Internal Market and EU Citizenship PDF

The internal market and EU citizenship EU LAW (Global Law) a. a. 2024/2025 PROF. AVV. LUCA CALZOLARI, PH.D, LL.M 0 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishmen...

The internal market and EU citizenship EU LAW (Global Law) a. a. 2024/2025 PROF. AVV. LUCA CALZOLARI, PH.D, LL.M 0 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 1  Preliminary remarks  The establishment of a common/single/internal market has always played a central and fundamental role in the process of European integration  Although nowadays the concept is much wider, the notion of internal market is firmly rooted in the four basic economic fundamental freedoms (≠ from fundamental rights) concerning the free movement of goods and the other means of production (labor, services, capital)  Specifically, the notion of the internal market related to the creation of 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” (Art. 26(2) TFEU)  The establishment (and maintenance) of the internal market is regulated by the Lisbon Treaty in Part III of the TFEU  Title I of Part III, called “Internal Market” replaces the former notion of “common market”  No application of "de minimis" principle = the Court of Justice has always reiterated that the articles of the TFEU relating to the free movement of goods, persons, services and capital “are fundamental Community provisions and any restriction, even minor, of that freedom is prohibited” (e.g. case C-49/89, Corsica Ferries France, § 8) 2  Negative vs positive integration  As already discussed, the internal market was achieved through a long process of gradual and progressive integration  In the first phase of this liberalization process, the so-called negative dimension of integration between the internal markets and the regulation of economic activities at the national level prevailed.  In this phase, much attention was placed on the elimination of barriers posed by Member States to trade in goods, persons, services and capital, with a series of prohibitions imposed on Member States, on the one hand, and a cautious and limited use of the relevant exemptions, on the other.  In a second phase, beginning in the 80’s, however, there was a shift to positive integration, as a result of the publication of the White Paper on the Internal Market and the stipulation of the Single Act.  These documents aimed, in particular, to speed up the process of realization of the internal market, acting mainly on two aspects, such as  the complete and definitive elimination of technical, physical and fiscal frontiers between the markets of the Member States and  the harmonization of indirect taxation, with a view to eliminating distortions to competition.  In this perspective, the Single Act intervened, in particular, in the following terms:  substitution, in relation to significant hypotheses, of the majority criterion for that of unanimity;  prefiguration, for certain themes, of the instrument of the regulation instead of the directive;  applicability, by the Council, in the absence of harmonization, of the criterion of mutual recognition of national regulations in certain areas. 3  The continuous increase of the number and scope of so called ancillary competences  The initiatives directly aimed at fostering the free movement of goods and other means of production have also been accompanied by a gradual increase in the competencies granted to the Union in matters related to the internal market (e.g., consumer protection, environment protection, etc.)  This has occurred mainly as a result of the so-called flanking policies set forth in the aforementioned Single Act and, later on, in the Maastricht Treaty  The notion of the internal market, therefore, now goes far beyond the realization of an area in which the full mobility of goods, services and factors of production, as well as the substantial equality of the conditions of competition for businesses, are guaranteed.  The notion of the internal market, indeed, also includes that set of instances (protection and promotion of labor, women and youth, the environment, culture, disadvantaged areas, etc.) that are the common heritage and characteristic of modern democracies. 4  Common features of the four fundamental freedoms Prohibition of national restrictive measures  With regard to all the four fundamental freedoms, the basic principle is that Member States shall not restrict the free movement of goods, services, persons, etc.  These prohibition are written in very clear, precise and unconditional terms, so to have an immediate preceptive content and, as such, they are certainly susceptible to have direct effect.  The ECJ has always followed a particularly extensive approach to the interpretation of these prohibitions, with a view to maximizing their liberalizing effect.  Thus, the addressees of the free movement rules are the Member States (and partly the institutions of the Union, in the sense that secondary legislation aimed at restricting fundamental economic freedoms could not be adopted).  Individuals (natural and legal persons), on the other hand, are not included among the addressees of the prohibitions relating to the regime of free movement of goods and other factors of production (with exceptions e.g., UEFA)  Thus, for example, a commercial distribution contract or an agreement between companies that has as its object or effect to restrict the free movement of goods 5 cannot be assessed under the free movement rules, but only and solely under competition rules  Common features of the four fundamental freedoms(2) Widespread use of the ban on discrimination  Both direct and indirect discriminations are prohibited  Direct discriminations are those kinds of discrimination which are based on element such as the national citizenship (for natural persons), the place of establishment (for legal persons) or the origin/place of production (for goods) or, in any case, on other criteria identified by the Treaties  Indirect discrimination are those kinds of discrimination which are based on criteria other than those considered above which, however, can be met exclusively or predominantly by the nationals or national goods of the State concerned, so that, in the end, they affect nationals and goods from other Member states.  In other words, both formal and material discrimination are therefore prohibited:  formal discriminations occur when a Member State treats its own national and those of other MSs differently;  material discriminations occur when a Member State treats its own nationals and those of other MSs in the same manner, but without taking into account the diversity of the starting situations.  