Business Law in the EU PDF

BUSINESS LAW IN THE EU SESSION 2:INTERNATIONAL LAW UN: created in 1945 after 2nd world war, to maintain peace all over the world. - 193 member (except Vatican, palestine) Security council: 5 permanent members ( winners of 2nd world war: Russia, france, UK, USA, China) VETO rights + 15 non permanent: Algeria (2025) Ecuador (2024) Guyana (2025) Japan (2024) Malta (2024) Mozambique (2024) Republic of Korea (2025) Sierra Leone (2025) Slovenia (2025) Switzerland (2024) GENERAL ASSEMBLY: Big general assembly, each year to debate about the big subjects and questions about security, peace, budgetary matters. -General secretary: Antonio Guterres WTO: World trade organization: -166 members: (china integration→ 2001: → GDP multiple buy 15 since) based on commercial relations Laws creation, enforcement, repercussions arbitration and solving disputes. INTERNATONAL LAW: 1rst Terms → 1780 before wars → only state can be subject to international law with international legal personality, possessing international rights duties + bring international claims. but the holy see was considered has international so confused. now we have intergovernmental org, non gov org, transnational comp,plus individuals Nationally regulated, so not really clear; -General international laws: rules and principles that are applicable to a larger number of states.on basis of their customary international law/multilateral treaties. -Universal international law→ apply to every one no matter what. -regional international law→ apply to a certain group of state( EU) -Particular international law →implies only ⅔ or few states. Harmonizing since legal systems around the world can be highly developed with some connected with modern state and its apparatus. More and more regulation in Europe, with a bureaucracy that was so-so efficient. State and civil society. Three functions with organs: →Law-making (legislature) →Law determination (courts, appeals, tribunals etc.-) →Law enforcement (police, army, administration) National law is based on private groups/individuals. International law based on legal regulation and international intercourse of states (limited in numbers and each considering Itself as ‘sovereign and equal’ when It’s obvious that it’s not). -Horizontal legal system -Lacking supreme authority -Centralization of the use of force -Differentiation of the 3 basic functions of law-making UN not a « world legislature ». UN security council limited in poth legal and political capacity. Sanctions: self-help →Countermeasures: retorsion (to injure the wrong-doing state: cutting-off economic aid), reprisals (the reprisal would normally be unlawful but becomes lawful due to a wrong-doing committed by a state. The disadvantage of retorsion and reprisals is that it can injure both states and not only the one against which the sanctions are directed. International law considers that it has its collective responsibility (the whole community of a state which has committed an Interational wrongful act. Civilian populations can be affected and are affected such as Iraq during the desert storm war. International law, due to a lack of central institutions, is heavily dependent on national legal THE INTERNATIONAL COMMUNITY: → STATES ARE THE MEMBERS OF THE INTERNATIONAL COMMUNITY AND ARE EQUAL AND SOVEREIGN. →In addition to states also the international Organizations (IO) are considered members of the International Community (ex: the UN) →Rule of Law (in French: Etat de droit) A situation in which the laws of a country are obeyed by everyone →The main objective of International law is to regulate the relations between states and between states and IO → International law attributes OBLIGATIONS and RIGHTS mainly to states and IO ( and more recently also to individuals) MAIN CHARACTERISTICS OF INTERNATIONAL LAW: →Abscence of supreme authority - As law-making body - to ensure the application of the law - to ensure the punishment in case of infrigments →As a consequence, CONTERMEASURES (self aid) are allowed in case of violation of international law. LEGAL SOURCES: →Customary international law →International treaties/agreements JUS COGENS:Origin and Etymology of jus cogens: New Latin, literally, constraining law. A principle of international law that is based on values taken to be fundamental to the international community and that cannot be set aside (as by treaty). → (compelling law) is also part of customary international law: - composed of principles of law which do not admit derogations ( ex: prohibitions against slavery and torture,genocide,the use of armed force…) INTERNATIONAL DISPUTES: Mediation (in French: médiation) Non-binding intervention between parties to promote resolution of a grievance, reconciliation, settlement, or compromise. Conciliation (in French: conciliation) The settlement of a dispute by mutual, friendly, and often private agreement with a view to avoiding litigation. Arbitration (in French: arbitrage) The process of resolving a dispute (as between labor and management) or a grievance outside the court system by presenting it to an impartial third party or a panel for a binding decision. Retorsion: Lawful act designed to injure the wrongdoing state. ARBITRAL NATURE OF INTERNATIONAL COURTS: → States are equals and sovereign - only if states accept the jurisdiction and the international court has the competence to decide. Ex of international courts: - International court of justice (general scope) - Dispute settlement body of the world trade org (international trade) - International criminal court ( international crimes of genocide, crime against humanity and wars crimes) - International tribunal for law of the sea ( interpretation and application of the UN convention on the law of the sea) THE WTO AND ITS DISPUTE SETTLEMENT BODY: →The multilateral agreements are negotiated within the WTO - 164 members (since july 2016) - around 98% of world trade - decisions by consensus →Objectives: Reductions of the custom duties during rounds ( ministerial conferences where the representatives of the member states meet to negociate) DISPUTE SETTLEMENT BODY: →It handles disputes btw members (decisions are compelling) →it is a successful achievement SESSION 3: THE EU INSTITUTIONAL FRAMEWORK THE MAIN INSTITUTIONS OF EU: →EUROPEAN COMMISSION (executive) →EUROPEAN PARLIAMENT ( LEgislative) →COUNCIL OF THE EUROPEAN UNION (legislative) →EUROPEAN COUNCIL (executive) →EU COURT OF JUSTICE ( judiciary) →The role of the EU HIGH REPRESENTATIVE ( HR)/VICE PRESIDENT (VP)is to take care of the coordination btw the Council, the European council and the commission → The VP/HR is the EU CHIEF DIPLOMAT, charged with shapping and carrying out the EU’s foreign security and defense policies. THE CURRENT HR/VP IS JOSEP BORELL FONTELLES THE EUROPEAN COMMISSION: → It’s an independent Institution: commissioners cannot receive instructions from member states. → The current PRESIDENT OF THE EUROPEAN COMMISSION IS URSULA VON DER LEYEN - Main powers of the Commission: →Proposing legislative acts to the parliament and council →Managing the Eu’s budget and allocating fundings →”Guardian of the treaties”: enforce EU law (with court of justice) →representing the EU in international community STRUCTURE: THE EUROPEAN PARLIAMENT: → Only directly elected body of EU →720 members directly elected by the EU citizens though a proportional system ( number of members for each state is roughly proportional to it’s population (who has voted)) →They are elected for 5 years term ( 2024-2029) →Current president of the european parliament : ROBERTA METSOLA MAIN POWERS: →Law making process,decides the adoption of EU legislative acts ( with the council) → Democratic supervision, supervises other institutions to avoid misuse of power → Budget control, approves EU annual budget with the council. THE COUNCIL OF EU AND EUROPEAN COUNCIL THE EU COURT OF JUSTICE: Composed of 2 courts: → GENERAL COURT: 2 judges per EU country It deals with cases brought forward by natural legal persons, member states. In practice, the court deals mainly with competition law, state aid, trade, agriculture and trademarks →COURT OF JUSTICE: 1judge per Eu country and 11 general Attorneys. It deals with appeals on points of law against judgelents of the general court, preliminary ruling request from national lower courts, cases brought by members states or EU institutions; THE EU COMPETENCES What is decided at the level of the EU and what at the level of the Member States (MS)? →FEDERAL STATE APPROACH: used for the allocation of competences btw federal level and federal state level; - What functions can be decentralized to improve the welfare of the federal states? →SUPRANATIONAL APPROACH:used in the European Union - What integration deficit does the internal market still suffer? The EU regulation has the objective to reduce such a deficit. The allocation of competences between the supranational level (the EU) and the national one (the Member States) must respect the following principles: →Subsidiarity priciple: acceptance of the centralisation only if the EU welfare would not decrease. →Proportionality principle:The EU shall be proportionate to the objective established to avoid any risk of overregulation, or regulation too intrusive. THE TREATY OF THE FUNCTIONING OF THE EU →Provide 3 kinds of competences to the EU EEC: replaced to the EU in 1992 THE EU ORDINARY LEGISLATIVE PROCEDURE In the Ordinary Legislative Procedure, which is the most important one, we find the following steps 1. The proposal: the draft is made by the Commission, the only EU institution which has the power of legislative initiative. Before the draft, it firstly assesses the economic, social and environmental impact of the proposal and consults the interested parties (the lobbies). 2. Discussion and vote: the Council and the European Parliament (EP) In the ordinary legislative procedure - The Council and the EP receive the Commission’s proposal and can propose amendments (first reading) - If they do not agree on the amendments, a second reading takes place and they can again propose amendments; the EP can block the proposal if it does not agree with the Council - Yet, if the Council and the EP do not agree, a conciliation committee tries to find a solution THE EU LEGAL SOURCES: →PRIMARY LAW: The union treaties →SECONDARY LAW:( cannot conflict with primary law) - UNILATERAL ACTS: Legislative acts: regulations, directives , decisions Non legislative acts: delegated acts, implementing acts ( more administrative nature) Atypical acts; communications, recommendations, ( not binding) - CONVENTIONS and AGREEMENTS: International agreements, signed by EU and country or org outside EU Agreements btw EU countries Inter Institutional agreements (agreements btw eu institutions) →SUPPLEMENTARY LAW: - COURT OF JUSTICE CASE - INTERNATIONAL LAW - GENERAL PRINCIPLES OF LAW principles of the primacy of the EU LAW:any national provision that is in conflict with the Eu law shall be not applied principle of direct effect:individuals can immediately invoke a european provision that has direct effect before a national or european court under certain conditions. Federal: supranational: keep national law plus add ones for the Eu THE MEMBERSHIP OF THE EU: THE ENLARGEMENT AND THE BREXIT International organizations (I.O.) are established by a treaty, included the EU, although it is considered a particular I.O., due to the deep integration among its Member States →ENLARGEMENT: Process of joining the EU.To do so, a European State files an application to start the negotiations for the accession. Candidates must meet specific criteria: - A political one: respect of democracy, rule of law, human rights and minorities. - An economic one: market economy. - An administrative one: the