 TFEU reference


• May also by highly relevant to EU law questions
• Reference may take upwards of 17 month
• If rights under community law were at stake pending a ruling on a reference on the
substantive question, interim relief should be granted (Factortame)
• Relief should only be granted provided there was sufficient evidence for the
procedure (Zuckerfabrik Süderdithmarschen AG)
• Interim relief was
• A common rule has been established which is nevertheless subject to national legal
procedure but only to the extent that the EU law right is not endangered

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Chapter 7: Treaty Enforcement Action

Enforcement actions by the Commission


• Control under Art. 258 TFEU
• A state can be taken to Court

What constitutes a breach?


• Act or failure to act by a member state
• Failing to implement EU legislation
• Failing to remove national legislation which is in conflict or inconsistent with EU
legislation
• Wrong or delayed implementation
• Breaches may arise from Treaties, secondary legislation, international agreements,
decisions of the ECJ and general principles

Identifying and reporting breaches


• Commissionʼs investigations or from the failure of the member state to notify how they
have implemented EU law as they are required to do so now under secondary
legislation
• Breaches can be reported by other member states, the EP or affected individual
citizens or companies
• The Commission is not under an obligation to act on a complaint nor is even required
to inform the complaining individual of what, if anything, was being done

Defendants in Article 258 action


• Breach not only restricted to governmental action, can come from any part of a state
• Member states are responsible for breaches caused by legislature, executive, local
and regional authorities, judiciary

The procedure of an Art. 258 action


1) The informal or administrative stage
• Commission must have reached the conclusion that the member state is in breach of
an obligation before there can be an action before the ECJ
• Commission will inform the state by letter
• State can answer or correct its action before procedure of Art. 258 begings
• Commission is not bound to commence proceedings
2) Letters of formal notice
• Not every suspicion of infringement by the Commission will lead to this
• Necessary to enter into formal stage
• Lead to respond of a state, not necessarily to proceedings before Court
3) The reasoned opinion
• After reply or time has expired ( usually 2 months), the Commission writes a reasoned
opinion which record the reasons for the failure of the member state. The member
state then has time again to resond => shall bring it to an end => many complaints
are settled during this stage
4) The judicial stage
• Final stage
• After judgment, state is bound to take the measures to comply ( art. 228)
• Court can also initiate proceedings, if state acted too late
5) Defences raised by the member states
• Force majeure or overriding necessity
• Community measured being the cause of political or economic difficulties
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• Emergency (can only be done if Commission gives consent)


• Reciprocity
• Threat to public order
These reasons are mostly denied, can only be defended if the Court decides that the
Commission made a mistake

Suspensory orders and interim measures


• Court may order a contested act to be suspended under Art. 278 TFEU or 279 TFEU
• A case for requested measure must specificially be made, interim measures must be
requested prior to the final judgment end applied in urgent circumstances

The application and effect of judgments


• The initial judgment of the ECJ is only declaratory and carries no specific sanctions
• Contrast to its greater powers of suspension at the interim stage

Article 260
• Member states have to comply with judgments
• Otherwise further breach of Art. 260

Sanctions under Art. 260


• fine member states for a breach of EU law
• further reasoning by Commission and time limit for compliance required
• Art. 261 provides that the penalties will be determined by regulations to be adopted
by the council and a penalty calculation system was established by the Commission
• Basic penalty fixed at 600€ per day, will apply from day of judgment
• Changed after Lisbon Treaty: Further notification not necessary: speeds process up

Actions brought by one member state against another


• Art. 259 TFEU as basis when one member states thinks that another breached EU
law
• Mostly request to Commission to act under art. 258
• Member states have full locus standi in relation to art. 259, which means that they
donʼt have to have a specific interest in bringing action

The involvement of the Commission


• Matter before Commission: both states have to submit their observations
• Commission seeks to bring about a solution before Court action is necessary

Complaining state may then refer the matters to the ECJ


• If no solution, time is over or Commission fails to submit an opinion: state can take
matter before Court
• 258 seems to be the better way for states since states can continue with friendly
relations then

Alternative actions to secure member stateʼs compliance


• Doctrine of direct effects
• Individuals can sue a state for loss caused by breach of EU law (258 TFEU )

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Chapter 8: Remedies
Remedies: direct and indirect effects and state liability
• Remedies have been developed by ECJ
• Situation: EU law and national law conflicts
• Concerns: member states and individuals
• Direct effect, indirect effect and principle of state liability, direct applicability (Art.288
TFEU)

Directly applicable
• Art.288 TFEU
• Describe the way in which some provisions of EU law have legal validity in the
member states
• Mode of incorporation of law which is generally or universally binding
• Process by which Regulations become directly applicable without separate
implementation under domestic law
• Member states are obliged not to transform Regulations into national law unless
necessary
• Treaty articles are not actually transformed in national law and they are generally
binding as they obligate member states AND individuals

Direct effects
• Van Gend en Loos
• Link with the application and enforcement of EU law in the courts of the national legal
system
• Link to supremacy of EU law
• Judicial enforcement of rights arising from provisions of EU law which can be upheld
in favor of individuals in national courts (criteria need to be satisfied)
• Treaty articles, Regulations, Directives, Decisions,

Treaty Articles
• Van Gend en Loos : Art. 12 now 30 TFEU  member states shall refrain to introduce
new custom duties on import and exports
• Defendant argued that Treaty article could not be enforced by individuals against the
state
• Enforcement of treaty obligations through Commission (Art.258 TFEU)
• Court: Community has been given sovereign rights, exercise affects member states
AND individuals
• Became part of legal heritage and is enforceable by them before national courts
• Criteria for direct effect (Van Gend en Loos Criteria)
o Clear and precise
o Be unconditional (e.g. time limits)
o Not require implementing measures to be taken by MS or Union
institutions
o Not leave any discretion to member states or Union institutions
• Conflicts between the two systems / MS has failed to comply with EU law
• Vertical and horizontal relationships
• Employers are obligated to comply with treaty article requirements
• Vertical effect : state (state body) ----- individual
• Horizontal effect: individual ----- individual
• Art.18 TFEU = horizontal effect
• Art. 4 (3) = no direct effect

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Regulations
• Direct applicable Art.288 TFEU
• Not necessarily directly effective
• Need to fulfill same criteria as laid down in van Gend en Loos
Directive
• First: not precise enough to give rise to direct effects because no direct applicability
(member states implement themselves, their discretion)
• Cannot fulfill van Gend en Loos criteria
• Did not have to be published  negative for legal certainty (now have to be published
Art. 297 TFEU)
• Addressed to member states and not individuals
• Make them potentially enforceable  line to Regulation would blur, would resemble
direct applicable law
• Can be enforced by individuals against the state or arms of the state but not against
other individuals
•  can enforce rights against public but not against private employers
• Public employers: national law enforcement agencies or nationalized industries, any
form of state control
• ECJ has no formal rights to review validity of national law, but through direct effect 
can declare and incompatibility of national law with EU law
Decisions
• Can be invoked by individuals
• Must satisfy criteria and can only be enforced against those obligated
International agreements
• May give rise to direct effect if criteria are fulfilled
• Association agreements can produce direct effect
• Provisions of more complex agreements such as GATT (to flexible and easy to
change by political negotiations)or WTO do not give rise to direct effects (mixed
agreements that involving competences of MS and EU)
• WTO and GATT: are not based on binding and immediately enforceable reciprocal
rules, but rules, the breach of which leads first to further negotiations

Overcoming the lack of horizontal direct effect for Directives

Extending the definition of “the state”


• Expanding concept of public sector (incl. more employers)
• More individuals can enforce their rights
• Foster Case: State authority = bodies which provided a public service under the
control of the state and which for that purpose were granted special powers (company
nationalized and later privatized)
• Direct effect available against these bodies
• Different situation in each of the MS as regard public and private sector, there will be
a difference in the rights of individuals between MS
• Privatization of once nationalized companies might affect also the rights of individuals
• Foster: private companies undertaking a public duty
• No uniformity/certainty in regard to public and private sectors

Indirect effects
• Standard by which the conformity of national law could in effect be reviewed by the
Vourt of Justice
• Art. 4(3) obliges MS to comply with Union obligations

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•  applied to all authorities of MS and courts where therefore obligated to interpret


national law in such way as to ensure that the obligations of a Directive are obyed
• Depends on willingness and ability of national courts
• Directives cannot impose obligations on individuals
• Directive could be upheld by an individual against another since the national courts
achieved the result required by the Directive through interpretation of national law
• Retroactive interpretation will cause severe difficulties where there is a clear conflict
between the national law and the EU Directive
• Court: stressed that national courts should presume and intention on the part of the
state to comply with Union law and to try as far as possible to give effect to the Union
law to achieve result of Directive
• MS intend to comply with Community law obligations  breach, they must
compensate any loss incurred (Francovich)
• Failure to succeed in direct and indirect effect  final resort: obtain damages

Incidental horizontal effects


• Faccini Dori Case: Court rejected direct effects of Directive BUT few cases appear to
produce horizontal direct effects
•  Directive has influenced outcome of the cases involving private parties, but in an
incidental way and not directly (without imposing a strict obligation an any of the
individual parties)
• Directive = No to exert rights, but to overcome the otherwise incompatible application
of national law
• = national law is in effect reviewed by the CJ so see if it meets the standard of the EU
(rather than providing individuals rights)
• But no establishment of direct effects for Directive
• Directive are being interpreted to determine the validity of national law in action which
may affect the legal position of a private party to a court action
• Only applicable to non-conforming national law