In other words, the prohibition includes so-called indistinctly applicable measures that, although not discriminatory - may hinder free movement (e.g., technical obstacles to trade in goods, caused by the persistent diversity of technical regulations in force in the various member states). 6  Common features of the four fundamental freedoms(3) Possible justifications  The existence of a prohibition does not mean that all restrictive measures are incompatible with the Treaty  There are in fact possibilities for Member States to justify restrictive measures  This applies both to distinctly (discriminatory) and indiscriminately (neutral) applicable measures  The possibilities for justifying distinctly applicable measures are provided directly and exhaustively by the Treaty (e.g., reasons of public morality, public order, public security, protection of health and life of persons, etc.),  The possibilities for justifying indiscriminately applicable measures are broader and include the so-called proportionality test created by the Court of Justice  indirect discriminations can indeed be justified on the basis of specific and objective reasons of general interest, provided that the requirements of (a) necessity, (b) appropriateness and (c) proportionality of the restrictive measure are met. 7 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 8  The free movement of goods The legal regime of the free movement of goods is composed by three main and distinct areas.  Articles 34-37 TFEU prohibit quantitative restrictions and measures having equivalent effect between Member States;  Art. 28 and ff. TFEU prohibit customs duties and charges having equivalent effect between Member States and establish that a common customs tariff is adopted by the Member States in their relations with third countries  Article 110 TFEU, although included in a title of the Treaty regulating “fiscal provisions”, concerns the prohibition of discriminatory or protectionist internal tax measures, and, in this sense, is meant to have complementary function to the rules on the abolition of customs duties. What is a good? the notion of goods includes all products that can be valued in money and as such are capable of being the subject of a commercial transaction (Commission v. Italy, judgment Dec. 10, 1968, Case 7/68, para. 2) 9  The prohibition of quantitative restriction and of measures having an equivalent effect  Imports = under Article 34 TFEU, “quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States”.  Exports = under Article 35 TFEU then states “Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States”  Less applied, but think about what happened at the beginning of the pandemic crisis  Exceptions and possible justifications (for distinctly and indistinctly applicable measures) = under article 36 TFEU, “the provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States” = it is a list having exhaustive nature  For indiscriminately applicable measures, the10so-called proportionality test is added (open)  The notion of quantitative restrictions  The notion of quantitative restriction is undoubtedly the easiest to be interpreted  The preceptive content of the aside “quantitate restriction” is indeed clear, and includes any absolute or partial prohibition (such as and any form of quota or contingent)  There are no particular hermeneutical problems, and the Court has had occasion to clarify that by specifying that “the prohibition of quantitative restrictions and measures having equivalent effect covers any total or partial prohibition on imports, exports of goods in transit and any encumbrance having the same effect” (see case 2/73, Geddo) 11  The notion of a measure having an equivalent effect to a quantitative restriction: the so-called Dassonville formula  According to the Court, the term “measure” includes any act or conduct (active or omissive) that is referable to public authorities, and not to private individuals.  However, the most interesting aspect is undoubtedly the notion of “equivalent effect”  This issue was addressed by the ECJ with respect to import measures in the famous Dassonville judgment, where it was clarified that “all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-community trade are to be considered as measures having an effect equivalent to quantitative restrictions (so- called Dassonville formula)  It follows that, as already noted, not only the intensity but even the existence of a restrictive effect of the measures is irrelevant: even measures that may hinder trade between Member States to a minimal degree are included in the prohibition (there is no de minimis threshold, differently from competition provisions).  The obstacle to trade can also simply be of an indirect or potential nature: it is not necessary to show that the national measures actually affects imports, nor that it has actually caused a decrease in imports 12  Distinctly applicable measures ….  As noted above, measures of equivalent effect can be either  distinctly applicable (i.e. measures that apply only to imported goods) or  indistinctly applicable (i.e. when they affect any goods in the territory of the Member State, regardless of the origin)  Initially, the ECJ had dealt only with distinctly applicable measures, consistently sanctioning their prohibition under Article 34 TFEU, even when the restrictive effect was minimal (subject to the possibility for Member Stets to invoke the derogation provided for in Article 36 TFEU, if the conditions were met).  For example, the following national measures have been considered as measures having an equivalent effect to a quantitative restriction:  Rules make importation subject to the issuance of a special license;  Rules subject imported goods to systematic health checks at the border;  arrange for imported second-hand cars to undergo non-essential roadworthiness checks;  require documents and certificates not required for corresponding domestic goods;  require domestic operators to purchase a certain percentage of products of domestic origin;  measures that prevent or otherwise make parallel imports 13 less easy:  … indistinctly applicable measures  Subsequent case law has then clarified that even indistinctly applicable measures can and shall be considered measures of equivalent effect and, as such, be prohibited.  