ability to implement all EU law. It is also possible to withdraw from the Union, as the United Kingdom did through a process that was called Brexit Withdrawal means ‘the act or process of taking something away so that it is no longer available, or of someone stopping being involved in an activity’ (Cambridge dictionary). Thus, the withdrawal from an I.O. is the act or process of a member state stopping being involved in the I.O. Article 54 of the Vienna Convention on the Law of the Treaties provides that: “The termination of a treaty or the withdrawal of a party may take place: (a) In conformity with the provisions of the treaty; or (b) At any time by consent of all the parties after consultation with the other contracting States.” Article 50 of the Treaty on the European Union provides the procedure of withdrawal from the EU and affirms that: "Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.” The history of the UK membership is peculiar: In 1973 the UK became a member of the European Economic Community. In 1975 the citizens of the UK expressed by referendum their will to continue the membership (67% of votes in favour). On the 23rd of June 2016 a new referendum took place: 51.89% votes in favour to withdraw from the EU, 48.11% votes in favour to remain. The United Kingdom withdrew from the European Union on 31 January 2020. This is the first time in the history of the EU that a EU's Member State expresses the will to withdraw SESSION 4: CUSTOM UNIONS REGIONAL INTEGRATION: Regional integration can take diverse forms, through different kinds of international agreements. In the table below you can find the main distinguishing features of three types of associations among countries: Each kind of agreement allows to achieve a deeper level of integration: NAFTA: North America Free Trade Area→ mexico, USA, CANADA/ become USMCA: Us Canada, Mexico Agreement. ITS a FREE TRADE AREA that represent 30% of the global economy Custom unions: SACU: South African Custom Union, 4countries of South africa. -Free movement of people and capital ( Maastricht Treaty→ 1992) INTERNATIONAL LAW AND EU CUSTOM UNION → 2018 : 50TH year of EU CUSTOM UNION → seen as a tool for peace →Article 28 of the Treaty on the Functioning of the European Union ( ) stipulates that the Union ‘shall comprise a customs union which shall cover all trade in goods’. The Union Customs Code (UCC),4 by contrast,which was enacted to manage this Customs Union, sticks to the traditional wording that ‘the Union is based upon a customs union’,5 which demonstrates its funda- mental role for the EU even more clearly. → Central piece of EU custom legislation : UCC( UNION CUSTOM CODE, 2013) → FREE MOVEMENT OF GOODS: The prohibition on customs duties and charges having equivalent effect was designed to combat the obstacles to trade, created by such duties, between member states. 1. The EU Customs Union was established in 1968 and continues to evolve to meet the challenges of global trade The Union Customs Code (UCC) enacted in 2013 aims to modernize the legal framework 2. The EU has exclusive competence over the Customs Union and common commercial policy under the Treaty on the Functioning of the EU (TFEU) 3. EU customs legislation has been significantly shaped by international instruments from organizations like the World Trade Organization (WTO) and World Customs Organization (WCO), including: ○ WTO agreements like GATT 1994 and the Trade Facilitation Agreement ○ WCO conventions like the Revised Kyoto Convention and SAFE Framework 4. These international instruments include both hard law and soft law, which impact EU legislation differently 5. Key drivers of trade facilitation internationally are the WTO and WCO. Their conventions and standards aim to harmonize and simplify customs procedures globally 6. The EU has adopted relevant international instruments and transposed them into its customs regulations governing the Customs Union 7. EU customs law also reflects international efforts at standardization, like using codes instead of words to overcome language barriers 8. The Customs Union plays a crucial role in facilitating the EU's internal market and implementing its common commercial policy 9. Customs authorities in EU member states work together to apply uniform tariffs externally while allowing free movement of goods internally Legal Basis and Competence The EU Customs Union is established by Article 28 of the Treaty on the Functioning of the European Union (TFEU) The EU has exclusive competence over the Customs Union and common commercial policy under Articles 3(1)(a) and 3(1)(e) TFEU This means only the EU can legislate and adopt legally binding acts in these areas, while member states are restricted from doing so unless empowered by the EU Structure and Function The Customs Union abolishes internal borders for trade between EU member states and applies a Common Customs Tariff to goods from non-EU countries It's managed through the Union Customs Code (UCC), which provides a comprehensive framework for customs rules and procedures International Influence EU customs legislation has been significantly shaped by international instruments, particularly from the World Trade Organization (WTO) and World Customs Organization (WCO) Key international agreements influencing EU customs law include: WTO agreements like GATT 1994 and the Trade Facilitation Agreement WCO conventions such as the Revised Kyoto Convention and SAFE Framework Implementation of International Standards The EU has adopted and transposed relevant international instruments into its customs regulations This includes both "hard law" (legally binding agreements) and "soft law" (non-binding guidelines and standards) The EU's implementation of these international standards helps harmonize and simplify customs procedures globally Global Trade Facilitation The WTO and WCO are key drivers of international trade facilitation Their conventions and standards aim to harmonize customs procedures worldwide, which the EU incorporates into its Customs Union framework Impact on EU Legislation International law has a strong impact on EU customs legislation in several ways: 1. Shaping the basic structure and principles of the Customs Union 2. Influencing specific customs procedures and practices 3. Driving modernization efforts, as seen in the UCC 4. Promoting standardization, such as the use of international codes in customs documentation Broader Implications The Customs Union is crucial for facilitating the EU's internal market and implementing its common commercial policy It also plays a vital role in protecting EU citizens, animals, and the environment by controlling imports and combating illicit trade 10. In summary, the EU Customs Union represents a sophisticated implementation of international customs standards, demonstrating the significant influence of international law on regional economic integration. 11. The Customs Union is essential for protecting EU citizens, animals, and the environment by controlling imports and combating illicit trade IMPACT OF INTERNATIONAL LAW ON THE EU CUSTOM UNION 1968→ creation of the EU custom union → to achieve equalisation of custom duties and charges levied o product imported from third country at external borders of the European community (to avoid defleting trade & distorting free circulation& competitive conditions in internal market) 2018→ UK leave the custom union with the breakit custom union seen as a tool for peace based on the TFEU= Treaty on the Functioning of the EU and follow the UCC= Union custom Code the custom union is still in development (adapte to the everchanging challenges of world trade not armonised sanctions Custom union = free movement of goods→prohibition on custom duties and charges (internal dimension)→ combat obstacles to trade, but lead to duties for members Common Custom Tarrif (CCT)--> govern trade with third countries (external dimension) Custom union is supposed to be internal to the EU but relates to international law structures: WTO, GATT, Trade Facilitation Agreement , world custom organization( revised kyoto convention +SAFE framework of standards to secure and facilitate global trade) their status differ if they are hard law or soft law ‘only the Union may legislate and adopt legally binding acts,’ while EU member states must refrain from doing so unless ‘they are empowered by the Union or for the implementation of Union acts.’ the core idea for this model was not to facilitate trade, but rather to prevent the parties that had ratified GATT from under- mining their distinct commitments to customs duties by using arbitrary customs valuation methods. Nowadays, trade facilitation is seen as comprising ‘the simplification, harmonisation, standardisation and modernisation of trade procedures’ in order to reduce trade transaction costs at the interface between business and government. the EU legislation governing the Customs Union is not restricted to customs pro- visions and the related issue of trade facilitation. The EU also operates the CCP, which, as an integrated part of EU external relations, aims to achieve balanced economic and social development worldwide through trade liberalisation, fair trade and integration into the world global economy.* While, internally, the EU Customs Union is designed to abolish most trade-restricting measures between its constituent members in accordance with GATT 1994, externally it is guided by the target to harmonise all trade-related relationships with third countries, also under the scope of GATT 1994. THE EU CUSTOM UNION: PROTECTING POEPLE AND FACILITATING TRADE →custom in holding the front line against dangerous goods, illegal traffic, fraud, terrrorism 1 organised crime while making legitimate trade as easy as possible. →. A customs union means that members apply the same tariffs to goods imported into their territory from the rest of the world, and apply no tariffs internally among members. It surrounds the EU’s internal market, allowing goods to move freely internally by controlling their external import and export The EU customs union is managed on the ground by national customs services of Member States acting as if they were one also protect rare species and animals+ passenger check for dangerous or illegal product A customs union is created when a group of countries join together to apply the same rates or import duties on goods from the rest of the world. The countries within that union also agree not to apply duties between themselves. Essentially, once goods have passed customs they can move freely between those countries within the customs union A customs union differs from a free trade agreement in that a free trade agreement only abolishes customs duties between the countries concerned. There is no agreement to apply the same rates of duties to goods coming from other countries Responsibility for customs policy is at the level of the European Union: it is one of the few areas known as an exclusive competence of the EU The European Commission proposes EU customs legislation and monitors its implementation The Treaty of Rome of 1957 initiated the customs union as an essential foundation of the community At the EU level, there is a continual effort to provide improved customs procedures and to ensure that goods entering or leaving the EU are treated the same regardless of the customs entry or exit point. SHENGEN AGREEMENT: 29 CONTRIES, no irlande and not cyprus( divided into Eu and Turquie) SESSION 5: THE EU INTERNAL MARKET EUROPEAN COMISSIONER FOR INTERNAL MARKET AND SERVICE→ MICHEL BARNIER (2010) The EU Internal Market is also called single or common market. Its main achievements are: - The withdrawal of all inner barriers (customs, administrative, technical etc.) - The enactment of the free