State liability: The principle in Francovich


• Francovich: condoned an action for compensation by an individual against a MS
when the MS failed to comply with Union law obligations and which resulted in
damage or loss for that individual
• + addition to Commission actions against MS to enforce EU law and overcome the
difficulties generated by the lack of horizontal effects of directive
• Content of Francovich: Italian nationals claimed against the state for a guaranteed
redundancy payment granted by a Directive, which had not been implemented by
Italy  damages occurred as a result of stateʼs failure to implement the directive in
time
o Francovich was employed in a company which as a result became insolvent
o Court: Italy has breached its obligation Art. 226 TFEU, but no individual
remedy
o Directive: no direct effect because of discretion to national courts
o unclear which authority was responsible for setting up a compensation agency
o no national law to interpret in conformity with directive
o no procedural law to claim against the state
o van Gend, Costa v. ENEL and Simmenthal: duty of MS to ensure full
application and enforcement and application under Art. 4(3) and 288 TFEU
o breach  liability
o held: protection of individuals would be weakened if they could not claim
damages for loss caused by a member stateʼs failure to comply
o MS should make good any damage caused to the individual

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o Claims requires
 Directive must contain an individual right
 Must be determinable by provision of the directive itself
 Link between breach and damage caused
• Uniform EU conditions for liability, not dependent on each national set of laws,
although the quantum of damages is for national procedural law
• Faccini Dori: continued opposition to horizontal direct effects of directives
o Stressing need for interpretation close to Directive
o Confirmed Francovich Principle of state liability
• Principle of state liability applicable to all domestic acts and omissions, legislative,
executive and judicial which are in breach of EU law, directly effective or not and in
principle by all three arms of state
• Seriousness of breach must be analogous to that applied to the EC institutions for
damage caused unlawfully by legislative act
• Sufficiently serious breach of a superior rule of law designed for the protection of
individuals (applied to legislative acts)
• MS had manifestly and gravely disregarded the limits of its discretion
• Factors taken into account by national courts
o Clarity and precision of definition of the rule breached
o Measure of discretion
o Infringement and damage was intentionally or involuntarily
o Error inexcusable or excusable?
o Contribution by Union institutions to that problem
o Incompatible national law was being maintained
• Liability can occur with having the breach established by action of the Commission
(Art. 258 TFEU)
• Damages arise from date of infringement
• Breach must be very serious (difficult to prove), standard of fault for liability  more
difficult to obtain compensation
• State liability in all branches of a state, but reluctance to judicial brach

Extension of Francovich
• Van Gend, Costa v. Enel and Francovich: extension of state liability was required by
the new legal order and for the effective protection of the rights which would be
undermined if it were not open to any individual to claim damages for loss caused to
him by a contract or by conduct liable to restrict or distort competition
• Francovich liability extended to determine liability between private parties and not just
against member states (loss by a breach of EU law)

Extension to the national courts


• State liability applies also to breached of EU law rights by the judiciary, in which
cases the MS would have to compensate
• Limited to intentional fault and serious conduct
• Where courts have manifestly infringed the law in their interpretation which has
caused damage

National procedural law and the system of remedies


• Direct and indirect effect, incidental effect and state liability are individual remedies
• Pursued before national courts  effectiveness dependent on national rules of
procedural law
• Outside jurisdiction and direct influence of Union and CJ
• Difference between member states in
o Standing

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o Time
o Burden of proof
o Certain remedies are not available

The principle of national procedural autonomy


• Absence of harmonization rules on procedure, rights conferred by EU law must be
exercised before national courts in accordance with the traditions laid down by
national procedural rules
• EU law right is involved, national procedural law must not deprive a litigant of their
rights under EU law
• General principle of Art.18  no discrimination of the grounds of nationality
• Other principles: practical impossibility + principle of equivalence (EU law rights
should be treated in the same way as national rights
• Not just national substantive law must give way to EU law, but also any national rule
of procedure (constitutional rules which might get in the way of the effective
application of an EU law right)
• MS do not wish to hand over control over their legal system to the EU

Intervention by the Court of Justice


• National remedies must also provide an effective remedy
• Any rules preventing individuals from relying on at EU law right would be incompatible
with the principle of effective legal protection
• EC law has required national courts to provide specific and new forms of remedy
(state liability and payment of damages as established by Francovich)

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Special legislative procedures


• Groups together a number of procedures which differ in one or more elements from
the ordinary legislative procedure
• Council may vote by unanimity or the EP may just be consulted or asked for its
consent rather than co-decide

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• Unanimity of Council combined with consulting the EP appears to be the most


common form of this procedure

The consent procedure:


• Introduced by the SEA
• EP´s consent is required by the Council in respect of membership and withdrawal
applications to the EU, the Union`s membership of intl. agreements and organizations
and for association agreements with third countries (Articles 49 and 50 TEU and
Article 218 and 217 TFEU)
• In event of disagreement, the EP has a right of veto; no formal mechanisms built in by
which a dialogue btw. the two institutions can be initiated in reality there would be
discussion behind the scences
• Consent may also be employed to confirm serious and persistent breaches by a
member state (Article 7 TEU)

Why so many changes to the legislative procedures?


• Product to a number of changes in the EU
o Democratic deficit
o Various expansions of the EU into new policy areas
o Response to the intl. regulation of pan-European or even global problems
• Disputes btw. member-states and institutions on whether right legal base and
procedure has been used

The delegation of powers


• Delegation is regulated by Article 290 TFEU
• Some form of executive action is required
• Delegation can be in form of wide discretionary powers including legislative as well as
administrative forms of secondary legislation
• Delegation may be subjected to confirmation or limits or rules laid down by the
delegating authority, or the delegating authority may retain the right to rescind the act
adopted

Union financing
• Commission proposes the first draft and the maximum increase for non-compulsory
expenditure and forwards it to the Council which prepares the draft budget by a
qualified majority  draft is then sent to the EP, who can approve within 45 days in
which case it will be adopted, or the EP can amend by a majority any part of the draft
budget; draft is then returned to the Council
• Case of disagreement: conciliation committee
• EP´s powers have increased under Lisbon treaty

Summary
• Communities and Union were established by a transfer of powers by the member
states to enable them to act independently of those member states and create their
own laws and legal system
• Only transfer of competences in areas agreed by the member states
• Some areas exclusive competences, other areas shared competences
• Additional residual and general powers were granted  led to competence creep
• Dynamics taking place in the policy-and law making procedure
o Most notable one: balance btw. the direct democratic legitimacy of the EP in
the face of the still legislative superiority of the Council
• Powers of EP have increased under Lisbon

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• Too much participation by the EP or the national parliaments would lead to a slowing
down of the legislative processes
• National parliaments have been given a formal say in any future Treaty amendment
proposals and new membership applications (Art. 48-49 TEU)

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Chapter 9: Direct Actions Before the ECJ

Actions to annul Community acts


• Art. 263 TFEU is the action to annul legislative acts of the Union, which are defective
• Parti Ecologiste Les Verts v. EP: Subject to judicial review
• General Court has jurisdiction to hear direct actions brought by a natural or legal
person against acts of Union institutions, which are addressed to them or directly
concerning them as individuals
• If facts are invalid, ECJ has the sole power to declare acts void

Admissibility
• Failure to satisfy all 4 requirements of admissibility => Case rejected by ECJ
• Which institutions are subject to review, which acts can be reviewed, time limit,
applicants

The institutions whose acts are reviewable


• Commission
• Council
• EP (case law) : because legal power of EP grew
• ECJ: An institution must be empowered under the Treaty to enact binding measures
=> Now wider under TFEU: also institutions which intend to enact binding measures

Reviewable acts
• Acts = term that has to be interpreted
• Art. 263 has been amended to reflect case law
• All acts that intend to have legal effect can be challenged
• Not restricted to legal forms outlined in Art. 288 TFEU

Time limits
• Art. 263 TFEU: applicant has two months from:
- Date of publication of measure
- Date of notification
- In absence of these: from date it came to the notice of the applicant

Locus standi: Who may apply


Place of standing relates to the recognition of a legal interest in a matter which produces the
right to mount a legal challenge against a legal provision.
No standing = No right to challenge
Privileged
• Art. 263 TFEU: Member States, Council, Commission, EP
• They have the right to attack any act
• EC not included
Semi-privileged
• Court of Auditors, ECB, Committee of Regions
• Have the right to challenge acts of the institutions but only for the purpose of
protecting their prerogatives: where their interests are clearly affected
Non privileged applicantsʼ locus standi
• Art. 263(4) provides when they can bring actions for judicial review
• All acts addressed to them
• If not addressed to them, they can still challenge them, if the individual is directly
concerned
• Regulatory act not defined in Treaties
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• Uncertainty in many areas


Decisions addressed to the applicant
• Automatically standing
• E.g. competitions rules (101-102 TFEU)
Decisions in the form of a Regulation; post Lisbon: an act which is of direct individual concern
• Requires a two-part test
1) Showing that the regulation is really a decision or a bundle of decisions
2) Showing that the disguised decision is of direct and individual concern to the
applicant
• If the individual is concerned, the regulation has to be a decision for the applicant

Challenging a Regulation
a) The general rule
• Starting point: An individual cannot challenge a regulation because they are generally
and directly applicable to everyone in the Union = normative acts ( makes sense in
view of Arts. 288-289 TFEU)
• the nature and content of a provision is the determining factor, not the form
• different or unusual characteristics have to be found in order for an applicant to stand
out an be able to challenge it
• many reasons why this rule does not apply
b) Exceptions
1) The closed group category
• enables the identity of the natural or legal persons affected to be fixed and thus
ascertainable
2)Where the applicant is named in the regulation
• action will be held to be of direct and individual concern
• Applicant will obtain standing in respect of that regulation