Technical standards = a particular significant problem has arisen with reference to the so- called technical standards, i.e., those obstacles to the movement of goods caused by the persistent diversity of regulations by which each Member State regulates methods of manufacture, composition, packaging, labeling, naming of products  In the absence of harmonization at the EU level, in fact, the diversity between individual national regulatory standards means that the product manufactured and packaged according to the standards in force in the Member State of production cannot comply with the (different) standard in force in the other MSs.  Question: is it possible to sell a product in the Member State “A” that does not comply with the rules applicable in that state, if the product complies with the standards in force in the Member State “B”, which is the State where the product has been produced? 14  … Indistinctly applicable measures (2)  In the Cassis de Dijon case, the Court established the principle of so-called mutual recognition by noting that: “in the absence of common rules, obstacles to movement within the community resulting from disparities between the national laws relating to the marketing of a product must be accepted in so far as those provisions may be recognized as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision , the protection of public health , the fairness of commercial transactions and the defence of the consumer”  Under the principle of mutual recognition, Member States cannot apply their own technical regulations if those in force in the Member State of production of the goods are equivalent to those of the importing state.  In the Keck case, however, the ECJ established that selling arrangement (e.g. opening hours of shops, rules on commercials and advertising) do not fall within this notion and are therefore not covered by Article 34 TFEU 15  Indistinctly applicable measures and the proportionality test Consequently, Member States wishing to impose their technical regulations on imported products cannot simply argue that the application of these regulations is justified by imperative requirements, having rather the burden of proving that:  Non-harmonized sector = there must be no EU provisions such that national legislation is unnecessary  Measure to be justified must be indiscriminately applicable = the legislation in question must apply indiscriminately to both imported and corresponding domestic products;  Proportionality test = the legislation must be necessary to achieve the intended purpose of general interest and there must be no other less restrictive means of 16 achieving the same result (so-called proportionality test). 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 17  The economic nature of the movement of persons under the Treaty of Rome  The establishment of the common market implies the removal of all obstacles (within Member States) not only to the free movement of goods but also of persons, services and capital.  Under the Treaty of Rome, therefore, individuals were seen only (or at least primarily) as one of the factors of production  Even from the standpoint of their free movement, individuals could benefit of this right only when (and if) they were moving in order to seek to entry into the territory of another Member State to carry out a salaried (free movement of workers) or self- employed economic activity (right of establishment) or if they were otherwise connected with an individual who carried out such activities, for example, by family ties 18  The three fundamental economic freedoms relevant to the movement of people  As, at the origin of the process of European integration, the focus was not on the individual as such but rather on the individual as a subject engaged in an economically relevant activity, three different sets of rules relating to the freedom of movement of persons could be found in the Treaty of Rome  These were the rules concerning:  employees (now Articles 45-48 TFEU);  self-employed persons, permanently established in a Member State other than the one of origin to carry out their activity (now Articles 49-55 TFEU);  self-employed persons, occasionally providing services, in a Member State other than the one of establishment (today Articles 56-62 TFEU). 19  The three fundamental economic freedoms relevant to the movement of people  The three basic economic freedoms (workers, self-employed workers and providers of services) have elements in common but also significant differences:  Common rationale = the three fundamental freedoms all aimed (and still aim) at enabling an effective free movement of natural and legal persons (engaged in any economic activity) within the common market, regardless of whether they are employed or not and regardless of the stable or occasional nature of its exercise with respect to the territory of a Member State)  Different qualitative and quantitative intensity of the contact with the host Member State 20  The expansion of the group of beneficiaries of the free movement rules by the ECJ’s case law  The ECJ has gradually extended the scope of application of the free movement of (working) persons to almost all persons who are nationals of a Member State;  Indeed, the ECJ has interpreted in a very broad way the subjective (e.g., worker) and objective (e.g., services or work activity) categories that make the three economic freedoms mentioned above applicable. E.g.:  Free movement of workers = the scope of application of this freedom has been extended to the pre- and post-employment stage, including for example students and vocational training or job-seekers as well as those who have lost their jobs or retired workers  Freedom to provide services = the scope of application of this freedom has been extended (so much as) to include the possibility to go in another Member State in order to dine at a given restaurant or to visit a shop 21  The “relaxation” of the economic nature of free movement in EU secondary law  The expansion of the scope of application of the fundamental freedoms related to the free movement of (working) individuals has been gradually codified, albeit with certain limitations, also by secondary legislation  Beginning in the 90’s, it is possible to note the development, at least in nuce, of a kind of generalized right of residence and, that is, of a right of movement and residence conferred to individuals even if they were not working.  