EU Law PDF

**[EU LAW]** **[The first step: 1951]** - Origin: European Coal and Steel Community (ECSC) -**Treaty of Paris** (1951); EIF 23 July 1952 -Reaction to the horrors of World War II -**Idea to create a common market for coal and steel (important industries for war)** **-**Fou...

**[EU LAW]** **[The first step: 1951]** - Origin: European Coal and Steel Community (ECSC) -**Treaty of Paris** (1951); EIF 23 July 1952 -Reaction to the horrors of World War II -**Idea to create a common market for coal and steel (important industries for war)** **-**Founding members: The Federal Republic of Germany, Italy, Belgium, France, The Netherlands, Luxembourg **-**CEASED to exist in 2002 after 50 years **[Three important milestones: a common market ]** - **1957 Treaties of Rome: establish the EEC (European Economic Community)** - Focus on creating a common market, with the elimination of all obstacles to intra-community trade in order to merge the national markets into a single market bringing about conditions as close as possible to those of a genuine internal market **[Three important milestones: EU Citizens ]** - **1993:** Treaty of Maastricht: the European Community: from economic goals to environmental protection, consumer protection and education - **Concept of EU citizenship (now TFEU, ART 20):** right to move and reside freely within the territory of the EU member states; right to vote in elections of European parliament and municipal elections of the host member state **[Three important Milestones: The EU:]** - **2009: Treaty of Lisbon** - The European Community was replaced and succeeded by the European Union **(TEU, art 1(3))** - The EU acquired the rights and obligations of the EC - The EU acquired legal personality (**TEU, Art 47)** now has the ability to conclude international treaties and to become a member of international organisations **[Treaties in FORCE TODAY]** - **Treaty on European Union** - **Treaty on the Functioning of the European Union** - **Treaty establishing the European Atomic Energy Community** - **Charter of Fundamental Rights of the European Union** **[What is the EU: an international/supranational organisation with 27 member states:]** Since 1958: Belgium, France, Germany, Italy, Luxembourg, The Netherlands Since 1973: Denmark, Ireland \[the United Kingdom left the Union on 31 January 2020) Since 1981: Greece Since 1986: Portugal and Spain Since 1995: Austria, Finland and Sweden Since 2004: Cyprus, Czechia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia ('eastward enlargement') Since 2007: Bulgaria and Romania Since 2013: Croatia **[The EU is Peace and Security and, amongst others:]** - Single market -- the 4 freedoms of movement - High food and environmental standards - Consumer benefits - Human rights - Global ambitions **[Not a federal state]** What is a federal state: It is a state with a central government with competences binding on all the country, and state governments that have competences to legislate in the state **[Eu v federal states: some differences]** **Legislation:** EU National Ministers (mostly using qualified majority vote) in **Council** must approve it. In Federal States the central government approves: usually approval by the national governments not required **Currency:** Federal States have a single currency for the federation (e.g. US \$). The EU has a Euro Zone but the UK had an opt out and many states cannot yet join. **Tax:** Federal states can raise taxes. The EU does not have general tax raising powers (tax is a prerogative of the Member States) **Army:** Federal states usually have a national army. The EU does not. There is some limited specific military co-operation. **Executive Power:** Some federal countries have directly elected presidents with executive powers. The heads of the European Commission (the EU Civil Service) are appointed by EU national governments. **[The EU has only those powers that have been conferred to it and must act within those limits ]** - The EU and institutions have only such powers as have been conferred on them by the Member States through the TFEU and the TEU (**principal of conferral, TEU, ART 4)** - The EU and its institutions must act within the limits of those powers (**Principal of limited powers) (See ART 5(1), (2), and Article 13(2) TFEU)** - **Principal of proportionality (TEU, Art 5(4))** **TEU, Art 5(4):** 'under the principle of proportionality, the content and form of EU action shall not exceed what is necessary to achieve the objectives of the treaties' the action of the EU must be limited to what is necessary to achieve the objectives of the treaties (criteria: set out in Protocol (No 2) on the application of the principles of subsidiarity and proportionality (annexed to the treaties)) **[The member states have transferred some powers to the EU:]** Areas of **exclusive competence (EU Only) (TFEU, ART 2(1)):** - Examples: TFEU, Art 3(1): customs union; establishing of the **competition rules** necessary for the functioning of the internal market; monetary policy for the EU Member states whose currency is the euro Areas of **Shared Competence (EU and MS)(TFEU, Art 2(2))** - In this case, the **principle of subsidiarity** applies (Art 5(3) TFEU: the union shall only act for the EU MS as a **last resort**) - Examples: TFEU, Art 4: internal market; agriculture and fisheries; environment; consumer protection **[Primacy of EU LAW ]** The EU constitutes a 'new legal order of international law' (CJEU, ***Van Gend en Loos***, 1963): - EU member states have limited their sovereign rights for this legal order (to a certain extent) - In these areas, the EU can act for its Member States (in particular: make laws) **EU law is supreme over conflicting national law ('primacy