3)Where the applicant has played a part in the issue of legislation


• Often concerned with alleged breaches of competitions law by other companies or
dumping on EU markets
• Applicants are those who have made a complaint to the Commission which provoked
the Commission to take action and issue a regulation seeking to correct the situation
• Applicant becomes an individual concerned and can challenge the Regulation
• A complaint without further involvement is not enough
4)Anti- dumping Regulations ( seen as hybrid Regulations / Decisions )
• Where as a result of an investigation of individual importers a general Regulation is
issued to catch all imports, applicants have been more successful than normal
because Regulations are regarded as hybrid Regulation decisions
• Individual concern
• If Regulation is a decision, the applicant is still required to satisfy the test of direct and
individual concern
• Individual concern can also be regarded as an exception

Direct and individual concern


• Under Art. 263 TFEU not only Regulations but any Act can be challenged, if the test if
fulfilled
Direct concern
• General rule: if a member state is granted discretion to act under the provision, then
the provision canʼt by its nature give rise to direct concern
Individual concern
• Difficult to demonstrate: the applicant must show sth that distinguishes him uniquely

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• Persons other than those to whom a decision is addressed may only claim to be
individually concerned if that decision affects them by reason if 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 distinguished them
individually just as in the case of the person addressed

Interest groups and party actions


• Can also be recognized: associations have standing if they represent the individual
interests of some or all of its members or their own interest as an association

Merits or grounds for annulment


• if admissibility is established, ground or merits must be proved: Art. 263, par. 2 TFEU
• lack of competence, infringement of an essential procedural requirement,
infringement of this Treaties, any rule of law relating to their application, misuse of
powers

Lack of competence or authority


• equivalent of “ultra vires” = beyond the power to act and concerns the requirement
that all measures must have the appropriate legal authority
• degree of overlap with misuse of power

Infringement of an essential procedural requirement


• specific regulation in Art. 296 TFEU
• Community secondary legislation must give reasons and refer to any proposals and
opinions made in respect of the legislation
• ECJ: insufficient, vague or inconsistent reasoning constitutes a breach of this ground

Infringement of the Treaty or any rule relating to its application


• Capable of embracing all errors of Community law : e.g. breaches of general
principles or human rights

Misuse of power by a Community institution


• Basis = the use of power for wrong purposes

The effect of a successful action and annulment


• Art. 264 TFEU: if action is well founded, ECJ should declare the act concerned to be
void
• Can also declare only party of the Act invalid = some can remain in force
• Art. 266 TFEU: institutions have to comply with the ruling of the court
• Court cannot fine institutions

A restrictive approach?
• Difficulties
• Locus standi as a reason for reducing the number of cases?
• Another reason: ECJ more like a supreme court than as a court directly accessible as
a first instance court for individuals
• National courts should be responsible under Art. 267 TFEU: now General Court
mainly deals with these cases
• Individualʼs actions should not hinder the institutionʼs ability to operate
• Areas in which individuals finds it easier to achieve standing (competition law, state
aids, anti-dumping measures) closer involvement of individuals make difference

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• Cases which arise from application of retroactive legislation, where applicants belong
to a fixed and identifiable group and which would suffer an injustice if not allowed
standing
• Arguments for more liberalized test  influenced by the adoption of a, as yet, non-
binding charter of fundamental rights into the EC legal order under which individuals
are entitled to expect effective judicial remedy
• CFI: Measure must affect the applicant`s legal position in a manner which is both
definite and immediate, by restricting his or her rights or imposing obligations on him
or her
• Court of Justice: any revision to the standing rules was not for the Court to do, but for
the member states in the context of a Treaty amendment  overturned CFI`s
decision
• Overall picture remains that of a continuing restrictive locus standi for applicants
under Article 263 TFEU; indirect alternatives are available to individuals

Alternatives to Article 263 TFEU


• Reference from a national court to Court of Justice for a preliminary ruling on validity
of acts of the institutions, which is a question that must be referred by all national
courts
• Actions under Art. 267 TFEU avoid the strict time limits of Article 263 TFEU and are
instead subject to the national procedural rules and time limits
• Article 267 cannot be used to simply get around the time limits of Article 263 TFEU
• An element of national law is needed to be able to raise a matter before the national
courts
• National court retains discretion whether or not to refer and may not consider a
reference necessary  Article 267 as an alternative is very uncertain and
unpredictable

The plea of illegality- Article 277 TFEU


• if other proccedings are taking place before the Court of Justice, a party can raise an
issue of illegality of a Union Act of general application; only indirectly or incidentally 
not as an independent cause of action
• Article 277 TFEU is designed to overcome the strict locus standi requirements for
private parties in cases that would otherwise be unjust
• Simmenthal v. Commission: Court of Justice held that the action would also cover
Acts which produce similar effects but were no in the form of a Regulation on the
grounds that individuals should be given the chance to have reviewed implementing
Decisions which are of direct and individual concern, thus echoing the locus standi
requirements under Article 263 TFEU.
• Grounds of action are those listed in Article 263 TFEU
• Effects:
o Declaration of inapplicability of the general act contested
o Annulment of the act due to illegality

Act for damages under Article 268 and 340(2) TFEU


• Article 263 does not provide compensation for a damaged but successful applicant
• Damages must be pursued under Art. 340 TFEU  does not depend on an earlier
Article 263 or Article 267 TFEU application
• Legality of a measure alleged to have injured the plaintiff may be put in question
indirectly under Article 277 TFEU

Action for failure to act- Article 265 TFEU

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• Article 265 TFEU concerns actions against the EP, the Council, the Commission and
ECB or other bodies, offices or agencies of the Union for a failure to act; it constitutes
an attempt to compel the institution or instructions concerned to take action
• Designed to tackle failure of an institution to act which is in violation of a treaty duty
• Presupposes that there was a duty imposed on institution in the first place
• Complements Art. 263 TFEU action to cover inaction and can be pleaded at the same
time
• Not necessary to state which action was subject of the application
• Article 263 TFEU: illegal action
• Article 265 TFEU: illegal inaction
o Both provisions have as their objective the ending of a situation of illegality
o Actions are heard at first instance by General Court with an appeal to Court of
Justice

Admissibility and locus standi


Privileged applicants
• Article 265(1): Union institutions and member states have a privileged right of action,
which is not subject to restrictions on admissibility
• ECB can take action in areas falling within its field of competence
• Article 265: all of the union institutions have the right to commence an action
defined in article 13 TEU and include the European Council and the Court of Auditors
Non-priviliged applicants
• Individuals have a restricted but more clearly right of locus standi under Article 265(3)
and 263 TFEU; no equivalent within the Article itself of direct and individual concern
they have to be potential addressees
• Any natural or legal person may complain to the court that an institution, body, office
of agency of the Union has failed to address to that person any act other than a
recommendation or an opinion

Acts subject to an Article 265 TFEU action


• Court of justice has rejected applications by individuals for measures of general
legislative content
• Regulations cannot be requested because by their nature they are not capable of
being addressed to specific individuals only
• There must be an obligation under the Treaty to adopt a reviewable Act which is
enforceable on the part of the institution
• Acts requested must be sufficiently identified

Procedural requirements

The invitation to act


• Preliminary procedural step which must be taken before court action can ensue
• Article 265(2) TFEU: if, within two months of being so called upon, the institution,
body, office or agency concerned has not defined its position, the action may be
brought within a further period of two months
• Action shall be admissible only if the institution concerned has first been called upon
to act
• Applicant must request the institution to take a specific action as legally required and
advise that failure to do so will result in a court action under Art. 265 TFEU

Definition of position

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• Requirement has been seen to defeat most actions because where the institution has
explained its refusal to act, further action is inadmissible
• Lütticke v. Commission: Court of Justice declared the application inadmissible on the
grounds that the notification of the refusal was a definition of position.
• Transport policy case: declaration by an institution of its unwillingness to act was
regarded by some as constituting a sufficient definition of position for the purposes of
the Court of Justice. The Court stated that in the absence of taking a formal act, the
institution called upon to define its position must do more than rely stating its current
position which in effect neither denies or admits the alleged failure nor reveals the
attitude of the defendant institution to the demanded measures.

The substantive action


• Transport policy case was the first to succeed under this Article
• In the case the EP had complained that the Council hat failed in its Treaty obligations
to introduce a common policy for transport , lay down a framework and act on sixteen
specific proposals of the Commission
• Court`s response to first claim: because Treaty requirements were so vague, there
could not be said to exist sufficiently specific obligations as to amount a failure to act
• Second claim: only successful in respect of the proposals in respect of the freedom to
provide services
• Other measures were within greater margin of discretion left to the Council by the
Treaty

Results of a declaration of a failure to act


• Art. 266(1) TFEU: institution is required to take the necessary measures to comply
with the judgment of the Court of Justice within a reasonable time
• Continued failure would be actionable under Art. 265 TFEU
• Article 266 is without prejudice to any action for damages under Art. 340 TFEU

Non-contractual liability of the EC


• Contractual liability of the Community is made subject to the jurisdiction of national
law pertaining to the contract under Article 340 TFEU
• Article 268 TFEU confers jurisdiction over disputes relating to claims for non-
contractual liability damages under Art. 340(2) to the Court of Justice
• Art. 340(2): Union has to make good damage caused by the institutions or servants in
the performance of their duties in accordance with the general principles common to
the laws of the member states
• Non-contractual liability covers civil wrongs caused by the legislative and
administrative activities of the Union, whether committed by the institutions or
servants

Admissibility
• 4 elements of admissibility
o Defendant institution
o Actor or inaction
o Time limit
o Locus standi

Locus standi
• In contrast to art. 263 and 265 TFEU, there is no restrictive locus standi imposed on
individuals by art. 268 or 340(2) TFEU
• Applicant must be affected and damaged in provable way
• Demonstrate degree of loss

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Time limit
• Article 46 Statute of the Court of Justice
• 5 year limitation period on actions wich commences from the occurrence of the event
causing damage