The reference is mainly to three directives adopted in 1990 (now repealed by Directive 2004/38/EC, on which see below), which concern respectively  General directive = the “right of residence” (90/364/EEC)  Retired individuals = the “right of residence of employed and self-employed persons who have ceased their occupational activity” (90/365/EEC)  Students = the “right of residence of students” (90/366/EEC)  Although with some limitations (e.g., ownership of health insurance and sufficient resources), these acts definitely extended the right of residence to individuals who, previously, could not enjoy it under basic economic freedoms 22  The ( definitive) end of the economic nature of persons’ movement in the EU: the EU citizenship  The economic conception of free movement was finally over with the introduction of the EU citizenship in 1992 by the Maastricht Treaty  1984: Adonnino Committee on "The European of Citizens"  1990: Rome European Council  The EU Citizenship (see Art. 9 TEU and 20 ff. TFEU) is in fact the litmus test of the end of the mercantilist conception of the EU integration process : indeed, citizenship concerns every individual (who is a citizen of a Member State), regardless of any economic consideration  As we shall see, the EU citizenship confers, among other things, on EU citizens a generalized right of movement and residence that derives directly from the status of EU citizen and is therefore:  recognized as a right of the person as such  Unrelated to the performance of any economic activity  Directive No. 2004/38/EC = The right of movement and residence was then implemented at the level of secondary legislation through a comprehensive regime (to which we will return)  CDFUE = Title V of the CDFUE reaffirms the rights conferred to individuals by the EU Union citizenship (and grants new ones), including the right of movement and residence - see Art. 45 CDFUE 23  To sum up …  Employees = Free movement of workers (Art. 45 ff TFEU);  Self-employed individuals = right of establishment (Art. 49 ff TFEU) and freedom to provide services (Art. 56 ff TFEU);  Not working EU citizens = free movement and right of residence conferred to EU citizens and their family members (Art. 20 ff TFEU, Art. 45 CDFUE and Directive No. 2004/38/EC). 24 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 25  The free movement of workers (Article 45 TFEU)  Direct effect = clear, precise and unconditional  Usual set of justification  Content of the right  Limitation for the benefit 26 of civil servants  Beneficiaries of the free movement of workers  Both the concept of worker and the concept of salaried activities are notions of EU law  They cannot be interpreted by reference to national laws  According to the ECJ, “a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration must be considered to be a worker" (C-389/99 Rundgren, § 32)  There are basically three requirements:  Being a national of a Member State  Working in Member State’s other than his/her Member State of origin  Employed nature of the activity carried out, which is the case if the following conditions are met: i) the performance of an economic activity; ii) remuneration; iii) the fact that it is a real and effective activity; iv) being subject to the direction of another person; and v) the non- occasional nature of the service. 27  … and addressees of the free movement of persons  Since this is a fundamental economic freedom, the subjects which shall complied with it are primarily the Member States  However, since very often the labor market is also regulated by acts of a private-sector nature (e.g., trade unions etc.), individuals can invoke the free movement of workers even in connection with such private-sector conventions: «working conditions in the different Member States are governed sometimes by provisions laid down by law or regulation and sometimes by agreements and other acts concluded or adopted by private persons. Accordingly, if the scope of Article 48 of the Treaty were confined to acts of a public authority there would be a risk of creating inequality in its application […]. That risk is all the more obvious in a case such as that in the main proceedings in this case in that, as has been stressed in paragraph 24 above, the transfer rules have been laid down by different bodies or in different ways in each Member State. UEFA objects that such an interpretation makes Article 48 of the Treaty more restrictive in relation to individuals than in relation to Member States, which are alone in being able to rely on limitations justified on grounds of public policy, public security or public health That argument is based on an false premiss. There is nothing to preclude individuals from relying on justifications on grounds of public policy, public security or public health. Neither the scope nor the content of those grounds of justification is in any way affected by the public or private nature of the rules in question. Article 48 of the Treaty therefore applies to rules laid down by sporting associations such as URBSFA, FIFA or UEFA, which determine the terms on which professional sportsmen can engage in gainful employment›› (C- 415/93, Bosman, §§ 84-87). 28  The (basic) content of the freedom conferred to workers  As mentioned above, the free movement of workers implies the abolition of any discrimination based on nationality between workers in Member States with regard to employment, pay and other working conditions.  The free movement of workers is characterized by three main profiles:  Right of access = regardless of their origin, workers shall be free to access the labor market of Member States other than the one of their nationality (no direct or indirect discriminations)  Right to equal treatment = once employed in a Member State other than the one of their origin, workers shall have the right to work under the same conditions guaranteed to national workers (principle of national treatment)  Right to a non-discriminatory social security 29 system (taking into account all periods)  The limits of the free movement of workers  The free movement of workers is limited by the ordinary general clauses of public policy and public security or for health reasons (see Art. 45.3 TFEU and especially Art. 27 et seq. of Directive 2004/38), which are common to all the fundamental freedoms  In addition, the Treaty dispositions on the free movement of workers do not apply to civil service employment (Art. 45.4 TFEU).  Restrictive interpretation (since it is an exception) = This exception needs to be given an autonomous, common EU interpretation in order to prevent the notions of civil service or public administration used in different national legal systems from limiting the effectiveness and scope of EU rules on the free movement of workers.  