movements on goods, people, services and capital, the so called 4 freedoms. THE FREE MOVEMENT OF GOODS The single market was established in 2 steps. The 1st step was completed in July 1968 and implied: ⚫ The elimination of the custom barriers within the EU ⚫ The establishment of a common external tariff. Necessary for the reimbursement of the debt ( french one: 119% of the GDP) The 2nd step aimed to taking away barriers other than customs and took place between 1986 and 1993. It implied: ⚫ The harmonisation of technical rules - European standards - in several sectors ⚫ The principle of mutual recognition of national standards, as from the Cassis de Dijon case of the Court of Justice, in the remaining sectors. The result was the adoption of around 1,600 directives. → WTO shaping the Custom union, Custom union shaping the internal market THE FREE MOVEMENT OF GOODS THE FREE MOVEMENT OF SERVICE The main aspects of the free movement of services are the following: - Freedom for establishment allows to have a steady and continuous economic activity in one or several Member States. - Free movement of professionals: mutual recognition of professional qualifications. - The Services Directive (Directive 2006/123/EC): enables an economic operator to provide services in a member state other than the one where he is established. - Business environment: harmonisation of the rules relating to company law, corporate governance, accounting and auditing, public procurements, etc. - Despite major progress in some sectors, the overall Internal Market for services is not yet working as well as it should, the integration process is still in progress. THE FREE MOVEMENT OF PEOPLE People are not considered only as workers, they are human beings and as such other aspects of their lives must be taken into account The main aspect of the free movement of persons is the free circulation, including foreign people as soon as they are legally admitted by a member state. 1. Internal aspect: to cancel all obstacles for free movements, but there is the possibility to re-establish controls on former borders in case of a state emergency. 2. External aspect: to strengthen controls on external borders, in order to prevent criminal activities and illegal immigration. This implies: o Common rules for delivering visas and for asylum and immigration. o The Schengen Information System (SIS). o FRONTEX (European Agency for operational cooperation on border control) example: the roaming charges within EU:aims to extend and improve roaming services in the EU.(additional benefits, better connectivity no excessive calls prices,sms,) by outlawing surcharges.”roam like at home” → regulate roaming service and wholesale access to public mobile communications networks. →increase transparency & improve charges information →increase transparency for users of non regulated roaming services (boradship, aircraft + value added services (help desk,insurance comp, airlines)) →ensure access to emergency services free of charges regulations that are periodic with the need to revote. Schengen Area →Main achievement of the European project→Largest free travel area in the world The free movement of people has been quite effective since the Schengen Convention (1985; implemented in 1995). The convention encompasses as of today 29 members(population of 420 million people): -beggining →france germany belgium netherlands and luxembourg 25 of the 27 EU members (Ireland is not a Schengen member and Controls at the internal borders with Cyprus have not yet been lifted). and 4 non-EU members: Norway, Iceland, Switzerland and Lichtenstein (EFTA european free trade association members) → last country is croatia in january 2023 Being part of an area without internal border controls means that countries: do not carry out checks at their internal borders, except in cases of specific threats carry out harmonised controls at their external borders, based on clearly defined criteria The set of rules governing the Schengen area is called Schengen Borders Code. benefits: -to travel freely between member countries without going through border controls. -Europeans make an estimated 1.25 billion journeys within the Schengen area every year, which also greatly benefits the tourism and cultural sector. -significant economic benefits to all citizens and businesses in its participating states. It is designed to be the bedrock of the European Union and of the single market as a whole. Non-EU nationals living in the EU or visiting the EU as tourists, exchange students or for business purposes can also travel through the Schengen countries without going through border controls. For travellers transiting through or intending to stay in the Schengen area for a short period, the EU has established common visa rules. An EU common visa policy is necessary for the effective functioning of the border-free Schengen area as it facilitates the entry of visitors into the EU, while strengthening internal security. -to protect its citizens through increased cooperation between the police forces, customs authorities and external border control authorities of all the member states. - improved systems of communication between police forces hot pursuit of criminals cross-border surveillance of suspects mutual operational assistance direct exchanges of information between police authorities enormous advantage in the fight against terrorism and against serious and organised crime, including trafficking in human beings and illegal migration. In case of a serious threat to public policy or internal security the member states can reintroduce border control, as an exceptional measure, respecting the principle of proportionality. It is a measure of last resort – i.e., an extreme measure. - SECURITY: - These includes, for example, the creation of the European Border and Coast Guard Agency (Frontex) and the development of the Schengen Information System (SIS). The scope and duration of the measure must be limited in time. The Commission can adopt an opinion on the measure, regarding the necessity and proportionality, but it cannot veto. THE FREE MOVEMENT OF CAPITAL The freedom of capital movements came enforced in 1990, excepted for restrictions related to taxation, prudential control, law and order and money laundering. There is not a precise definition of free movement of capital. It includes: Foreign direct investment (FDI) Real estate investments or purchases Securities investments (e.g., shares, bonds, bills, unit trusts, calls, puts, features, swaps, etc.) Granting of loans and credits Other operations with financial institutions, including personal capital operations such as dowries, legacies, endowments, etc. N.B. The movements shall be cross-border. BREXIT CASE AND IRELAND BORDERS: EU & UK made some arrangement fro good traelling, in the interest of people and business in Nothern Ireland. →THE NORTHERN IRELAND PROTOCOL: part of the EU-UK withdrawal agreement, to avoid a hard border on the Ireland. →the protocol takes into account the unique circumstances on the ireland’s island. It was agreed between the United Kingdom of Great Britain and Northern Ireland (UK) and the European Union (EU) as a stable and lasting solution designed to protect the all-island economy and the Good Friday (Belfast) Agreement in all its dimensions, and to safeguard the integrity of the EU single market. Who signed? -EU→ charles michel & ursula von der leyen (president of the european council &president of the commission) -UK→ Boris johnson (UK prie minister) -BREXIT:ratified by EU and UK + received the consent of EU parliement → Was signed in the 24 january 2020 and applied in 1 january 2021 →THE WINDSOR FRAMEWORK:The new solution, which will ensure lasting certainty and predictability for all communities in Northern Ireland, has been found within the framework of the withdrawal agreement, of which the Protocol is an integral part. The Protocol, and the joint solutions under the Windsor Framework, include new arrangements that respect the integrity of both the UK and the EU single market and protect the Good Friday (Belfast) Agreement in all its dimensions. These arrangements include: customs – facilitations for trusted traders VAT and excise – avoiding unintended consequences of EU VAT and excise rules applying in Northern Ireland agri-food (sanitary and photo-sanitary rules) – facilitating retail goods to enter Northern Ireland medicines – ensuring supply of new medicines to Northern Ireland state aid – clarifying when state aid is applicable to subsidies that have genuine and direct link to Northern Ireland pet travel – facilitating pet travel between Northern Ireland and Great Britain In order to ensure that the voices of the people in Northern Ireland are better heard, a new emergency break mechanism, the Stormont Brake, will be established. It will allow the UK government in exceptional circumstances, at the request of 30 Members of the Legislative Assembly in Northern Ireland, to stop the application of amended or replacing legal provisions that may have a significant and lasting impact on the everyday lives of communities in Northern Ireland. in March 2023 the Council adopted two decisions related to the Windsor Framework. Taken together, the decisions allow the EU to agree to the main modifications in relation to the Protocol and to more easily engage with the UK in specialised working groups. In May 2023, the Council adopted three regulations aimed at implementing the joint solutions agreed with the UK. The new rules will make it considerably easier to move a range of goods from Great Britain to Northern Ireland, including agri-food, plants, pets, medicines and certain steel products. At the same time, safeguards will be put in place to protect the EU's single market. SESSION 6: THE EU TRADE POLICY It is also called Common Commercial Policy, and it can be summarised as follows: The main principles of the EU trade policy are found on the general idea of trade liberalisation. In particular: ⚫ For exports: generally, there are no restrictions; exceptions occur in case of dual- use items for example (see below). ⚫ For imports: generally, there are no restrictions, again some restrictions are provided (trade defence measures, see Session 7). Important elements on trade policies are: ⚫ The common external tariff (one of the lowest in the world). ⚫ The multilateral and preferential agreements. The procedure for the conclusion of international agreements at the EU level involves different EU institutions. Step 1) The negotiations are conducted by the Commission on behalf of the EU. Step 2) At the end of the negotiations, the European Parliament is consulted; this reform was introduced in 2007 by the Lisbon Treaty, which widened the European Parliament’s competences. Step 3) Finally, the Council signs and ratifies the agreement. Dual-use items are goods, software and technology normally used for civilian purposes, but which may have military applications, or may contribute to the proliferation of Weaponsof Mass Destruction. The EU controls the export, transit and brokering of dual-use items. These items may berestricted for export. A system based on authorizations and licenses is in place to control trade flows in this domain. The lists of dual use items are ongoingly updated. The multilateral agreements are negotiated within the World Trade Organisation (WTO, see Session 2), which is composed of 166 members as from 2024, representing around 98% of world trade. Its decisions are made by consensus. The objective is the reduction of custom duties during "rounds", i.e., ministerial conferences where the representatives of the Member States meet to negotiate. A great achievement of the WTO is the Dispute Settlement Body: it handles disputesbetween