The defendant institution and Act


• Appropriate institution should be named as defendant, whose legislative of
administrative Act or whose action inaction cause the damage
• Commission, or Council or EP or both, who jointly legislate in many areas of EU law
• Member would only be sued where they are responsible for the implementation of
Union measures and have exceeded the discretion they were given

Autonomous or independent action


• Court of Justice: Action for damages is an autonomous form of action having its own
particular purpose to fulfil within the Treaty system of remedies and subject to
conditions on its use dictated by its specific nature  Principle of Autonomy of
Remedies
• Little difficulty faces applicants in respect of admissibility; Problem: proving that act of
the Union caused damage and to show sufficiently serious breach of a rule of law

The requirement of liability


• Under TFEU, liability of the Union is to be determined in accordance with the general
principles common to the laws of the member states
• Requirements have been identified to establish liability for the purpose of Article
240(2) TFEU that the Union is liable either for damage caused by one of its
institutions; or for damage caused by its servants in the performance of their duties
• Must be a wrongful act or omission on the part of the Union, which has breached a
duty; applicant must have suffered damage; must be a causal link btw. the act or
omission and the damage

The standard of liability and fault


• Liability can be imposed for legislative acts such as Regulations, Directives or
Decisions
• Liability can be incurred as a result of failures of administration, the negligence of
employees of the institutions in the performance of their duties, but not extending to
personal faults of employees , and the adoption of unlawful legislative acts
• Single test should apply to both administrative and legislative acts

Administrative acts
• Requirement of fault indicates that it is necessary for the establishment of liability for
damage caused by administrative acts
• Only in exceptional circumstances would an incorrect interpretation constitute a
wrongful act
• Notorious case in EU law concerning the liability of the institutions in respect of acts
of its servants  Stanley Adams v. Commission  illustration of the rules relating to
duty, vicarious liability, causation and contributory negligence

Liability for employees


• Community is only liable for those acts of its servants, which by virtue of an internal
and direct relationship, are the necessary extension of the tasks entrusted to the
institutions of the Community
• Scope of liability is limited to activities of institutions or the performance of institutional
tasks

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Liability for legislative acts


• Established by case-law
• Legislative acts have potential to cause great damage
• The Court of Justice held that “The Community does not incur liability on account of a
legislative measure which involves choices of economic policy unless a sufficiently
flagrant violation of a superior rule for the protection of the individual has occurred”
• Reasoning of strict test is similar to the strict requirements for locus standi for Article
263 TFEU  high degree of discretion that the institutions need to carry out, the
economic tasks they must carry out, necessarily affects many persons; imposition of
a higher burden when choices of economic policy are involved
• All types of legislative act can be subject to an action under Art. 340(2) TFEU
o 3 parts:
 A violation or breach of a superior rule of law
 The rule must exist for the protection of natural or legal persons
 Violation must have been sufficiently serious

Rules of law covered


• Include specific legal rules contained in legislation, fundamental rights and general
principles
• Principles of proportionality, legal certainty, equality/discrimination, and legitimate
expectation are often raised
• Rule of law accepted in Schöppenstedt case was prohibition of discrimination, which
is contained in a Treaty Article  superior rule of law
• 40(2) TFEU provides that CAP and measures taken under it shall exclude any
discrimination btw producers or consumers within Union
• Unjustified enrichment is a rule of quasi-tort

The protection of the individual


• Includes natural and legal persons
• Has been interpreted to include the protection of classes of person also as with the
the importers

The breach must be sufficiently serious


• Required because it is a challenge to an economic policy choice of the Union
involving the exercise of a wide discretion
• Sufficiently flagrant or serious breach is required
• Effect of measure relates to its scope, number of people affected and the type of
damage cause it it was unusual
• Other factors: whether there is a higher Union public interest or general economic
interest
• Only a small defined and closed group of applicants could successfully pursue a
claim ; if large numbers were involved this would defeat a claim

A new single test for liability ?


• According to Factortame case up to 1995, only eight awards had been made against
the Community institutions
• Bergaderm case
• Where the institutions and member states had manifestly and gravely disregarded the
limits of their discretion, then the breach would be sufficiently serious enough to incur
liability
• Where there is no discretion, a mere infringement will suffice but where there is
discretion, it would be a matter of degree by which the institution exceeded that
discretion

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Individual acts
• Requirement to show a sufficiently serious breach should also apply to individual
acts: Holcim v. Commission

Liability for lawful acts


• Possibility that the Union may be liable, in certain circumstances for damage caused
by lawful acts has been explored  further case-law is required

The damage
• Having established the existence of and act or omission attributable to the Union,
damage to the applicant must be proved
• Damage can be purely economic or take form of moral damage
• Damage must be over and above the risk of damage normal in business, in that it
exceeds the risks in operation inherent in the sector concerned

The causal connection


• the Act of the Union caused the damage and there must be a sufficiently direct
connection between the act and the injury
• damage must be a sufficiently direct consequence of the unlawful conduct of the
institution concerned
• damage must be certain, specific, proven, and quantifiable and it may cover imminent
forseeable damage and lost profits

Concurrent liability/choice of court


• for the most part the application of EU legislative measures, especially in the
agricultural sector, are actually administered and thus dependent on the national
intervention agencies who make payments and receive payments
• if claim is based on Union Act that was wrongful, the question of whether a national
court or court of justice arises
• only really the conduct of the institutions or servants that would require application to
the Court of Justice or where the claims are for unliquidated damages, that is, those
involving loss of profits suffered as a result of illegal EU action

Section summary
• not many cases are successful
• difficulty with which Union legislative acts are achieved is not to e easily overcome
either by actions to annul or actions for damages

Plea of illegality –Article 277 TFEU


• right to plead the illegality of a Community regulation
• Article 277 is not an independent or direct cause of action to the Court of Justice; an
application cannot simply commence an action with this Article

Locus standi
• Article 277 TFEU is available to any party including the member states
• But it is more likely to benefit individuals who for good reason are unable to comply
with the locus standi and time-limit requirements of Article 263 TFEU
• Article 277 is designed for those who either have no rights under Article 263 TFEU or
were unable to meet the locus standi requirements, but who nevertheless are affected
by the illegality of a Union Act

Acts which can be reviewed

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• Article 277 TFEU refers to acts of general applications only which in the EU
essentially means Regulations, which can be challenged only if they form the legal
basis of the subject matter of the direct action
• Article 277 does not enviseage the challenge of Decisions or other forms of binding
Acts which are not generally applicable
• Simmenthal v. Commission: Decision was challenged which was based generally on
prior Regulations and Notices. Regulations could be challenged indirectly through Art.
241 EC (now 277 TFEU). Other Acts which are normative as general in effect should
be regarded as a Regulationn for the purposes of making a challenge under Article
277.  now confirmed by amended Art. 277
• Adressees of an individual Act cannot challenge it indirectly in the Court of Justice
because they should have done so directly under Article 263 TFEU within the time
limits

Grounds of review
• Substantive grounds are listed in Article 263 TFEU
• Simmenthal succeeded on its merits that the general measure had been used for
purposes other than that for which it was intended

Effect of a successful challenge


• Result of such an action is that the Regulation or act is declared inapplicable
• Any acts based on this voidable regulation, will be void and withdrawn

Summary
• Direct actions before the ECJ cover a number of grounds of unlawful activity
• Most important: action to annul an act of the Community under Art. 263 TFEU and
actions for damages under Article 340 TFEU
• Aspects of admissibility in Article 263 and the merits in Article 340 TFEU stand out as
those receiving the most attention
• Article 265 TFEU : failure to act
• Article 277 TFEU : incidental plea of illegality

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Chapter 10: Free Movements of Goods 1 – Tariffs


and Tax Barriers
- Essential to Customs Union and Common Market
- Makes Europe competitive against other continents
- Benefits all actors on the market
- More than just economic advantages

Legislative provisions

The Treaties
- Articles 3-4 TEU and Articles 3-4 and 18 TFEU
- 4 main groups of provisions in TFEU connected with the free movement of goods:
Arts. 26-27 TFEU
• Customs duties and charges having equivalent effect (Arts. 28-30TFEU)
• Common Customs Tariff (31-32TFEU)
• Use of national taxations systems to discriminate against goods imported from
other member states (110TFEU)
• Quantitative restrictions or measures having an equivalent effect in imports
and exports (34-36TFEU)
- Free movement of goods objectives: Art. 3 TEU
• Internal market
• Economic and monetary union
- Internal Market: Art. 26 TFEU = an area without internal frontiers in which the free
movement of goods, persons, services and capital is ensured in accordance with the
provisions of the Treaties
- Aim: achieve the calculation of goods without customs, duties, charges or other
financial or other restrictions, to promote unlimited trade, remove from the member
states the control over export and import matters => EU solely responsible for that (
Art. 3 TFEU )

Progress towards the Treaty goals


- Various stages of economic integration

A free trade area


- Removal of customs duties between member states
- Own external policies
- Can decide on duties payable by third parties on their own
- Different external tariffs possible
- Since importing products compete with domestic products, certification of origin and a
further import duty may be required

A customs union
- Builds on the above
- Common external tariff
- Common position to the outside world

A common market
- Also called internal / single market
- Policies and legal regimes for the free movement of the factors of production and
competition policy

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An economic union
- All of above plus harmonization or unification of economic, monetary and fiscal
policies
- Common currency controlled by a central authority
- Final step would be : political union in a confederation or federal state

Stage of the EU
- Union has a customs union with a common customs tariff, regulated by the
Commission ( Art. 3 TFEU )
- Common market achievements are doubtful
- 16 of 27 member states established an economic and monetary union with an ELB
and single currency
Internal market developments
- Aim is beginning: harmonization
- Did not always work because:
• Empty chair crisis => Luxembourg accords
• Late 1960s economic turn down
• 1970: oil crises and world economic recession
• Increase in number of member states
- Delors: infitiative for the single market: Commission White Paper completing the
Internal market => endorsed by EC 1985 ( 1992 was set as a target date)
- SEA provided possibilities to meet the targets : 114 TFEU: can be enacted in Council
by QMV, greater participation of EP in legislative process
- Environmental policy was introduced, economic and social cohesion policy
- More than only economic concerns