Participation in public authority /exercising of public powers = Thus, case law is consistent in the sense of including in the derogation in question only the jobs that involve direct or indirect participation in the exercise of public authority, as well as functions that have as their object the protection of the general interests of the State or public bodies.  In order to facilitate the identification of the scope of application of this derogation, the Commission has issued a Communication listing certain sectors of the public administration that are undoubtedly covered by the “public powers exception”, such as (i) the armed forces, 30 (ii) the police and other law enforcement agencies, (iii) the judiciary, (iv) the financial and tax administration, (v) diplomacy. 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 31  The right of establishment: preliminary remarks  Under Articles 49 to 55 TFEU, the right of establishment covers any economic activity carried out on a non-salaried and stable basis  It is a different freedom:  (non-salaried) = from the freedom of movement of workers by reason of the non-subordinate nature of the activity engaged in  (stable) = from the freedom to provide services on account of the stable and permanent - rather than occasional - nature of the activity in question  Freedom of establishment therefore concerns the case of a so-called professionally qualified establishment.  Article 49 TFEU is obviously a rule endowed with direct effect  Both natural persons who possess the nationality of one of the Member States (and thus are also EU citizens) and legal persons, particularly companies and firms, benefit from the freedom of establishment. Legal persons, however, shall: (i) be incorporated in accordance with the law of a member state, (ii) have their registered office (i.e., statutory seat), central administration or principal place of business within the Union (i.e., real seat) and (iii) pursue profit  We focus on negative integration, but please considered that positive integration is today (and since decades) of paramount importance – see for example the so-called professional qualifications directive (Directive 2005/36/EC) 32  The content of the right of establishment  As a first approximation, the freedom of establishment entails the right to move to a Member State other then the one of origin in order to pursue a non-salaried economic activity there on a tendentially permanent basis, thus becoming a part, on stable and continuous basis, of the market/legal order of the host Member State  The right of establishment can be a:  Primary establishment, when a self-employed person or a company relocates to a different Member State, definitely leaving his/her/its home Member State (for companies see Directive (EU) 2019/2121  secondary establishment, when a self-employed person or a company sets up “agencies, branches or subsidiaries” in another Member State but continues also to operate in his/her/its home Member State  in the latter case, the distinction with freedom to provide services is much more blurred 33  The material scope of the freedom of establishment  To sum up, the right of establishment entails:  as far as primary establishment is concerned, the right to access to the market and the right to exercise a given activity (it follows, e.g., the illegitimacy of any nationality clauses, even relating to the corporate structure or governing bodies), as well as the right to set up and manage companies;  as far as secondary establishment is concerned, on the other hand, the right to open secondary establishments (agencies, branches or subsidiaries); In both cases, the material content of the right is the principle of national treatment, i.e., the prohibition of direct or indirect discrimination with respect to the treatment of those established in the host state. 34  Limitations  Similar to what we have already seen with reference to the free movement of workers, activities that participate, even occasionally, in the exercise of public authority are not covered by the right of establishment (see Article 51 TFEU)  Rationale = to allow member states to reserve for their nationals the performance of certain activities deemed sensitive to the general interests of the country and such as to require, therefore, in the worker the manifestation of obligations and loyalty to the State typical of the citizenship relation.  Restrictive interpretation = Since this is a derogation from a fundamental freedom, the exception under consideration must be subject to a restrictive interpretation strictly functional to the objectives set for it, so that, for example, the exclusion does not apply when the activities involved in the exercise of public authority constitute an element that can be separated from the other activities carried out by that profession.  The limitation does not include:  Lawyers (Case 2/74, Reyners)  Teachers (Case 147/86, Commission v. Greece)  Certification companies (Case C-593/13, Rina Services SpA)  The position of notaries is dubious to say the least, and always "plays" on the requirement of divisibility (Case C- 47/08, Commission v. Belgium) 35 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 36  The freedom to provide services: preliminary remarks  The (minimum) purpose of the freedom to provide services is to enable the provider of a service to temporarily exercise his or her activity in the state where the service is provided, under the same conditions that the host state imposes on its own nationals (Art. 56 TFEU)  Beneficiaries of the freedom to provide services are citizens having the nationality of a Member State and established in a EU Member State (Art. 56 TFEU) as well as legal persons (companies) incorporated in accordance with the law of a Member State and having their seat, administration or center of interests within the EU  The benefits of liberalization may also be extended, by means of measures adopted by the European Parliament and the Council in accordance with the ordinary legislative procedure, to nationals of third states, provided that they are entities established within the EU (Art. 56(2) TFEU)  We focus on negative integration, but please considered that positive integration is today (and since decades) of paramount importance – see for example the so-called professional qualifications directive (Directive 2005/36/EC) as well as the so-called service directive (or Bolkestein) (2006/123/EU) 37  The freedom to provide services: limitations  The transport sector is excluded from the material scope of the freedom to provide services, as this sector is subject to the specific regime provided for in Articles 90-100 TFEU (Art. 58(2) TFEU)  A partial exception is also provided by the same Article 58(2) TFEU for banking, insurance and financial services in general  Lastly, activities that in the host state are involved in the exercise of public authority (as with the right of establishment and the free movement of workers) are excluded, and restrictions due to public policy or health reasons are allowed (Art. 62 TFEU refers to Art. 51-54 TFEU). 