members and its decisions are compelling. It is more effective compared to other international courts. The main WTO principles are against trade discrimination and are provided by the General Agreement on Tariffs and Trade (GATT): Most-favoured-nation treatment (Art. I) “Any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties”. National treatment (Art. III) “The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use”. There are important exceptions to these principles, e.g., Art. XXIV GATT, which allows the establishment of customs unions – such as the EU - or free-trade areas, under certain conditions. In particular: “the purpose of a customs union or of a free-trade area should be to facilitate trade between the constituent territories and not to raise barriers to the trade of othercontracting parties with such territories” (Art. XXIV GATT) See the map of the EU Trade Agreements: Trade development with third countries: the EU offers specific advantages to certain countries, in accordance with the WTO rules. Economic Partnership Agreements (EPAs) and other trade Agreements include a variety of arrangements that favour member parties over non-members by extending tariff and other non-tariff preferences. The generalized scheme of preferences was created following UNCTAD (United Nations Conference on Trade and Development) recommendations in 1971. The 2014 reformed GSP (Generalized scheme of preferences) focuses on the least developed countries. In this context, the EU offers: - Standard GSP for low GDP countries. This means a partial or full removal of customs duties on two-thirds of tariff lines. - GSP+: special incentive arrangement for sustainable development and good governance. It slashes these same tariffs to 0% for vulnerable low- and lower-middle income countries that implement 27 international conventions related to labour and human rights, environmental and climate protection, and good governance. The EBA (Everything But Arms) is a special arrangement for the least developed countries, providing them with duty-free, quota-free access for all products except arms and ammunitions. Trade agreements contribute to the development of the external relations of the EU (which is a larger domain because it includes not only trade issues but also political ones). Examples of trade agreements ⚫ Bilateral agreements: South Korea, Mexico, etc. ⚫ European economic area: the free trade area with Iceland, Norway and Liechtenstein ⚫ Bilateral custom unions: Andorra, San Marino, Turkey ⚫ Southern Neighbourhood ⚫ The European Neighbourhood Policy (ENP) was developed in 2004 ⚫ The European Neighbourhood Policy governs the EU's relations with 16 of its closest Eastern and Southern Neighbours: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Republic of Moldova, Morocco, Syria, Palestine, Tunisia, Ukraine. EU Trade Policy (Common Commercial Policy) 1. Main Principles Trade Liberalization: Primary goal. Export Restrictions: Few restrictions, mainly on dual-use items. Import Restrictions: Generally unrestricted; trade defense measures apply (Session 7). 2. Key Elements Common External Tariff: One of the world's lowest tariffs. Trade Agreements: Includes multilateral, regional, and bilateral agreements. 3. Trade Policy Goals Abolition of Restrictions: Progressively reduces trade restrictions. Investment Liberalization: Includes foreign direct investment. 4. Types of Trade Agreements Multilateral Agreements: Negotiated via the WTO. Preferential Agreements: Often with third countries, aiming to boost trade development. 5. Trade Defense Instruments (Details in Session 7) Antidumping: Measures against below-cost pricing. Countervailing: Addresses unfair subsidies. Safeguard Measures: Protects against sudden import surges. 6. EU Trade Agreement Process 1. Negotiation: Led by the European Commission. 2. Consultation: European Parliament reviews and advises. 3. Ratification: Council finalizes by signing and ratifying. 7. Special Considerations Dual-Use Items: Goods with both civilian and military uses; require licenses. WTO Role: 166 members, 98% of world trade; dispute settlement body enforces compliance. GATT Principles: ○ Most-Favoured-Nation Treatment (MFN): Equal treatment across all nations. ○ National Treatment: Imported goods treated as domestically produced goods. 8. Exceptions to Trade Principles Customs Unions and Free Trade Areas: (e.g., EU) Allow for internal free trade under specific conditions. 9. Trade Development Initiatives Economic Partnership Agreements (EPAs): Special tariff arrangements. Generalized Scheme of Preferences (GSP): ○ Standard GSP: Reduced tariffs for low-income countries. ○ GSP+: Zero tariffs for countries meeting sustainability criteria. ○ Everything But Arms (EBA): Full duty-free access for least developed countries (LDCs), excluding arms. 10. Trade Agreements and Relations Bilateral Agreements: e.g., South Korea, Mexico. European Economic Area (EEA): Free trade with Iceland, Norway, Liechtenstein. Bilateral Custom Unions: Andorra, San Marino, Turkey. European Neighbourhood Policy (ENP): Focus on closer trade ties with 16 Eastern and Southern neighbors SESSION 7: THE EU TRADE DEFENSE INSTRUMENTS Their objective is protecting the EU industry against unfair practices by third countries. SAFEGUARD MEASURES →Safeguards are intended for situations in which an EU industry is affected by an unforeseen, sharp and sudden increase of imports. They are erga omnes measures (opposed to all): “against imports from the rest of the world” (the measures apply to all countries without discrimination, although developing countries with low import shares can be excluded). Stringent conditions apply on the increase of imports: unpredictable severe and sudden. They represent a temporary breathing space to make necessary adjustments for the domestic industry (urgent need to restructure). The EU provisions one more requirement: the measure shall not be against the EU interest (it allows to take into account the interest not only of the EU producers, but also of importers, users, customers, etc.). ANTI-SUBSITY/COUNTERVEILING MEASURES →If an imported product has received State aids, the EU may impose countervailing duties to neutralise the benefit of such a subsidy. Endowments distort competition by making subsidized goods artificially competitive (e.g., cheaper). The requirements to apply the measures are the following: the imports benefit from a subsidy there is injury (i.e., damage) suffered by the EU industry there is a causal link between the injury and the subsidised imports. The EU provisions add one more requirement: the imposition of measures is not against the Union's interest: all stakeholders' interests are to be considered (importers, users, customers, etc.) that revolve around producers. The EU may impose countervailing duties to neutralise the benefit of the subsidy only if it is limited to a specific firm, industry or group of firms or industries. ANTI-DUMPING MEASURES →Producers of a third country sell in Europe at a price lower than the price on their own market or under their production cost; the EU may impose antidumping duties to neutralise the difference of the price. The requirements to apply the measures are the following: Dumping: a company is exporting a product to the EU at prices lower than the normal value of the product on its own domestic market There is injury (i.e., damage) caused to the EU industry There is a causal link between the injury and the dumped imports. The EU provides one more requirement: the imposition of measures is not against the Union's interest: all stakeholders' interests are to be considered (importers, users, customers, etc.) that revolve around producers. States may have different approaches to trade: Moreover, in a given State, different interests are at stake: DIFFERENT MEASURES AND REVIEWS The measures can be provisional or definitive. Provisional during investigations: they may be imposed in critical circumstances and if a preliminary determination provides clear evidence of harm or obstructive harm. Definitive measures are imposed at the end of the investigation measures, if applicable. The measures end after 5 years, unless a specific expiry review is initiated. They may be subject to intermediate reviews if, for example: the circumstances of the exporters have changed new exporting producers request an accelerated review. TYPES OF DUTIES Countervailing and Anti-dumping measures can usually the form of duty: ad valorem duty, a percentage of the net, free-at-EU frontier (CIF) price (it is the most common form of duties) specific duty, a fixed value for a certain amount of goods, e.g., €100 per ton of a product variable duty, a minimum import price (importers in the EU do not pay an anti-dumping duty if the foreign exporter’s export price to the EU is higher than the minimum import price). The duty is paid by the importer and collected by the customs of the EU country of arrival. The Commission monitors import volumes and prices of all products subject to measures, in order to identify and to react to circumvention and other irregularities; ANTIDUMPING AND COUTERVAILING INVESTIGATIONS The procedure is composed of different steps. The Commission: 1. has received a valid complaint from an EU industry 2. decides to launch an investigation within 45 days 3. publishes a Notice of Initiation in the EU's Official Journal, detailing the product under investigation, the country/countries to be investigated, the rights and obligations of interested parties to the proceeding, and the deadlines which will apply 4. sends a questionnaire to exporters, Union producers, importers, users (in the case of countervailing, also public authorities in the country/countries concerned). Parties who do not reply to the questionnaire are considered to be not cooperating with the investigation: the Commission will continue the investigation and may use other available information. The duty imposed on a non-cooperating exporter is likely to be higher than if it had cooperated. The Commission verifies the information submitted in response to the questionnaires, usually by inspection at the company’s premises (verification visits). CIRCUMVENTION OF THE DUTIES Circumvention is a conduct undertaken by exporters in order to evade antidumping duties imposed by importing countries. It affects trade defence measures making them ineffective. It causes a waste of time and resources both for public authorities and stakeholders. Historical background 1987: the EU adopts the first anti-circumvention regulation against Japanese’s practices of “screwdriver type assembly” (i.e., establishing an assembly plant in the importing country to avoid the imposition of the duties) 1988: the US adopts anti-circumvention provisions in the Trade Act (against Korean practices) WTO’s position: no new anti-circumvention rules in anti-dumping laws should conflict its own rules The lack of anti-circumvention rules in the WTO Agreements implies that WTO Member →States may provide their own regulatory regime. The EU anti-circumvention rules provide the following requirements: a change in the pattern of trade between the third countries and the EU a practice where tax duties outweigh the core economic/business injury (i.e., prejudice, or undermining of the remedial effects of the duty) persisting dumping/subsidies. An example of circumvention practices is transhipment. Trans-shipment means shipping goods to an intermediate destination. It is different from trans-loading, which is the change of the means of transport. Common uses of transhipment: ❖ Where there is no direct link between the initial and final countries ❖ If the intended port of entry is blocked ❖ In order to hide the identity of the country of origin – only this case is illegal. Transhipment consumes little cash and time compared to the “screwdriver type assembly”, another kind of circumvention practice. There are different kinds of the circumvention practices, that can be also combined: transhipment and/or assembly operations importation of the slightly modified product concerned (by changing its customs code to avoid the imposition of the duties) Transhipment is the most frequent practice. The large majority of EU circumvention investigations terminates with the extension of the duties. Although in certain sectors circumvention is recurring, it is not a growing practice. If you are interested in the topic, you can read the following articles: MUKUNOKI Hiroshi, Trade liberalization and incentives to implement antidumping protection, International Review of Economics & Finance (2021), 72, 422-437. FORGANNI Antonella, REED Heidi, Circumvention of Trade Defence Measures and Business Ethics, Journal of Business Ethics (2019) 155(1), 29-40. EU–UK Trade and Cooperation Agreement (TCA): Key Information about the TCA 1. Effective Date: Signed on December 30, 2020, and came into effect on January 1, 2021. 