Integration markets
- Achieved by positive and negative integration

Establishment of the internal market

The CCP and the CCT


- CCP = Common Commercial Policy = driving force behind CCT
- CCT = Common Customs Tariff
- Common Market: Elimination of duties
- Art. 31 TFEU: fixed external duties, single set of common tariffs
- CCT also called CET ( common external tariff ): imposes a single tariff for all imports
and is set by the Commission
- Once it has been imported, further tariffs are impossible ( 29 TFEU )
- In relation with GATT and WTO

The prohibition of customs duties


- Provisions on goods and tax can be dealt with under Art. 110 TFEU
- Art. 30 and 32 TFEU: aimed at abolition of customs duties and charges having
equivalent effect and at prohibiting such measures: covers all trade in goods
- Goods = products which can be valued in money and which are capable, as such, of
forming the subject of commercial transactions => extended to services
- Difficult to identify “ a charge having equivalent effect”

A charge having equivalent effect (CHEE)


- 3 Criteria:
1. Must be imposed unilaterally at the time of importation or subsequently

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2. It must be imposed specifically upon a product imported from a member state


to the exclusion of a similar national product
3. It must result in an alteration of price and thus have the same effect as a
customs duty on the free movement of products
 Charge can be excepted , if it is a service rendered for the benefit of the importer
required for the benefit of the importer, required by EU law or part of a system of
internal taxation: have to be further refined by ECJ
 Modified definition: “ any pecuniary charge, however small and whatever its
designation and mode of application, which is imposed unilaterally on domestic or
foreign goods by virtue of the fact that they cross a frontier”
 Does not have to be for the benefit of the member state concerned, doesnʼt have to
be discriminatory, protective or in competition with any domestic product

The validity of charges for services rendered


- Court has developed own rules
- When payment of storage charges is demanded solely in connection with the
completion of customs formalities, it cannot be regarded as consideration for services
actually rendered to the importer
- Charges may be justified:
• Veterinary checks and charges performed as a service
• Fee for health inspections, if required by a Community regulation and covering
actual costs only
• Fees under Council directive 81/389
- They must satisfy the criteria that
• Costs donʼt exceed inspections for which they are used
• Inspections are mandatory/ uniform for all producers in the Union
• Inspections provided for by Community law in the interests if the Community
• Inspections promote free movement of goods
• Inspection requirements of international Conventions ( extended in a case )
Where the charge is in fact a tax
- If applied to domestic and foreign products equally, it is a non-discriminatory tax and if
questioned should be considered under Art. 110 TFEU, not under Art. 30 TFEU
- Exotic import rules: product is available by import only and not manufactured in
importing state

Distinction between internal taxation and charges having equivalent effect


- If it is a measure of internal taxation which is non-discriminatory, it cannot be a charge
having equivalent effect, cannot be caught by Articles 28-30 TFEU
- Governed by Art. 110 TFEU
- Art. 110 allows member states to establish the system of taxation which they consider
most suitable
- Discriminatory taxes forbidden
- Art. 30 prohibits custom charges of fiscal nature
- Difference between tax and charge is crucial
- Mutually exclusive categories
- ECJ: in order to relate to a system of internal taxation, the charge to which an
imported product is subject must be:
• Imposed at the same rate on the same product
• Imposed at the same marketing stage and
• The chargeable event giving rise to the duty must be the same for both
products
 It is not enough that the objective of the charge imposed on imports is to compensate
for similar charges imposed on domestic products at a production or marketing stage

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prior to that at which the imported products are taxed => ECJ: It then has equivalent
effect because:
• Charged on imported goods by virtue of the fact that they had crossed a
frontier
• Charged at different stage
• No account was taken of fiscal charges which had been imposed on the
products in the member state of origin
• To find otherwise would render the prohibition of charges having equivalent
effect to customs duties empty and meaningless

The prohibition of discriminatory taxation


- Art. 110 TFEU prohibits discrimination in favour of domestic products
- Also no indirect protection to other products
- Taxation = a general system of internal duties applied systematically to categories of
product in accordance with objective criteria irrespective of the origin of the products

Direct and indirect taxation


- Direct discrimination: where imports and domestic products are deliberately treated
differently and is thus automatically unlawful => canʼt be justifies
- Indirect discrimination: on the face of it imposes the same rule on both domestic and
imported products, but the result is that the import is in fact disadvantaged : may be
objectively justifies
- Also capable of including taxes on raw materials and of the assessment of the tax

Similar or other products


- Criteria whether there is discrimination differ according to whether a case is brought
under
a) Art. 110 (1): similar products ( tax not higher than for domestic products): basis
must also be the same: rates of tax, basis of assessment and rules for laying and
collecting it must be all non-discriminatory
b) Art. 110 (2): other products = covers imported products that may be different but
are nevertheless in competition with domestic products : tax must not have a
protectionist effect. To be caught by prohibition of discrimination it has to be
proved that the taxation has a protectionist effect: direct comparisons are not
possible
- Even where there may be benefits for the imported goods, a difference in the way in
which a tax is levied may be held to breach Art. 110

Similar products
- Levels of tax have to be equalized
- What constitutes similar products?
- Criteria: composition, physical characteristics, method of production, do they meet the
same consumer needs?

Other products
- Can the products be substituted by each other?
- Are the products potentially in competition?

Summary
- Main focus in the future is likely to be on taxation aspects

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Chapter 11: Free Movements of Goods 2 – Non Tariff


Barriers
• Concerned with the attempts of the member states to prevent or hinder imports

Legislation:
• Articles 34, 35 and 36 TFEU
• 34 TFEU: quantitative restrictions on imports and all measures having equivalent
effect shall be prohibited between member states
• 35 TFEU: quantitative restrictions on exports and all measures having equivalent
effect shall be prohibited btw member states

Quantitative restrictions and measures having equivalent effect


• Non-financial barriers to free movement of goods are contained within “quantitative
restrictions and measures having equivalent effect”
• Restrictions or obstacles to free movement are caused by different nat. laws
regulating products and trade
• Main concern is about measures which fall short of a quantitative restriction
• Member states can insist that imported products comply with national standards 
can frustrate attempt to create a genuinely unified single market
• Court of Justice has interpreted principle of free movement of goods as liberally as it
can

The general scope of the Treaty prohibition


• Article 34 TFEU: general prohibition on quantitative restrictions and measures having
equivalent effect on imports
• Article 35 extends prohibition to exports
• Article 36 provides grounds for member states to escape prohibition of Articles 34 and
35
• Article 34 and 35: directly effective, only vertically against measures taken by the
state
• Without state involvement, actions of private parties are outside the direct application
of Articles 34-36 TFEU

What constitutes measures for the purposes of Article 34 TFEU?


• Legally binding acts
• Practices capable of influencing the conduct of traders and consumers
• May include state inaction to prevent private individuals`s actions which obstruct the
free movement of goods
• Term “measures” may also include administrative practices, if they have a certain
degree of consistency and generality

The meaning of quantitative restrictions


• Most obvious examples: complete bans on imports or subjection of imports or exports
to quotas restricting the import or export by quantity or value
• In contravention with art. 34  prohibited!!
• Prohibition on quantitative restrictions covers measures which amount to a total or
partial restraint of imports, exports or goods in transit
• Quantitative restriction includes subjecting the import of goods to the condition of
obtaining an import license

Measures having equivalent effect (MHEE)


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• Defined by secondary legislation and by the Court of Justice


• Distinctly applicable measures, that is those which apply to imports but not
domestically produced goods (Directive 70/50)
• Any measure which makes import or export unnecessarily difficult and discriminates
between the two, would fall within the definition
• also covers national marketing rules which on the face of it are non-discriminatory or
“indistinctly applicable”
• Dassonville case: measures having equivalent effect include all trading rules
enacted by a Member State which are capable of hindering, directly or indirectly,
actually or potentially, intra-community trade. The case concerned criminal
proceedings in Belgium against a trader who imported Scotch whisky in free
circulation in France into Belgium without being in possession of a certificate of origin
from the British customs authorities, thus infringing Belgian customs rules. Court of
Justice said that: the requirement by a Member State of a certificate of authority,
which is less easily obtainable by importers of an authentic product, put into free
circulation in a regular manner in another Member State, than by importers of the
same product coming directly from the country of origin, constitutes a measure having
equivalent effect.
o in absence of a community system to guarantee a product`s origin, members
states may take reasonable measures for the protection of consumers in the
area of designation of origin products without necessarily infringing Article 34
TFEU
• scope of prohibition following this definition is extremely wide

Examples of measures coming within the scope of the prohibition


• National promotional campaigns
o Measures which do not have clear visible direct effect may still be caught by
the prohibition in Article 34 TFEU
o Emphasis is on rules which are capable of having an effect rather than those
rules actually having an effect
• Discriminatory national marketing rules
o Marketing rules often impose restrictions on the production, packaging or
distribution of goods, which may infringe Article 34 TFEU
• Product classification
• Exports

Article 36 TFEU derogations


• Article 36 provides exceptions to general prohibition of Article 34
• Application of exceptions is subject to limitation set out in the second sentence of
Article 36 TFEU : Such prohibitions or restrictions shall not, however, constitute a
means of arbitrary discrimination or disguised restriction on trade btw. Member states.