38  The notion of service : article 57 TFEU  According to the Treaties, activities normally provided for remuneration, insofar as they are not regulated by the other fundamental freedoms (i.e. the provisions on the free movement of goods, capital and persons), are considered as services.  Services include in particular: Not (a) activities of an industrial character exhaustive (b) activities of a commercial nature list (c) activities of craftsmen 39 (d) activities of the liberal professions  The notion of service : article 57 TFEU (2)  No subordination = non-salaried activities (self-employed)  Economic character = activity provided, normally, for remuneration  Cross-border character = activity provided by a provider established in a Member State other than the one in which the service is to be performed  Residual character = activity that is not regulated by provisions relating to the free movement of goods, capital or persons 40  Economic nature  The service must be performed, at least in principle, for remuneration  Remuneration should be identified with the consideration generally agreed upon between the parties of the transaction, i.e. between the provider and the recipient of the service  There is no need that remuneration is paid directly by the recipient of the service (see, e.g., Court of Justice C-16/93, Tolsma)  The limited value/cost of the service is irrelevant (e.g., cost of a museum ticket)  "Gratuity" has caused sports activity in the context of national representatives (where athletes often receive no contribution) to be excluded from the notion of service 41  Cross-border element  The situation shall not be confined within a single member state (see recently Case C-591/15, Gibraltar Betting and Gaming Association)  The standard case that the Treaty has in mind is the one where the subject who is moving is the provider of the services (“the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided” – Article 57 TFEU)  But it can also be the recipient of the service who moves, e.g., to receive tourist or health services in other MSs (see already Court of Justice 286/82 and 26/83 Luisi and Carbone)  Both provider and recipient can also move (e.g., tour guide)  Provider and recipient can also remain in their State and the only thing that "moves" is the service, e.g., financial services, consulting etc. (see 42 C-384/93 Alpine Investments)  Residual nature vis-a-vis the other freedoms  According to Article 57 TFEU, “services shall be considered to be "services" within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons”  Catch all = the ECJ has clarified that the above does not entail that the freedom to provide services is “less important” than the other fundamental freedoms  The reference to the other freedoms “relates to the definition of that notion and does not establish any order of priority between the freedom to provide services and the other fundamental freedoms” (Case C-452/04, Fidium Finanz) 43  Residual nature vis-a-vis the other freedoms (2)  Right of establishment = stable v. temporary and occasional character (but not only duration, also frequency, periodicity and/or continuity; whether the provider has an establishment is not relevant either; the only certain limitation is actually primary establishment)  Free movement of goods = activities involving the provision of services and supply of goods (e.g., franchising contracts); according to the Court, emphasis must be placed on the principal activity in terms of economic significance (see Omega case)  Free movement of workers = what regime applies to workers of a company that "transfers" (i.e., posts) them temporarily to another member state to provide services, e.g. to build a bridge? (see Rush44 Portuguesa cases; Laval, etc.)  The content of the fundamental freedom  «Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended” (art. 56 TFEU).  This is a disposition with direct effect (see Case 33/74 Van Binsbergen).  “Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided, under the same conditions as are imposed by that State on its own nationals” (article 57 TFEU)  «As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 56” (article 61 TFEU). 45  Distinctly applicable measures: the principle of so- called national treatment  As a fundamental economic freedom, the freedom to provide services is meant to apply mainly to state measures but in reality it also includes measures of a private nature that end up collectively regulating the employment and/or provision of services (e.g., sports federation measures)  Both entry and exit restrictions are prohibited  The basic rule is the one of the principle of so-called national treatment which implies first and foremost the prohibition of direct discrimination based on the nationality of the service provider  In this first perspective, freedom to provide services becomes quite similar to the right of establishment: anyone who provides services across borders cannot be subjected to the application of rules other than those reserved, for example, for nationals of the member state where the services are provided.  Question: does it make sense for someone who intends to perform an occasional, periodic activity to be subject to the same regime as someone who intends to move (even permanently) to another member state? 