2. Main Features: ○ Trade in Goods: Tariff-free and quota-free trade for goods, subject to rules of origin requirements. Customs checks and regulatory compliance are required, leading to increased trade frictions. ○ Trade in Services: Limited access for services, especially in financial services, losing "passporting rights." Services trade does not enjoy the same tariff-free benefits as goods. ○ Fisheries: EU access to UK waters will decrease over a 5.5-year period, followed by annual negotiations. Quotas will adjust to provide the UK a larger share of fishing rights. 3. Level Playing Field: ○ Includes provisions to ensure fair competition, covering labor rights, environmental protections, and state aid. ○ Mechanisms to address significant regulatory divergence. 4. Mobility: ○ Ended free movement of people; UK citizens can travel to the EU visa-free for short stays (up to 90 days). ○ No general rights to live and work in each other's territories. 5. Security and Judicial Cooperation: ○ Provisions for cooperation in law enforcement, data sharing, and security measures, though with reduced access compared to EU membership. 6. Governance: ○ Establishes a Joint Partnership Council to oversee the agreement. ○ Provides an arbitration mechanism for dispute resolution. Impact of the TCA Increased Trade Frictions: New customs checks and documentation requirements, especially affecting small and medium-sized businesses. Service Sector Challenges: Reduced access for the UK’s service industries, notably financial services. Supply Chain Adjustments: Businesses need to adapt to new trade rules and may reconfigure supply chains. The TCA represents a significant shift in the relationship between the UK and EU, aiming to balance independence for the UK with continued cooperation in various areas. SESSION 8: COMPETITION POLICY: ANTITRUST CASE STUDY: 1. Does the policy of fidelity rebates and the price policy of DPAG represent an infringement of EU Law? Yes, DPAG’s policies of fidelity rebates and below-cost pricing appear to infringe EU competition law, specifically under Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position. DPAG’s practices raise several concerns: Abuse of Dominant Position: DPAG holds a statutory monopoly in Germany for certain postal services and is the only national provider of parcel and catalogue delivery services meeting the needs of the mail-order trade. This statutory monopoly and its market dominance imply a responsibility to avoid anti-competitive practices. Cross-Subsidization and Predatory Pricing: By using profits from its reserved letter-post monopoly to finance below-cost selling in the competitive parcel services market, DPAG is engaging in cross-subsidization, an abusive practice if it is used to maintain market power or push out competitors. Fidelity Rebates: By providing significant fidelity rebates to large customers, DPAG limits competitors' ability to gain a "critical mass" necessary to sustain operations. Such rebates have been considered anti-competitive under EU case law when they create exclusivity arrangements, discourage switching, or create a "tying effect." Together, these practices likely restrict competition by preventing other companies from entering or expanding in the parcel service market, which could be interpreted as an infringement under EU law. 2. UPS asks your opinion about this case. What do you suggest to do to protect its interest? UPS could take several steps to protect its interests: File a Complaint with the European Commission: Since the case involves potential anti-competitive practices across Member States, UPS should submit a formal complaint to the European Commission’s Directorate-General for Competition. This would prompt an investigation into DPAG’s pricing and rebate practices. Demand Interim Measures: UPS can request interim measures to prevent DPAG from continuing these anti-competitive practices while the investigation is ongoing. This could include an immediate cessation of below-cost pricing and fidelity rebates. Provide Evidence of Market Impact: UPS should supply the Commission with data showing how DPAG’s cross-subsidies and loyalty rebates hinder competition, limit UPS’s ability to operate profitably, and prevent effective market entry. Seek Damages for Anti-Competitive Practices: If the Commission finds that DPAG infringed competition laws, UPS might be able to claim damages in national courts for the losses incurred due to DPAG’s anti-competitive behavior. 3. In this context, what is the competent authority? Which kind of powers is it entitled with? The competent authority for investigating and ruling on this matter is the European Commission (DG Competition), as this case involves cross-border competition issues and potential abuse of dominance in a substantial part of the EU market (Germany). The European Commission has extensive powers in competition cases, including: Investigative Powers: It can gather evidence, request documents, conduct on-site inspections ("dawn raids"), and question individuals. Interim Measures: The Commission can impose temporary measures to stop practices that may cause serious and irreparable harm to competition while an investigation is underway. Infringement Decisions: If it finds a violation, the Commission can issue a decision declaring the infringement and requiring the company to cease the anti-competitive practices. Impose Fines and Penalties: The Commission can levy substantial fines—up to 10% of the company’s global annual revenue. Structural Remedies: If necessary, it can require structural changes to restore competition, such as divesting parts of the business. 4. Which argument could DPAG hold to defend its position? On the basis of the information provided, do you think that it has chances to succeed? DPAG might defend its position by arguing: Economies of Scale and Efficiency: DPAG could argue that its fidelity rebates and pricing policies are based on economies of scale, aiming to provide customers with cost-efficient services by fully utilizing its delivery infrastructure. Customer Benefit: It could argue that its policies lower costs for customers, particularly large-volume clients, and improve service quality, which could be seen as beneficial to consumers. Necessity of Pricing Strategy: DPAG might claim that its pricing strategy is necessary to compete against other large players like UPS in the B-to-B parcel market and maintain profitability in a highly competitive segment. Lack of Anti-Competitive Intent: DPAG could argue there was no intent to eliminate competition but rather to provide competitive prices in an open market. However, given the case details, DPAG’s chances of a successful defense seem low. The European Commission and EU courts typically view cross-subsidization and fidelity rebates by dominant firms unfavorably, especially when such practices prevent competition in open markets, which appears to be the case here. Therefore, DPAG’s arguments may not hold much weight if the Commission determines that these practices harm competition. 5. In this case, is it possible to impose a sanction? If yes, which kind/kinds of sanctions and on whom? Yes, it is possible to impose sanctions on DPAG if it is found to have violated EU competition laws. Possible sanctions include: Fines: The European Commission can impose fines of up to 10% of DPAG’s global revenue. This fine would aim to deter future anti-competitive practices. Cease and Desist Orders: The Commission could order DPAG to stop its below-cost pricing and fidelity rebate practices in the parcel services market. Repayment of State Aid (if applicable): If DPAG used profits from a state-sanctioned monopoly to subsidize its parcel services, the Commission could classify this as illegal state aid. In that case, DPAG might be required to repay any aid received. Structural Remedies: In rare cases, the Commission could impose structural changes, such as requiring DPAG to separate its letter-post monopoly from its competitive parcel services business, to prevent future anti-competitive practices. COMPETITION POLICY: The main objective of the EU competition rules is to enable the proper functioning of the EU’s internal market. The Treaty on the Functioning of the European Union (TFEU) aims to prevent restrictions on and distortions of competition, such as the abuse of dominant positions, anti-competitive agreements, and mergers and acquisitions should they reduce competition. Furthermore, State aid is prohibited when it leads to distortions of competition, but can be authorised in specific cases. LEGAL BASIS: Articles 101 to 109 TFEU and Protocol No 27 on the internal market and competition, which make clear that a system of fair competition forms an integral part of the internal market, as set out in Article 3(3) of the Treaty on European Union; The Merger Regulation (Council Regulation (EC) No 139/2004) and its implementing rules (Commission Regulation (EC) No 802/2004); Articles 37, 106 and 345 TFEU for public undertakings and Articles 14, 59, 93, 106, 107, 108 and 114 TFEU for public services, services of general interest and services of general economic interest; Protocol No 26 on services of general interest; Article 36 of the Charter of Fundamental Rights of the European Union OBJECTIVES: Competition policy is a key instrument for achieving a free, dynamic and functioning internal market and promoting general economic welfare. Competition enables businesses to compete on equal terms across Member States, while at the same time incentivising them to strive to offer the best products at the lowest price for consumers. This, in turn, drives innovation and spurs long-term economic growth. EU competition policy also applies to non-EU businesses that operate in the internal market. Societal, economic, geopolitical and technological changes pose challenges to EU competition policy. In 2020, the Commission launched a comprehensive review of the EU antitrust, merger and State aid rules. The November 2021 Commission communication on a competition policy fit for new challenges summarises the key elements of that review. It also highlights how the policy review helps to promote the EU’s post-pandemic recovery and create a more resilient internal market to foster the implementation of the European Green Deal and to accelerate the digital transition. In an increasingly digitalised economy, new tools have become necessary to address emerging challenges. The Digital Markets Act, finalised by the co-legislators in September 2022, aims to keep digital markets fair and contestable and introduces ex ante regulation