General purpose and scope


• Article 36 provides exhaustive list  cannot be added to
• Art. 36 allows the member states to restrict the free movement of goods for certain
specific reasons only
o Public morality:
 Standard of morality varies from member state to member state; Court
of Justice has allowed for a margin of discretion on the part of the
member states
o Public policy:
 Case R v Thompson: State which prohibits coinage, even when they
are no longer legal tender, and imposes an export ban to prevent their

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destruction abroad, will be justified under Article 36 on grounds of


public policy
 Other attempts by member states to invoke this exception have failed
o Public security:
 Maintenance of essential oil supplies was covered by the public
security exception
o Protection of the health or life of humans or animals
 Frequently argued ground for import restrictions
 Most have been held by Court of Justice no to conform with Article 36
TFEU
 Cases concerned with import bans on the grounds of protecting health
focused on food products and additives have been considered by the
court
 In the absence of any Community regulation of the manufacture and
marketing of products, the member states are free to regulate this
matter as long as they do not infringe the Community provisions
 In cases which are concerned with an import ban raised on the
grounds of protecting the health of the population from harmful
additives following criteria are taken into account:
• Whether the additives were either permitted in another product,
or
• Whether they were lawefully permitted in another member
state, or
• How they are regarded according to the results of international
scientific research, in particular the work of the WHO, and
• The eating habits in the country of importation
 If the additive does not constitute a real danger to public health, a ban
would be a breach of Article 34 TFEU
 A ban would not infringe this article where the same additives are also
prohibited in domestic products and where there is a system to allow
the addition of additives to the list of permitted additives
 States must make out, on the basis of latest scientific data, that a real
risk o health exists
o Artistic heritage
 Artistic heritage does not justify a tax being levied on the export of art
treasures which was therefore held to breach Article 30 TFEU
o The protection of artistic or commercial property
 Article 345 TFEU provides that the Treaty shall in no way prejudice the
rules in member states governing the system of property ownership
 Complementary competition law policy of great importance as it is vital
to the successful running of the internal market
 Competition policy within the overall Treaty regime prevents
companies from setting up their own rules and obstacles to trade to
replace the national rules and obstacle the Community is trying to
abolish
o Article 36 TFEU second sentence
 Measures taken by member states must be proportionate
 Provides a backstop for the Court of Justice to ensure that any claims
do confirm with the overall desire to ensure and promote the free
movement of good within the EU internal market
o Decision 3052/95 and Regulation 764/2008
 Attempt to regulate the introduction of measures by member states
better

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 Decision has been replaced by the regulation


 Required member states to inform Commission about measures which
may lead to the refusal of the import of goods
 Commission then informs the other member states

Equally applicable measures (indistinctly applicable measures)


• Measures which apply to imports or exports only are called distinctly applicable
measures
• Article 34 TFEU can also challenge national rules which on the face of it make no
distinction between domestic and imported goods  termed equally or indistinctly
applicable
• Article 3 of Directive 70/50 provides that measures which are equally applicable to
domestic and imported goods will only breach Article 34 TFEU where the restrictive
effect on the free movement of goods exceed the effects necessary for the trade rules
• This directive also covers measures governing the marketing of products which deal,
in particular, with shape, size, weight, composition, presentation, identification or
putting up
• Member states can require importers to satisfy certain rules providing that article 34
TFEU may not be contravened
• The Dassonville case introduced the possibility that the member states could restrict
imports for a good reason and marked the foundation of the so-called rule of reason

The Cassis de Dijon case


• Concerns a prohibition on the marketing in the Federal Republic of Germany of spirits
with less than a 25 per cent alcohol content
• Crème de Cassis de Dijon contains usually only 15-20 %
• Did not make a distinction between national and foreign drinks
• Germany argued that lower alcohol liquers would lead to alcohol tolerance thus
leading ti health problems in the futre
• Court held that obstacles to the free movement of goods resulting from disparities in
the national laws on the marketing of products must be accepted as far as these
provisions are necessary to satisfy certain mandatory requirements
• Subject to the principle of proportionality
• Must neither be an arbitrary discrimination nor a disquised restriction on trade
• Makes clear that Article 34 TFEU also covers indirect discrimination

Examples of acceptable mandatory measures


• The national rules which may be raised by the member states, suggested by the
Court of Justice in Cassis de Dijon were:
o The effectiveness of fiscal supervision,
o The protection of public health,
o the fairness of consumer transaction and
o the defense of the consumer
• non exhaustive list and added to in other cases (p. 275)

The application of the rule of reason: the requirements in detail


• once it has been established that the interest comes within the rule of reason, the
criteria of the rule of reason must be satisfied as follows
o There must be no Community system covering the interest in question
 EU legislation must not have occupied the field and there must be no
harmonizing EU legislation
o The measure must be indistinctly applicable

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 The measure must apply without difference on the face of it to both


imports and domestic products
o The measure must be neither an arbitrary discrimination nor a disguised
restriction on trade
o The measure must meet the requirements of proportionality

Technical standards
• Directive 98/34 requires member states to notify technical standards of products
being adopted  Commission can consider whether barriers to free movement are
created
• Avoid piecemeal litigation
• No created for individuals, but has been used in some cases

Summary of Cassis de Dijon


• Classifies measures falling outside the scope of Art.34 TFEU
• Measures which would otherwise have breached Art.34 TFEU because the ability
given to the member states to rely on mandatory requirements provides in effect,
further derogation to Art.34 TFEU
• Allow MS to maintain rules which protect a particular interest
• Often unclear whether national mandatory requirement fell outside or would breach
Art. 34 TFEU
•  blurring distinction between distinctly and indistinctly applicable
• Distinctly  consider derogations of Art. 36 TFEU
• Indistinctly  consider mandatory requirements or an derogation in Art.36 TFEU
apply
• Dual burden rules  breach of Art.34
• Equal burden rules in import and domestic goods  national courts decide whether
mandatory requirement was worthy of protection

Equal burden and dual burden


• Indistinctly  applies to imported and domestic goods alike
• Same rule as equal burden on products
• Additional burden  imported product has to comply with two sets of product
requirements in order to be marketed lawfully in the state of import
• State of origin and state of importation
• Margarine case: further types of packaging required, unfair to comply with two set of
rules (Art.34 applies unless caught by Art.36 or rule of reason mandatory
requirements
• Equal burden rule: burden of the rule in question applies to imported and domestic
goods (allowed by Art.34), no discrimination or disadvantage
• Cassis de Dijon: beneficial to free movement AND allows national diversity for
regional variations under the mutual equivalence rule
• Reason and mandatory requirements rule : recognizes national interests and
concerns
• National law questioned did not hinder imports but affected the volume of trade
regardless of origin
• Ban on Sunday trading justified under Art.34
• Question: Court of Justice did go too far  upholding sancity of free movement over
national rules by finding every obstacle to free movement and not only discriminatory
and protectionist measures in breach of Art.34
• Unless justified by Art.36

Keck and Mithouard: certain selling arrangements

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• Keck: French prohibition of goods at a loss which was argued to be restriction of


sales contrary to Art.34  re-examine and clarify case law
• Traders try to challenge law which were not aimed at restricting imports but restricted
the sales of all goods, domestic or imported
• Selling or marketing arrangements  Dassonville or Art.34 does not apply
o “application to products from other MS of national provisions restricting or
prohibiting certain selling arrangements is not such as to hinder directly or
indirectly, actually or potentially, trade between MS within the meaning of the
Dassonville judgment provided that provisions apply to all traders and that all
traders are affected in the same manner”
• Permit national rules that were introduced for reasons other than restricting or
discriminating imports (fall then outside Art.34)
• No definition what “certain selling arrangements” are

Post-Keck case law


• selling arrangements = rules relating to market circumstances in which goods are
sold, equal burden rules, fall outside scope of Art.34
• where, when, how and by whom are goods sold
• not rules relating to shape, size, weight, composition, presentation, identification
(breach of Art.34 unless otherwise justified)
• some selling arrangements (equal burden + not relating to physical characteristics) 
disadvantaged imports by hindering market access
•  different impact on imported goods than on domestic goods (then breach of Art.34)
• New test required

Market access or discrimination or both?


• Market access hindered OR
• Selling arrangement is despite discriminatory/ different impact (make access to
market more difficult)
• Then: barrier to import
• Can be justified by Art.36 or Cassis de Dijon rules
• Different impact  affecting imports more than domestic products, restrictive market
access, effective result is discriminatory (but need for clarification)

Summary
1) Art.34 prohibits the restrictions of imports and all measures having equivalent effect. A
national rule which offends this Article may be justified under either
2) Art.36 derogations OR rule of reason in Cassis de Dijon both are subject to
3) The second sentence of Art.36 and the principle of proportionality unless
4) The rule is shown to be selling arrangement under Keck in which case it does not offend
Art.34 however
5) If a selling arrangement adversely affects imports more than domestic products or
prevents market access, if will offend Art.28 unless
6) Justified by either Art.36 OR rules of reason in Cassis de Dijon
• Certain national rules could escape the prohibition of Art.34, but strict criteria so that
new possibility cannot be exploited

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Chapter 12 – The free movement of persons


The legal framework – primary and secondary legislation

Introduction
• Community law was originally concerned with the free movement of economically
active persons only
• Free movement of persons is now a much wider concept and includes the rights
provided by European citizenship
• A particular feature of this area of law is the extensive rights which apply to the family
members of the EU citizens
• Integrate into these aspects are the provisions of Directive 2004/38
o Has consolidated previous secondary legislation and case law
o Has introduced amended and new rules relating to those taking advantage of
free movement rights
• Without providing for the free movement of persons, the development of economic
activities, the balanced expansion and accelerated raising of the standard of living
would not be possible
• Capital needed to take advantage of freely movable labor without boarder restrictions
• By ensuring the free movement of workers across the member countries of the
Common Market, capital can easily import labor when required
• A basic definition of the internal market is outlined in article 26

Treaty provisions
• Article 3(2) TEU
• Article 20(2) TFEU
• Article 26 TFEU
The following articles outline the basic requirements to facilitate the free movement of the
economically active:
• Article 45-48 TFEU
o For workers
• Article 49 – 55 TFEU
o For those wishing to establish services
• Article 56-62 TFEU
o For those wishing to provide services

The basic right of non-discrimination


• There shall be no discrimination on grounds of nationality (Article 18 TFEU)
• The article has been highly influential in the development of this area
• Outlawed various discriminatory rules and practices by member states and
organizations

Indirect discrimination
• Concept of discrimination does not only cover direct discrimination in which different
rules apply to nationals and non-nationals
• Concept of discrimination also covers covert or indirect discrimination which leads to
the prejudicial treatment of non-nationals
o Rules which seem to apply fairly to both but which have an indirect
discriminatory effect on non-nationals

Hindering market access

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• There have been attacks on national rules which are regarded as inappropriate
because they are seen to hinder access in taking up opportunities  restricting
movement
• For persons the prohibition of harmful rules goes beyond discrimination to cover rules
which impede market access

Who may claim the rights of free movement?