46  Indistinctly applicable measures: overcoming the national treatment rule  Measures that, while not formally discriminatory, result in an obstacle to the free movement of services are also covered (after all, this is coherent with the wording of Article 56 TFEU, according to which restrictions on the freedom to provide services shall be prohibited)  What is worth noting is that applying the principle of national treatment would ultimately deprive the freedom to provide services of any useful effect, as this freedom would be "flattened” on the right of establishment  Requiring the service provider to comply with two different domestic legislations (i.e., that of the Member State of origin and that of the Member State of destination of the service) would mean reserving to him/her/it ac de facto unfavorable treatment compared to persons established in the Member State of destination (who have to comply with only one legislation)  The principle of national treatment has thus been superseded by the case law of the Court, which has established the (very important) principle of so-called home country control: in principle, the activity must be regulated exclusively 47 by the home member state  Indistinctly applicable measures: overcoming the national treatment rule  This is an application of the general principle of mutual recognition and mutual trust: in the absence of EU-wide harmonization of national laws, the freedom to provide services cannot be hindered by the application of national measures that make the performance of certain activities subject to compliance with or completion of formalities that would be in addition to those provided for by the State of establishment  Thus, the freedom to provide services requires “not only the elimination of all discrimination against a person providing services on the ground of his nationality but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, when it is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides similar services”(C-76/90, Sager)  The possibility for the service provider to carry out its activity must therefore be recognized in all member states if it is carried out in a manner 48 that complies with the requirements set by the provider’s Member state of origin. 1. Preliminary remarks 2. Free movement of goods 3. Free movement of persons 1. Workers 2. Freedom of establishment 3. Freedom to provide services 4. EU citizenship 49  The EU citizenship: general profiles  The EU citizenship is a supranational citizenship (of course it does not replace the citizenship of each Member State, but is an additional one)  Art. 9 TEU (but see also Art. 20 TFEU) = “In all its activities, the Union shall observe the principle of the equality of its citizens, who shall receive equal attention from its institutions, bodies, offices and agencies. Every national of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship”.  According to the ECJ, “citizenship of the Union […] is intended to be the fundamental status of nationals of the Member States” (C-221/17 Tjebbes; C-82/16 K.A.)  The EU citizenship not only grants to EU citizens a series of rights (starting with the right to non-discrimination), but at the same time it seeks to certify the existence of a political bond between citizens of different Member States  Through citizenship, individuals are granted, as citizens of the Union, a role as active players in the process of European integration  It is, however, “different” from a national citizenship, insofar as it is primarily concerned with the relationship between individual and Member States, rather than between citizen and Union (also because the Union has no competence in matters that normally concern the institution of citizenship)  E.g., duties = although the possibility for the EU citizenship to impose duties on individuals is mentioned by Article 20 TFEU (“Citizens of the Union shall enjoy the rights and be subject to the duties provided 50 for in the Treaties”), in reality there are no duties  Personal scope = who is a EU citizen?  As mentioned, according to Article 9 TEU and Article 20 TFEU, “[e]very person holding the nationality of a Member State shall be a citizen of the Union”  The possession of the EU citizenship is therefore an automatic consequence of holding the national citizenship of one of the Member States  And vice versa, one is a citizen of the Union as long as he/she is a national of one of the Member States  This is an absolute deferral, as Declaration No. 2 annexed to the Maastricht Treaty also makes clear (“the question whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law of the Member State concerned”)  The definition of the criteria by which national citizenship, and thus consequently the EU one, is thus an exclusive competence of the member states (e.g., choice between so-called ius soli and so-called ius sanguinis) 51  Personal scope = who is a EU citizen? (2)  The EU not only does not have competence to define uniform criteria for the acquisition (and loss) of the EU citizenship, it cannot establish minimum harmonization standards either  Similarly, a Member State cannot challenge the criteria according to which another Member State confer its national citizenship and, consequently, the EU citizenship (see, e.g., Chen judgment)  And that even though the attribution of the EU citizenship results in the conferral on the individual who holds it of rights that may also have a significant impact on other Member States (e.g., movement + family reunification)  Notwithstanding the above, the rules on the attribution and even more so those on the loss of citizenship must nevertheless respect certain limits  After all, the fact that a matter is within the exclusive competence of the member states does not mean that they do not have to respect EU law when regulating it (with regard precisely to citizenship see judgment C- 135/08, Rottmann)  Indeed, the loss of national citizenship entails the loss of the status of EU citizen and, therefore, of the possibility for the concerned individual to benefit from the relevant rights stemming form EU law  The ECJ has thus made clear that such a case is subject to its scrutiny (see again Rottmann case) and that this 52 situation must always respect the general Union law principle of proportionality (e.g., Case C-221/17, Tjebbes)  The status of “EU citizen”  As mentioned, according to the ECJ, the EU citizenship represents the fundamental status of the individuals in the EU  This status is, of course, strictly linked to national citizenship but, under certain circumstances, it acquires an independent and autonomous value from that citizenship  E.g., if the national of the Member State “A” also acquires the nationality of the Member State “B”, Member State B cannot deny him the rights deriving from the EU citizenship by claiming that this is a so-called purely internal situation, i.e., a case involving a domestic relation between a State and its nationals (Case C-165/15 Lounes)  Garcia Avello case (C-148/02) = right to a double surname, as a consequence of