for so-called gatekeeper online platforms. A number of other initiatives intended to reinforce the EU’s open strategic autonomy in a global context have been launched. For example, the new Regulation on Foreign Subsidies seeks to address potential distortive effects of foreign subsidies in the internal market, in particular in the context of public procurement and mergers COMPETITION POLICY TOOLS: Broadly speaking, the EU competition policy toolbox includes rules on antitrust, merger control, State aid, and public undertakings and services. →Antitrust aims at restoring competitive conditions, e.g. in case of the formation of cartels or abuse of dominance. Preventive competition policy tools encompass merger control and State aid rules. →Merger control pre-empts potential distortions of competition by assessing in advance whether a potential merger or acquisition could have an anti-competitive impact. → State aid rules aim to prevent undue state intervention wherever preferential treatment of given undertakings or sectors distorts, or is likely to distort, competition and adversely affects trade between Member States. Services of general economic interest (SGEI) are particularly important to consumers and are subject to specific rules in the context of State aid, with a view to promoting social and territorial cohesion, a high level of quality, safety and affordability, and equal treatment ANTI TRUST Comprehensive ban on anti-competitive agreements (Article 101 TFEU) Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits agreements between companies which prevent, restrict or distort competition in the EU and which may affect trade between Member States (anti-competitive agreements). These include, for example, price-fixing or market-sharing cartels →Anti-competitive agreements are prohibited regardless of whether they are concluded between companies that operate at the same level of the supply chain (horizontal agreements) or at different levels (vertical agreements). →Article 101 can be applied by the European Commission or by the competition authorities of the EU Member States →Article 101 cases can originate in: 1) a complaint, 2) opening of an own–initiative investigation, or 3) a leniency application from one of the participants to a cartel. LENENCY PROGRAMM: the first firm to submit evidence that is sufficient for the Commission to either launch an inspection or enable it to find an infringement receives full exemption from its fine (total immunity). When it applies for immunity, the firm must also end its participation in the infringement. Firms that approach the Commission later and that contribute a real added value to the investigation are eligible for a fine reduction, subject to the same on-going cooperation as for immunity applicants. The European Commission enforces Article 101 through investigations as per the Antitrust Regulation, with powers to request information, inspect company premises, examine and copy business records, and interview staff. If initial investigations indicate potential anti-competitive practices, the Commission may prioritize an in-depth investigation or close the case. In cartel cases, it assesses the suitability for a settlement process. If the investigation substantiates competition concerns, the Commission issues a statement of objections (SO) to the companies, who then have the right to respond and request a hearing. Based on these responses, the Commission may either drop some objections or proceed with a prohibition decision, which then undergoes review by an Advisory Committee before final adoption by the College of Commissioners. Alternatively, companies can offer commitments to address concerns, allowing the Commission to settle the case without declaring an infringement or imposing fines. For infringements, fines are calculated based on the severity, duration, and aggravating or mitigating circumstances, with a cap at 10% of the company's annual turnover. Companies can appeal Commission decisions to the EU General Court and further to the European Court of Justice (ECJ) on legal grounds. In cartel cases, a settlement procedure may reduce fines if companies admit to their involvement, expediting the resolution. Additionally, victims of anti-competitive practices can seek damages through national courts, using the Commission’s decisions as proof of illegal behavior. Collusion between companies distorts the level playing field and causes harm to consumers and other businesses. Agreements between undertakings, such as cartels, are prohibited and automatically void. However, agreements may be exempted if they contribute to improving the production or distribution of goods or if they promote technical or economic progress. The conditions for granting an exemption are that consumers are allowed a fair share of the resulting benefit and that the agreement does not impose unnecessary restrictions or aim to eliminate competition for a substantial part of the products concerned. Rather than such exemptions being granted on a case-by-case basis, they are most commonly governed by Block Exemption Regulations. These regulations cover groups of similar specific agreements, which usually have a comparable impact on competition. In May 2022, the Commission adopted the revised Vertical Block Exemption Regulation. It also reviewed the two Horizontal Block Exemption Regulations, together with the relevant guidelines. Finally, certain agreements are not regarded as infringements if they are of minor importance and have little impact on the market (the de minimis principle). Such agreements are often seen as useful for cooperation between small and medium-sized enterprises. In February 2024, a revised market definition notice was adopted by the Commission, the first revision of the notice since 1997. It covers the definition of markets in antitrust and merger cases. It brings the guidance into line with new market realities, such as digital markets, and with developments in the Commission’s case practice and EU case-law, and it substantially widens the concept of ‘relevant market’. →Prohibition of abuse of a dominant position (Article 102 TFEU) Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits abusive conduct by companies that have a dominant position on a particular market. An Article 102 case dealt with by the European Commission or a national competition authority can originate either upon receipt of a complaint or through the opening of an own–initiative investigation In an Article 102 investigation, the European Commission first assesses whether a company holds a dominant position in a specific market by defining both the product and geographic markets. A dominant position is indicated by a high and sustained market share (generally above 40%) and other factors such as market entry barriers and company resources. Holding dominance is not illegal; however, a dominant company must avoid abusing its position, such as through exclusive purchasing agreements, predatory pricing, or charging excessive prices. The Commission has investigative powers to enter company premises, inspect records, and interview staff. If dominance and abuse are suspected, the Commission issues a statement of objections (SO), outlining the case to the companies, who can then defend themselves by accessing investigation files, responding in writing, or requesting a hearing. After review, the Commission may either close the case or proceed with a prohibition decision, reviewed by an Advisory Committee and adopted by the College of Commissioners. Alternatively, the Commission may accept commitments from the company to address competition concerns without proving an infringement. These commitments become legally binding, with fines possible if breached. Fines aim to deter anti-competitive behavior, calculated based on the severity and duration of the infringement, capped at 10% of the company’s global turnover. Companies have the right to appeal Commission decisions to the EU General Court and, on legal grounds, to the European Court of Justice. Additionally, victims of competition breaches may seek damages through national courts, and companies can be found collectively dominant in specific cases, though this is less common. According to the Court of Justice of the EU (CJEU), a dominant position is ‘a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers’. It is assessed in relation to the internal market as a whole, or at least a substantial part of it. A dominant position is not, in itself, an infringement of EU competition law, and the holders of such positions are allowed to compete on merit. However, a position of dominance confers on the undertaking a special responsibility to ensure that its conduct does not distort competition. Examples of behaviours that would amount to abuse of a dominant position include setting prices at below cost level (predation), charging excessive prices, tying and bundling, and refusal to deal with certain counterparts. In addition, the Digital Markets Act sets out specific obligations for the so-called gatekeeper online platforms. Once an entity is designated as gatekeeper by the Commission, it is obliged to comply with certain obligations or bans on certain behaviours as envisaged in the law (such as self-favouring, pre-installation and tying of certain software products, etc.). Those obligations are supplementary to the general competition rules, which continue to apply. Almost immediately after the obligations became applicable, the Commission opened several non-compliance investigations. LENIENCY PROGRAM The European Commission’s leniency program provides companies involved in cartels with the opportunity to receive full or partial immunity from fines if they disclose information about the cartel and cooperate with the investigation. This program, formalized in the 2006 Leniency Notice, is aimed at uncovering secret cartels and has a strong deterrent effect by destabilizing cartel operations and creating distrust among members. Under the program, the first company to report a cartel and supply sufficient evidence can receive full immunity from fines, provided it meets specific conditions. Other cartel participants who come forward later, even after an investigation has started, may still qualify for reduced fines if they contribute substantial new evidence, known as "significant added value." The reduction levels vary based on the order of applicants: the first subsequent applicant can receive a 30-50% reduction, the second 20-30%, and any others up to 20%. The program enhances transparency and accessibility through published FAQs, which clarify the application of leniency policies, including protections for leniency applicants in other legal contexts. Given that early reporting influences the level of leniency, companies are encouraged to apply promptly. SESSION 9: MERGERS AND STATE AIDS MERGER CONTROL The European Commission reviews mergers to ensure they do not harm competition within the EU. While mergers can lead to benefits like improved efficiency and innovation, they may also risk reducing competition, leading to higher prices, fewer choices, or reduced innovation for consumers. The Commission's objective is to prevent mergers that would harm the competitive market structure. Mergers involving companies that operate across EU Member States and meet certain turnover thresholds are reviewed by the Commission under a "one-stop shop" system, allowing companies to seek EU-wide approval in a single process. Even mergers between non-EU companies are subject to review if they affect the EU market. Below these thresholds, mergers are assessed by the relevant national competition authorities within Member States. Under Article 22 of the EU Merger Regulation, national