• Personal scope
o Nationality
o Whether the person concerned is a worker or self-employed by establishing or
providing services or is otherwise entitled to enter and remain in the member
state
• Material scope
o Determined largely by secondary legislation
o Concerns the actual rights provided

Nationality
• For workers and the self-employed, the right to move freely and obtain other benefits,
is initially dependent on being defined a national of one of the member states
o Article 45 TFEU
 Secures freedom for workers of the member states
o Article 49 TFEU
 Establishment
• Also includes legal persons (such as companies)
o Article 56
 Services
• The actual determination of member state nationality is a matter for each of the
member states
• It is not necessary for the members of a workerʼs family to be member state nationals
to obtain benefits

Union status as a worker or self-employed


• The second part of the law is that in order for a person to benefit personally or for
their family to benefit from rights arising under Articles 45 -62 TFEU and law made
thereunder, the person needs to be classified as a worker or self-employed person
• Definition of these concepts is a matter for EU law
• There is no definition of a ʻworkerʼ in the treaty, but the term must have a Community
meaning and cannot be subject of differing interpretations
• ʻ A worker is any employed person, irrespective of whether he is a wage-earning or
salaried, blue collar or white collar, an executive or unskilled labourerʼ (Case 75/63
Hoekstra v BBDA)
• Extend in subsequent cases to include
o part-time workers,
o work seekers,
under certain circumstances ,
o those undertaking a period or course of study and those who were effectively
self-employed but nevertheless included by the ECJ

Part-time work
• The essential defining characteristic of work is that it is activity of an economic nature
( Case 53/81 )
• If a person is in effective and genuine part-time employment he may not be excluded
from the sphere of application of the rules on freedom of movement of workers merely

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because the remuneration he derives from it is below the minimum level of


subsistence set by nation law (Case 139/85)
• It is irrelevant whether the supplementary means of subsistence are derived from
property, from the income of another member of his family or from public funds of the
member state of residence
• It appears to present the member states with the discretion to define who is a worker,
although the national courts are obliged to follow EU law in this respect and in
particular the criteria as developed by the ECJ in its case law
• Case 66/85 laid down three essential characteristics to establish an employment
relationship
o The provision of some sort of service
o For and under the direction of another person
 i.e. not self-employed and in return for remuneration
• it can be argued that the definition of worker is of lesser importance now in that if the
person involved is nevertheless entitled to receive the rights or benefits claimed, the
status becomes irrelevant
• the term ʻworkerʼ is wider than just referring to those in employment and in certain
circumstances also applies to those who are seeking work and to those who, having
lost one job involuntarily are capable of taking another

Work seekers
• Court of Justice held that the benefits provided by legislation on free movement were
only for those in actual employment and not for those who migrate in search or work
and have not found it (Case 316/85)
• After the expiry of a reasonable period depending on the circumstances, persons may
no longer be afforded the status and benefits of worker under Community law and
may lawfully be deported by the member states
• Article 7 (3) of Directive 2004/38 makes it clear that workers and also the self
employed may retain their status and right to remain in the circumstances listed in the
article
• Directive 2004/38, Article 14 further provides that residence may be retained
providing the persons concerned do not become an unreasonable burden on the
social assistance of the host state

Worker training, education and benefits


• A further extension to the scope of the term ʻworkerʼ took place in favor of those no
longer in employment, but who were employed previously but became engaged in
some form of study
• This category is rather limited
• New cases are very often cross-over cases in that they deal with both a consideration
of a specific aspect such as whether the person is a worker, or work seeker or
entitled student but now wrapped in the context of citizenship
• Definitions of what constituted vocational training and the link to work are crucial for
the determination of the status of a worker and the consequent benefits and rights
• Case law is confirmed by Directive 2004, Article 7(3)(d)
o Provides that the status of worker is retained if the EU citizen embarks on
vocational training which is related to the previous employment
• Even if a person is confirmed a job seeker, social assistance may be denied

Self-employed
• ʻThe formal classification of a self-employed person under national law does not
change the fact that a person must be classified as a worker within the meaning of
that article if his independence is merely notionalʼ ( Case C-256/01)

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The scope of establishment and the provision of services


• Self-employed are granted rights under the treaty to move to another member state to
establish either
o permanently or on a long-term basis (Art 49-55 TFEU)
o or to provide services temporarily (Art 56 -62 TFEU)
• the definition of the personal scope of establishment and for the provision of services
are much more straightforward than for workers
• Article 49 TFEU
o Deals with rights of freedom of establishment as the right to enter another
member state and stay on a long-term of permanent basis
o To take up and pursue activities as a self-employed person
o To set up and manage undertakings
o Includes legal as well as natural persons
• ʻthe actual pursuit of an economic activity through a fixed establishment in another
member state for a indefinite periodʼ (Factortame)
• Services under Article 56 TFEU envisages a temporary state of affairs, and
appearance, if at all, in the host state would only be for a limited period to provide
specific services
• Concept of services is defined in Article 57 (1) TFEU
• Also specifically includes activities of industrial and commercial character and those
of craftsmen and professions
• The scope of the term services has been held by the Court of Justice to include
recipients of services
• The distinction between services and establishment can be difficult to ascertain
• The person providing a service may, in order to do so, temporarily pursue his activity
in the State where the service is provided, under the same conditions as are imposed
by that State on its own nationals ( Case 205/84 Commission v Germany (Insurance
Services)

The material rights of free movement


• Treaty articles 45,49,56 TFEU
• Secondary law
• Each free movement section has its own Treaty base to empower the enactment of
secondary legislation
a) Workers: Art. 46 TFEU
b) Self-employed: Art. 53 and 59 TFEU
• Legislative function carried out by EP and Council on Commission proposals
• New focus on new provisions
• Right for workers amplified and supplemented by Directive 64/221, Regulation
1612/68 and Directive 2004/38 => new rights for family members
• Regulation 1612/68: equality of access to employment for all Community nationals, in
employment rights, housing rights, education of children
• Directive 2004/38: main and most important provision of secondary legislation for free
movement of Union citizens. Citizens can be joined by their families. Covers workers
and self-employed. Should define family members and who else should have rights.
Establishes permanent rights of residence for citizens after certain periods. Restricts
member stateʼs rights to refuse entry on the grounds of public policy

Rights of entry, residence and exit


• governed by combination of Art. 45(3) TFEU, Regulation 1612/68 Arts. 1-5 and
Directive 2004/38 Arts. 4-14
• Regulation 1612/68:

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a) Art. 1-2: Right to take up employment in host state like nationals, prohibit
discrimination
b) Art. 3(1): linguistic requirements allowed according to nature of the post to be
filled: must be proportionate
• Directive 2004/38:
a) Art. 4: citizens can leave with valid ID, Visa or other formalities
b) Art. 5: member states cannot demand visas from EC nationals but can require
passport or ID from non-national family members
c) Art. 6: right to enter, travel, reside in host member state for 3 months by EU
citizenʼs family: not restricted to economically active citizens
d) Art. 7: If they stay longer than 3 months: conditioned on being engaged in a
gainful activity, being self-employed, recipient of education or being self-sufficient
with comprehensive sickness insurance cover ( registration certificate can be
demanded )
e) Art. 25: registration certificate and residence permit are not preconditions for
residence, merely evidence. Deportation on this ground is regarded as
disproportionate.
f) Art. 11+22: permit valid for 5 years. Territorial restrictions are allowed as long as
they are also valid for nationals of the member state
g) Art. 15: Expiry of documents = no ground for expulsion
h) Art. 14: involuntary unemployment = no ground for expulsion. Favored status lost
after 6 months. Whether deportation is allowed then is doubtful
The rights provided by Regulation 1612/68 and Directive 2004/38
• most supportive of free movement
• details access to employment, rights for workers and their families
• all the rights are applied to non EC-member state family members = Third Country
Nationals (TCNs)
• Art. 18 TFEU: prohibits discrimination against workers on grounds of nationality and
specifically on mentions terms and conditions of employment, dismissal and, where
relevant, reinstatement
• When a worker does the same job as previously in his home member state, this
service may count for advantages in the host state => otherwise discrimination

Social and tax advantages under Art. 7(2)


• Wide scope: equality in social and tax advantages which also apply to the family of
the worker
a) Same as national workers
b) Family open to wide interpretation
• Examples: unemployment benefits, own language used before court, grant to cover
funeral expanses where this is done for nationals, invalidity allowance
• Applies only to workers and not to nationals of member states who move in search of
employment

Family members
• Rights of Union national also apply to family members defined in Article 2
 Spouses
 Registered partners ( have to be regarded as equal to married spouses in
home state)
 Descendants
 Ascendants
• Art. 2(k) descendants and ascendants of spouse and partner also included ( widens
the scope)