EU citizenship, for children of Belgian/Spanish nationals residing in Belgium, although in Belgium those with dual citizenship are considered Belgian nationals only  Indeed, the EU citizenship (like all EU law) can lead to situations of advantage over the possession of national citizenship alone in relations with a given member state (problem of so- called “reverse discrimination”) 53  The list of rights conferred by the EU citizenship (article 20(2) TFEU)  Freedom of movement and of residence in all the Member States  Right to vote at the EU Parliament and at the municipal elections of the place of residence (of course different that the MS of origin)  Right to take part as a candidate at the EU Parliament and at the municipal elections of the place of residence (as above)  Diplomatic and consular protection in third countries  Right to petition to the EU Parliament  Right to apply to the European ombudsman  Right to address the EU institutions in one of the official languages of the EU (actually not reserved only to EU citizens)  More generally, right to equal treatment, which means prohibition of any discrimination on grounds of nationality  Rights conferred by the Charter of EU Fundamental rights (Title V – articles 39-46)  right to good administration  right of access to documents 54  Freedom of movement and of residence in all the Member States  Article 20 TFEU = «the right to move and reside freely within the territory of the Member States»  Article 21 TFEU = «Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect»  Article 45(2) CFREU = «Every citizen of the Union has the right to move and reside freely within the territory of the Member States”  The detailed regime is found in Directive No. 2004/38/EC 55  Freedom of movement and of residence in all the Member States  The freedom of movement = this right involves the right to leave one’s own and/or other Member States and the right to enter any other Member State  Right of residence = three types  “Short” period (less than three months)  “Medium” period (between three months and five years)  “Long" period” (above five years) 56  The right to reside for a “short” term period  The right of short-term residence is considered as a form of movement and therefore it is treated just as the right of movement, so that it cannot be made subject to any conditions  In fact, the only requirement is to be a EU citizen (and therefore the citizen of a EU Member State)  The way to prove that one is a citizen of the Union is, as a rule, to hold a valid identity document or passport  But the right of movement and residence is inherent in the status of EU citizen, so possession of a document is only a way of proving that status, it does not give rise to the right 57  The right to reside for a “medium” term period  Medium-term stay is subject to the conditions set out in Article 7 of Directive 2004/38/EC  It is eligible for the following subjects:  workers (job search is also included)  students (school, university, vocational and/or professional training)  all EU citizens: provided they have sufficient economic resources and health insurance  Family members accompanying or joining the EU citizen exercising his/her freedom of movement, regardless of their nationality  This is a consequence of the right to family reunification = - Right to private and family life and removal of obstacles to freedom of movement 58  The right to permanently reside in another MS  The right of residence becomes permanent after five years  Permanent means that this right is no longer subject to the requirements posed by Article 7 of the Directive  Even if a person no longer meets these requirements, he or she can no longer be removed from the territory of the host Member State  The right of permanent residence is acquired by virtue of a period of continuous and legal residence of at least 5 years' duration  It aims to protect the “stable" dimension of the free movement  It applies also to family member, regardless of their nationality  Certain periods of absence for specific reasons are allowed, but not exceeding two years, otherwise the right of permanent residence is59lost  The legal regime for family members MEMBER STATES ARE OBLIGED TO ALLOW FAMILY REUNIFICATION for  Spouse (see Coman case for same-sex marriages).  Partner with a duly registered union, and where the host Member State considers such a union to be equivalent to marriage.  Direct descendants under the age of 21 or dependents, including those of a spouse or partner  Dependent lineal ascendants and those of the spouse or partner MEMBER STATES SHALL (ONLY) FACILITATE FAMILY REUNIFICATION for Any other dependent or cohabiting family member or who requires for serious health reasons Partner who does not fall under the above definition 60  Limitation to the freedom of movement and residence Member States may derogate from the provisions on the free movement of persons for reasons of:  PUBLIC ORDER: Violation of the rules and values of a society  PUBLIC SAFETY: Threat of a qualified violation  PUBLIC HEALTH: Diseases with epidemic potential Limits should be interpreted narrowly to prevent misuse:  Actual and real risk  individual assessment  Procedural safeguards and remedies against 61 restrictive measures (i.e. judicial review)  Other rights conferred by the EU citizenship: right to vote and to enjoy diplomatic and consular protection RIGHT TO VOTE AND STAND  EU Parliament and local election = if a EU citizen resides in a MS different form the one of his origin, he/she has the right to vote and to stand in the local elections and in the elections for the EU Parliament at the same conditions applied to the nationals of that state  No political election = By contrast, the EU citizenship does not grant any right with regard to the possibility to vote and to stand for political elections in the host Member State  More generally, and as seen, the EU citizenship does not grant any right with regard to the possibility to exercise high offices in the host Member States or to carry out activities that are generally linked to the sovereignty of the MS (such as the armed forces or the judiciary) RIGHT TO ENJOY DIPLOMATIC AND CONSULAR PROTECTION  Every EU citizen shall have the right to enjoy, in the territory of a third country, the protection of the diplomatic and consular authorities of any Member State on the same conditions as the nationals of that State, as long as in the territory of that third country the Member State of which they are nationals is not represented 62