authorities can also request that the Commission examine specific mergers. The Commission assesses whether a merger significantly impedes competition. If the merger does not pose competitive concerns, it is approved unconditionally. However, if it could harm competition—such as by creating or strengthening a dominant player—the Commission may prohibit the merger unless the companies offer commitments to mitigate the concerns. In many cases, the Commission conditionally approves mergers when the merging firms agree to corrective measures, like selling parts of their business or licensing technology to competitors. These conditions aim to maintain competition, and the Commission monitors compliance to ensure the commitments are fulfilled. Under the EC Merger Regulation (EC) No 139/2004, concentrations, which would significantly impede effective competition in the internal market or in a substantial part of it, in particular through the creation or strengthening of a dominant position, must be declared incompatible with the common market (Article 2(3)). The Commission must be notified of planned mergers if the resulting company would exceed certain thresholds (so-called concentrations with a Community dimension). Below those thresholds, national competition authorities can review mergers. The merger control rules equally apply to companies based outside the EU, if they do business in the internal market. The review process is triggered when control is acquired over another undertaking (Article 3(1)). After an assessment of the likely impact of the merger on competition, the Commission may approve or reject it, or it can grant an approval, subject to certain conditions and obligations (Article 8). There is no systematic subsequent scrutiny or unbundling of associated companies. Following a lengthy review process that started in 2014, the Commission amended its Merger Implementing Regulation and a notice on simplified procedure. The new rules have applied since September 2023. Specific cases where Member States may ask the Commission to examine any concentration that does not have a Community dimension were further defined in a Commission communication on 26 March 2021. PROHIBITION OF STATE AID The European Commission regulates State aid to prevent unfair competitive advantages that may arise from government support. According to Article 107 of the Treaty on the Functioning of the European Union (TFEU), State aid is generally prohibited unless it meets specific conditions allowing exceptions. State aid involves government intervention that selectively benefits certain businesses or sectors, potentially distorting competition and affecting trade between Member States. For a measure to be classified as State aid, it must: 1. Involve state intervention using public resources (such as grants, tax relief, or preferential terms). 2. Provide a selective advantage to certain companies or industries. 3. Distort or potentially distort competition within the EU. 4. Impact trade between Member States. General subsidies or measures available to all businesses (like general taxation rules) do not fall under the category of State aid. Permitted Exemptions Some government interventions are necessary for broader economic goals, so the EU allows exemptions for certain types of State aid. For example, aid may be compatible with EU rules if it supports specific public policy objectives, like regional development, research and innovation, or environmental protection. EU Control and Notification Requirements The EU requires that new State aid measures be pre-notified to the Commission, and they cannot be implemented until approval is granted. However, there are exceptions, such as: Aid under a Block Exemption Regulation, which automatically complies with EU State aid rules. De minimis aid, which is minimal support not exceeding €200,000 per undertaking over three fiscal years. Aid granted under pre-approved schemes. Once notified, the Commission conducts a preliminary investigation within 20 working days to assess whether: 1. The measure does not qualify as State aid. 2. The measure is compatible with EU rules. 3. There are unresolved concerns that require an in-depth investigation. If aid is found to be incompatible, the Commission can mandate that it be recovered from the recipient. Sector Inquiries and Complaints: The Commission can initiate sector inquiries to examine how State aid affects competition across Member States, particularly when existing aid frameworks may be outdated. Additionally, companies and consumers can lodge complaints with the Commission to prompt investigations into suspected State aid abuses. Transparency and Monitoring: The State aid transparency public search tool provides access to information on State aid awards, detailing the beneficiary, amount, location, sector, and purpose of the aid. This transparency aims to promote accountability and reduce informational imbalances in the market. The State Aid Scoreboard is an annual report published by the European Commission, summarizing State aid spending and regulatory compliance across Member States. Launched in 2001, the Scoreboard allows the public to monitor State aid trends and regulatory enforcement, thus enhancing transparency and accountability in State aid policy. Article 107 TFEU contains a general prohibition of State aid in order to prevent distortions of competition in the internal market that could result from the granting of selective advantages to certain companies. All direct aid granted by Member States (e.g. non-repayable subsidies, loans on favourable terms, tax and duty exemptions, and loan guarantees) as well as similar advantages are banned. The TFEU leaves room to grant certain exemptions from this general ban, if they can be justified by specific overarching policy objectives, for example addressing serious economic disturbances or for reasons of common European interest. During the COVID-19 outbreak, the Commission adopted the State aid temporary framework to address serious economic disturbances caused by the pandemic; the framework has already been phased out. In March 2022, the Commission adopted a temporary crisis framework, which has since been broadened further, to enable Member States to use the flexibility given under State aid rules to support the economy in the context of Russia’s invasion of Ukraine. In March 2023, the Commission further transformed the temporary framework into the Temporary Crisis and Transition Framework, by adding measures to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. As a consequence, by having new aims added, the essence of EU competition policy is currently undergoing profound changes, which might be considered a departure from decades of practies In the past, similar steps were taken in the context of the global financial crisis to prevent major negative spillover effects for the entire financial system due to the failure of an individual financial institution. Member States are required to notify the Commission of any planned State aid, unless it is covered by a general block exemption (as set out in Commission Block Exemption Regulation for State aid) or by the de minimis principle. State aid measures can be implemented only if the Commission has granted approval. In some cases, the Commission has considered preferential tax treatment for selected companies to be unlawful State aid. Several of those cases are currently subject to legal investigation by the CJEU. The Commission has the power to recover incompatible State aid. Since 2021, the Commission has completed a range of reviews of different aspects of the EU’s State aid policy, resulting in new guidelines on State aid for climate, environmental protection and energy, a revised communication on State aid rules for important projects of common European interest (IPCEIs) and revised guidelines on State aid to promote risk finance investments, among others. Since 2018, about one IPCEI has been approved per year. →THE TEMPORARY CRISIS & TRANSITION FRAMEWORK The Temporary Crisis and Transition Framework was established by the European Commission to enable Member States to provide State aid in response to the economic impacts of Russia's invasion of Ukraine, addressing high energy prices and supporting the transition to a net-zero economy. This framework builds upon the previous Temporary Crisis Framework, initially adopted in March 2022, and has since undergone several amendments to adapt to changing economic conditions and specific sectoral needs. Key Amendments and Provisions: 1. Initial Adoption and Purpose (March 2022): ○ Enabled temporary aid to companies affected by the war, ensuring liquidity, compensating for energy price spikes, and encouraging energy savings. ○ Integrated with the EU’s REPowerEU plan, focusing on energy independence and renewable energy support. 2. Amendments for Energy and Renewable Focus (July and October 2022): ○ Extended framework duration, introduced aid for renewable energy projects, energy storage, and industrial decarbonization. ○ Adjusted to address new EU regulations on energy prices and secure winter energy supplies. 3. Transition to Net-Zero Economy (March 2023): ○ Renamed as the Temporary Crisis and Transition Framework, it supports the EU Green Deal goals by allowing aid for renewable energy, energy storage, and industrial decarbonization until the end of 2025. ○ Included provisions to boost production in critical green sectors, such as batteries, wind turbines, and carbon capture technology. 4. Aid Limits and Adjustments for Energy Costs (November 2023 and May 2024): ○ Increased aid ceilings for winter heating and prolonged targeted support for the agriculture, fishery, and aquaculture sectors until December 2024. ○ Gradual phase-out of some crisis measures by mid-2024, with only the most critical green transition aids continuing until 2025. Overall, the Temporary Crisis and Transition Framework aims to stabilize EU markets affected by the war in Ukraine while advancing sustainable energy initiatives central to the EU's climate and energy independence goals. PUBLIC SERVICES OF GENERAL ECONOMIC INTEREST In some Member States, certain essential services (e.g. electricity, post and rail transport) are still provided by public undertakings or undertakings controlled by public authorities. Such services are considered to be SGEIs and are subject to specific rules in the context of the EU State aid framework. Article 36 of the Charter of Fundamental Rights of the European Union also recognises the access that European citizens should have to SGEIs. ENFORCEMENT Rigorous and effective enforcement of the EU competition rules is essential to ensure the achievement of the competition policy objectives. The Commission is the main body responsible for ensuring the correct application of these rules and has wide-ranging inspection and enforcement powers. However, Council Regulation (EC) No 1/2003 allows national antitrust authorities and courts to have an enhanced enforcement role, which was reinforced by Directive (EU) 2019/1. Coordination of national and EU enforcement is supported by the European Competition Network (ECN), in which the Commission, national competition authorities and courts cooperate to ensure that EU competition rules are enforced effectively and applied consistently. The cooperation procedure is laid down in Council Regulation (EC) No 1/2003 and was reinforced by Directive (EU) 2019/1 (ECN+). In the area of antitrust law, the Actions for Damages Directive was adopted in 2014 to provide better protection for market participants harmed by prohibited agreements (cartels and abuse of a dominant position) and to heighten the deterrent effect on those practices. It facilitates the process for obtaining