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• Art. 3: also family members who are in the country from which they come dependants
or members of the household of the Union citizen having their primary right of
residence or where there are serious health or humanitarian grounds for doing so
• Members can have any nationality
• Children under 21 and adult children above, when they are dependent
• Dependency= factual situation of support provided by the worker ( Lebon-Case)
• Castelli v. ONPTS: though a mother of an Italian worker has never worked in Belgium,
she was entitled to install with her son and therefore old age pension
• Cohabitees do not have rights in their own right but the companionship of a cohabite
is merely regarded as one of the advantages to which workers are entitled
• Same sex partner rights: where national law supports this, EC law will demand that
other Community nationals are equally treated and where national law does not
support such rights, EC law cannot impose them on member states
• The rights of a spouse have been held not to be dependent on residence with the
entitled worker
• Baumbast case: divorce will bring to an end the spousal relationship for the purpose
of free movement rights => This means that the right to remain in the host state would
also be brought to an end unless saved by any other reason.
• Divorce does not affect the right to remain in the host state when:
 Spouse is a national of another member state
 Where the marriage or relation has lasted 3 years including 1 year in the host
state
 Where the person is a carer of the Union citizenʼs children
• Not applicable where a marriage of convenience has been arranged to circumvent a
member stateʼs immigration laws
• Art. 23 of Directive 2004/38 entitles the family members of an entitled union citizen to
take up any activity as an employed person to include any activity or profession,
providing that the appropriate qualifications and formalities are observed

Workerʼs family education and career rights


• Art. 12 of Regulation 1612/68 provides that the children of a member state host
worker shall be admitted to general educational, apprenticeship and vocational
training courses under the same conditions as nationals
• Casagrande Case: equality of measures intended to facilitate educational attendance
• Gaal Case: ECJ extended the right under Art. 12 to an independent and over 21 year
old child of a migrant worker who had been employed in another member state. Art.
12 extends to all forms of education including university education and must include
older children no longer dependent on their parents. Case was decided on the basis
that the child must have lived at some time with a parent who was an EC worker and
thus derived his rights in this manner.
• Art. 12 provides rights for carers of Union citizen children who are receiving education
• If a child is an EU national with a right to remain but was below school age and thus
unable to care for herself, the TNCs gain the right to remain in the country ( Chen
Case)

Right to remain
• Art. 45(3) provides the right to remain after retirement or incapacity and applies also
to members of the family even if a worker dies
• Art. 12 ( Directive 2004/38): Union citizenʼs death or departure from the host member
state shall not affect the right of residence of his family members who are nationals of
a member state and also to non-member state family members who were living with
the Union citizen for at least one year before his death

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• Art. 13: divorce, annulment of marriage or termination of the partnership or


relationship shall not affect the right of residence ( non nationals of member states
are subject to the requirement that the marriage or partnership has lasted at least
three years, one being in the host state or where the spouse or partner has custody of
family children or is warranted by particularly difficult circumstances)
• Art. 14: right to remain further dependent on the persons considered not being a
burden on the host state
• Permanent residence requirements described in Articles 16,17,18

Free movement of the self-employed


• The initial approach of the Commission was the harmonization of rules by the
adoption of a programme of Directives to abolish the restrictions of free movement,
and the mutual recognition of qualifications in all sorts of trades and professions on
an occupation-by-occupation basis => slowly

The intervention of the Court of Justice


• Cases were starting to reach the ECJ concerned with self-employed persons who
were facing severe restrictions in trying to practice their professions in another
country
• It was previously assumed that secondary legislation was necessary before the rights
of free movement could be fully realized; however, the ECJ decided the cases on the
basis of the Treaty Articles themselves and on the basis of the general prohibition of
discrimination
• Reyners v. Belgian State: nationality could be no barrier to appropriately qualified
lawyers entering a country to practice
• Van Binsbergen: Art. 56 TFEU directly effective and was not conditional on the issue
of a subsequent Directive in respect of specific professions, nor on a residence
requirement in Holland
• ECJ opened the way for the basic Treaty rights to establish and provide services in a
host state to be enjoyed without discrimination or the imposition of unnecessary
requirements and on the basis of direct effects of the Treaty Articles themselves.
• Thieffry v. Paris Bar Council: where the competent authorities have recognized a
foreign diploma as equivalent to a domestic qualification, recognition of that diploma
may not be refused in an individual case solely because it is not a diploma of the host
state
• Commission v Germany: member states are under a duty not only to eliminate all
discrimination based on nationality but also all restrictions based on the free provision
of services on the grounds that the provider is established in another member state
• Säger v Dennemeyer: not just discriminatory rules are prohibited but any rules which
are liable to prohibit or otherwise impede persons providing a service which they
already lawfully do in the state of their establishment. Laws applying to the temporary
provision of services must be justified by an imperative reason relating to the public
interest.
• Gebhard : measures which hinder or make less attractive the exercise of fundamental
freedoms must fulfill 4 conditions:
1) Non discriminatory in application
2) Justified by imperative reason relating to the public interest
3) Suitable to secure the objective sought
4) Proportionate
• Vlassopoulou: national authorities must take into account qualifications and
experience which fall short of full qualification and undertake a comparison of the
qualifications to see if they are the equivalent of the national requirements and not to
dismiss them out of hans

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• Establishment is now very close to services

Legislative developments

Mutual recognition
• Commission decided that it was not necessary to issue Directives for each individual
trade and profession
• First general Directive: Mutual Recognition of Diplomas Directive 89/48: applied to
numerous professions, excepting those subject to specific Community Directives, who
have completed a period, a minimum of three years, of post-secondary education and
professional training, and which are regulated under national law or subject to the
requirement of a diploma or other similar professional qualifications, the equivalent of
a diploma.
• Applied to professionally qualified persons as opposed to those who have only
completed university
• Includes workers
• Now replaced by Directive 2005/36

The free movement of lawyers

The provision of services of lawyers


• Directive 77/249 is limited to the recognition of practicing lawyers from member
states, who must be accepted based on understanding that the training of lawyers in
other member states is similarly strict as in the host state
• Art. 5: for the pursuit of activities relating to the representation of a client in legal
proceedings, a member state may require lawyers…to work in conjunction with a
lawyer who practices before the judicial authority in question and who would, where
necessary, be answerable to that authority

Establishment by lawyers (Practice under Home Title )


• Lawyers Home Title Directive: Art. 2: any lawyer shall be entitled to practice in any
other member state under his home country professional title as an independent or
salaried lawyer on a permanent basis
• Art. 3: they only need to register with the competent authority in the host member
state on the basis of their registration in the home member state
• Art. 5: host lawyers may give advice on the law of his home member state, on EU
law, international law and on the law of the host member state. They must comply
with the rules of procedure applicable in the national courts
• Easier way than aptitude test to establish in another member state

Establishment by laywers (Practice under Home Title)


• Laywers Home Title Directive 98/5 OJ 1998 L77/36
o Article 2
 Laywers shall be entitled to practice in another MS under his home
country professional title as an independent and salaried lawyer on a
permanent basis
o Article 5
 Host lawyer may give advice on the law of his home member state, on
EU law, intl law and the law of the host member state
• Case Morgenbesser:
o National authorities are obliged to compare the applicant`s professional
knowledge, as certified by his or her qualifications or acquired through

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professional experience either in the member state of origin or in the host


member state, with the professional knowledge required by natl. law

Derogations from the free movement regimes

Procedural safeguards
o Directive 2004/38
 Article 31: provides a number of procedural rights which further
support free movement by providing for non-discriminatory rights of
appeal, rights to remain to hear the appeal result, to be given reasons
for deportation and judicial review of decisions
 Article 30: grounds for deportation must be precisely and
comprehensively stated
 Article 30(3) provides the right to be notified of any decision to expel or
the refusal of a permit and should also state the minimum period given
to leave the country which cannot be less than one month
 Article 31: there should be a system for appeal against decisions on
their merits as well as legality
o Case Adoui and Cornauille v. Belgian State:
 Reasons for expulsion must be sufficiently detailed to allow a migrant
to defend their interests and be drafted in such a way and language as
to enable the person to comprehend the content or effect

Restrictions on the grounds of public policy, security and health


o Article 45(3) TFEU: MS are able to restrict entry and deport EU nationals on
the grounds of public policy, security and health
o Applies to workers and self-employed
o Directive 2004/38
 Article 27(2)
• Measures taken on grounds of public policy or public security
shall comply with the principle of proportionality , shall be
based exclusively on the personal conduct of the individual
concerned
• Personal conduct may not be considered a sufficiently serious
threat unless the member state concerned takes serious
enforcement measures against the same conduct on the part of
its own nationals
 Article 28(2)
• Removal decisions cannot be taken against Union citizens or
family members, irrespective of nationality, who have the right
of permanent residence within its territory against family
members who are minors
 Any deportation orders must be subject to review for possible lifting
under Directive 2004/38, Article 32, at least 3 years after being made
o Case- Van Duyn vs. The Home Office
 Restrictions on the grounds of public policy must be interpreted very
strictly and be subject to judicial review
 Personal conduct must be an act or omission to act on the part of the
person concerned and must be voluntary
o Case Antonissen:
 Lack of employment and the lack of any serious chance of obtaining
one would justify expulsion
o Public health measures are given further definition in Article 29 of the Directive

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Employment in public service


• 45(4) TFEU exempts employment in the public service from the provisions of Article
45 TFEU
• Applies to entry but not to conditions of employment
• Occasionally restrictions are accepted by the Court of Justice
o E.g. Anker et. al
• Equivalent of the public service exception for establishment in Art. 51 TFEU
o For “positions concerned with the exercise of official authority

Summary
• EU law provision of free movement has changed considerably from its inception
• Scope has expanded considerably
• More general rights of free movement have been introduced into the EU legal regime
not dependent on an economic activity

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