compensation for harm. ROLE OF THE EUROPEAN PARLIAMENT In competition policy, Parliament’s principal role is scrutiny of the executive. The Commissioner for Competition appears several times a year before Parliament’s Committee on Economic and Monetary Affairs (ECON) to explain the approach taken and discuss individual decisions. With regard to the adoption of competition policy legislation, Parliament is usually involved only through the consultation procedure. However, the ordinary legislative procedure can be applied, such as for the adoption of the above-mentioned directives on actions for damages and measures to strengthen the competition authorities of the Member States (ECN+ Directive). During the eighth parliamentary term (2014-2019), the Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 1, TAXE 2 and TAXE 3) analyzed the measures taken to assess the compatibility of tax rulings in the Member States with State aid rules and the possibility of further clarifying the rules on the reciprocal exchange of information. In September 2020, the Subcommittee on Tax Matters (FISC) was created to continue this work and ensure that Parliament promotes fair taxation at national, EU and global level. Parliament continues to monitor the developments in competition policy and the Commission’s work in this field. The dedicated ECON Competition Working Group and Parliament’s yearly resolutions on the Commission’s annual report on competition policy provide policy input and guidance for Parliament’s view on addressing the EU’s competition policy challenges. CASE STUDY: The European Commission is investigating a possible State aid violation in this case. The target of the investigation is Nike and Converse’s tax treatment in the Netherlands, specifically how the Dutch tax rulings may have given these companies an unfair competitive advantage by allowing them to pay less tax than their competitors. Details of the Investigation 1. Focus of the Investigation: The Commission’s investigation centers on whether the Netherlands’ tax rulings allowed Nike European Operations Netherlands BV and Converse Netherlands BV to significantly reduce their taxable income in the Netherlands. This was allegedly achieved by licensing intellectual property (IP) rights from Nike affiliates, allowing royalty payments that reduced their taxable profit in the Netherlands. 2. Possible Violation: The Commission suspects that these tax rulings may amount to illegal State aid under EU competition law (Article 107 TFEU), which prohibits Member States from providing selective advantages to specific companies if it distorts competition within the EU. By reducing the taxable base for Nike and Converse in the Netherlands, the tax rulings may have provided Nike with a selective financial benefit unavailable to other companies operating on market terms. 3. Procedure: ○ In-Depth Investigation: The Commission's in-depth investigation is a formal step that provides the Netherlands and third parties (e.g., other companies or Member States) the opportunity to submit comments and information. ○ Purpose: The investigation seeks to determine whether the tax rulings were selective advantages that distort competition by favoring Nike over other companies with similar operations in the EMEA region. ○ Outcome: The opening of an investigation does not imply guilt. If the Commission finds that these tax rulings constitute unlawful State aid, the Netherlands may be required to recover the unpaid taxes from Nike and Converse, bringing their tax obligations in line with market conditions. This investigation is part of the European Commission’s broader scrutiny of tax practices in Member States, aimed at ensuring that large corporations do not benefit from preferential tax treatment that can harm competition across the EU SESSION 10: IPR’s : Copy right and Classification When you create an original literary, scientific and artistic work, such as poems, articles, films, songs or sculptures, you are protected by copyright. Nobody apart from you has the right to make the work public or reproduce it. In EU countries, copyright protects your intellectual property until 70 years after your death or 70 years after the death of the last surviving author in the case of a work of joint authorship. Outside of the EU, in any country which signed the Berne Convention , the duration of copyright protection can vary but it lasts until at least 50 years after the author's death. Copyright protection grants you the following exclusive rights: economic rights – guaranteeing you have control over your work and remuneration for its use through selling or licensing moral rights – usually protecting your rights to claim authorship (right of attribution) and to refuse a modification of your work (right of integrity) How to obtain copyright protection If you create literary, scientific and artistic work, you automatically have copyright protection, which starts from the moment you create your work, so you don't need to go through any formal application process. However, you may need to advise other people that you are the author of that work. You can attach a copyright notice to your work – such as the "all rights reserved" text, or the © symbol – together with the year the work was created. You can also register your copyright via a dedicated service provider, which can be useful to prove the existence of your work at a certain point in time. →The European Commission is updating EU copyright rules to align with the digital age and changing consumer behaviors, aiming to support cultural diversity and protect the interests of creators. Copyright laws are vital for ensuring that creators like authors, musicians, and filmmakers receive fair compensation, recognition, and protection for their work, which boosts the creative economy and supports millions of jobs in Europe. Core Elements of EU Copyright: Types of Rights: ○ Economic Rights: Give creators control over the use and distribution of their work and the ability to receive payment, often through exclusive rights to reproduce and communicate their works. ○ Moral Rights: Allow creators to claim authorship and protect their work from derogatory treatment, though these rights are not standardized across the EU. Licensing and Collective Management: Licensing is the primary means for managing these rights, where creators or collective management organizations grant permissions for use. Recent EU laws aim to improve collective licensing, including multi-territorial licenses. Exceptions to Copyright: EU copyright laws include specific exceptions that allow certain uses of protected content without needing permission, aiming to balance creators' rights with public interest. The EU has partially standardized enforcement measures against copyright violations. EU’s Role in Harmonization and International Engagement: The EU has taken steps to harmonize copyright protections, reduce transaction costs, and promote user choice through: Establishing a regulatory framework and encouraging dialogue among stakeholders, Leading international discussions, resulting in global treaties like the Beijing and Marrakesh treaties that expand protections for audiovisual performances and accessible content for the visually impaired. Additionally, the EU has facilitated initiatives for cultural preservation, such as the Orphan Works Directive, to support digitizing and sharing Europe’s cultural heritage. The European Commission has referred 11 EU Member States to the Court of Justice of the EU for failing to fully implement two key copyright Directives. These Directives, Directive (EU) 2019/790 on copyright in the Digital Single Market and Directive (EU) 2019/789 on certain online transmissions, aim to modernize copyright laws to suit the digital age. Non-compliance on Digital Copyright Rules: Bulgaria, Denmark, Finland, Latvia, Poland, and Portugal did not complete the required national transposition for Directive (EU) 2019/790, while Bulgaria, Finland, Latvia, Poland, and Portugal also failed to comply with Directive (EU) 2019/789. Purpose of the Directives: The Directives aim to protect rights holders, encourage content creation, and improve consumer choice by simplifying cross-border licensing and distribution, especially for radio and TV programs. They establish fairer compensation for creators and clear guidelines for online content use and sharing, supporting creators’ income from digital streams and users’ freedom of expression. Infringement Actions: Following the June 2021 transposition deadline, the Commission began infringement procedures, which escalated after repeated failures by certain Member States to notify full compliance. Under Articles 258 and 260(3) TFEU, the Commission can seek financial penalties for these delays to enforce the EU’s copyright laws. Tangible and intangible Property: Property is the right to earn the fruits, use, or disposal of something; it means ownership. It is an « erga omnes » entitlement (« towards all »): it implies the absolute right of disposing of something. →The property may have tangible or intangible nature. The intellectual property (IP) refers to: - The result of creativity - The exclusive rights on immaterial objects. Trade-off Between Intellectual Property and Other Policies Intellectual property rights (IPRs) aim to promote innovation assuring to the creators the exploitation of their works. Such rights may be conflicting with: the objectives of other policies, such as trade policy and competition policy the idea of assuring access to knowledge in the society to assure its progress. The scientific progress implies the constant expansion of the intellectual property rights, as well as new challenges: privacy, products of genetic engineering, ethic and social sensitive issues, AI, etc. Brief Historical Overview At the beginning, the works of art were not signed, - E.g., cave and rock art. From the Antiquity the creators started to become identifiable, but no rights were attributed to them, - E.g., the Greek musicians. In certain cultures, the activity of copying demonstrated the value of the work of art, - E.g., the Chinese painters, copied in hundreds. In the Middle Age, the Christian culture recognised God as the only creator, - E.g., the ancient manuscripts copied in the monasteries. The Introduction of printing in Europe (XV century) implied the attribution of exclusive rights, - E.g., the authorization of printing and publishing was given to bookshop owners/publishers but not to the actual authors. The British Queen Anne’s Act of 1710 is considered to be the first IP modern legislative act. LEGAL SOURCES: → International Level - international agreements establish common principles →Supranational Level - The harmonisation process of the EU: the internal market requires the removal of conflicts between the national legislations and the coordination of intellectual property, competition and free mov of goods. → National level - ex: French IRP code ( 1992): organize in a single text all the relevant rules. CLASSIFICATION Copyrights / Author’s rights In order to promote the creative process, copyrights: protect the author’s personality expressed in his/her work, assure to the author the full exploitation of his/her work. Some differences exist, depending on the legal systems under examination: in common law they are referred to as copyrights and to the criterion of utility E.g., in UK in civil law they refer to author’s rights and to the criterion of right and justice Droits d’auteur in France, Urheberrecht in Germany, Diritto d’autore in Italy. The differences between common law and civil law are more in emphasis than in outcome really. The similar economic, political and

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