of EU law'/'precedence of EU law'** - Developed by CJEU case law - Now: Declaration annexed to the treaty of Lisbon - Otherwise EU member states could simply override primary or secondary EU law **[Lecture 2:]** **[EU Law: Institutions ]** **[The separation of Powers in Democratic countries:]** - Executive government (power to put law into action) - Judiciary (power to make judgements on law) - Parliament (power to make and change the law) - Central Bank **[In the EU:]** Executive: **European Council (Council of Ministers of the Member States)** Civil Servants (and authorities): **European Commission** Parliament: **European Parliament** Judiciary: **General Court; CJEU** European Central Bank: For Eurozone **[The Executive: The Council]** **EU: Council of the European Union (TEU, Art 15, 16):** - Two configurations: - 2(1) **The European Council:** comprising of all PMs (or heads of state) of the member states + the President of the commission - 2(2) **The Council:** comprising the ministers of the member states responsible for a particular matter, e.g. agriculture and fisheries council includes the ministers responsible for agricultural policy. ECOFIN Council includes all ministers of finance **NOTE:** This is different from the **Council of Europe:** a separate international organisation with its seat in Strasbourg; major achievement: European convention on human rights A screenshot of a black screen Description automatically generated **[The European Council:]** - The political steering committee of the European Union: TEU, art 15(1) - The European council normally meets twice every six months (TEU, art 15(3)) - **Seat: Brussels (Belgium)** **[The Council (TEU Art 16): Legislative and budgetary functions (with EP) -- meets in Brussels:]** - There is not 'one' council; rather, the council meets in 10 different configurations, see TEU, art 16(6): e.g. the foreign affairs council; justice and home affairs council; agriculture and fisheries council; Ecofin (council of the ministers of finance) - Regular means of taking decisions: **qualified majority (TEU, art 16(3)) (unless the treaties provide otherwise)** - Qualified majority: at least 55% of the (27) council members, comprising at least fifteen of them and representing Member States comprising at least 65% of the population of the Union' possible: decisions are made for all the EU member states which are not supported by the governments of all the EU member states (safety net: TEU art 16(4): 4 members of the council constitute a '**blocking minority**' - The presidency of the council rotates every 6 months among the EU member states **[The European Commission ]** **[The European Commission: the guardian of the treaties ]** The European Commission -- the 'guardian of the treaties' -- administrative body with powers of enforcement in some areas (e.g. competition law and state aid) - Collegiate body - One commissioner per member states - Based in brussels - Divided into Directorates-General (DG COMP for competition law; DG ECOFIN for financial issues) The one institution **representing the interests of the EU (TEU, art 17(1)):** 'the commission shall promote the general interest of the union and take appropriate initiatives to that end'; '**union legislative acts may only be adopted** on the basis of a **commission proposal** (except where treaties provide otherwise)(TEU, art 17(2)); the commission has been called the 'engine of the EU law' Other tasks: E.g. ensuring the EU member states abide by the treaties and apply EU law (TEU, art 17(1): measures at its disposal:e.g. **TFEU, art258: the commission can bring proceedings against an EU member state before the European court of justice** in case they violate obligations arising from the treaties. The commission has been called the 'guardian of EU law': the guardian of the treaties **[The European Parliament Art 14 TEU and 223-234 TFEU:]** - **Membership** - 705 elected members (plus president of commission) - Elections every 5 years by proportional representation - Political groups reflecting political affiliation, including MEPs from across the different member states - Meets in Brussels and Strasbourg, with offices in Luxembourg **[European Parliament: Functions:]** **Legislative:** - Role has increased -- acts jointly with council (co-legislator for ordinary legislative procedure, art 289(1) otherwise consultation or consent for special legislative procedure, TFEU Art 289(2)) **Scrutiny:** - Appointments and can censure or dismiss whole commission **Consent:** - New EU member states and associate agreements - Withdrawal agreements **[The Courts:]** - Acts of the EU are appealed first to the general court (first instance) and then to the court of justice of the EU The general court and the CJEU together: - Review **the legality of acts of the EU institutions;** for example, competition cases are appealed to the general court and then further to the CJEU The CJEU: - Ensure the MS comply with their obligations under the treaties (e.g. in the case of non-implementation of Directives) - Interprets EU law at the request of national courts and tribunals -- 'preliminary rulings' **[The court of justice of the European union, TEU art 19:]** Seat: Luxembourg Members: - Court of justice: 1 judge from each EU country (Art 19(2)); the court of justice if assited by advocates general TEU art 19(2) - General court: 2 judges from each EU country Purpose: - TEU art 19: 'the CJEU shall ensure that in the interpretation and application of the treaties the law is observed **[Instruments of EU law:]** **[EU law -- the pyramid (legislative acts of the EU)]** **[The legal acts of the European Union (secondary (more primary teacher said) law):]** **TFEU, art 288:** 'to exercise the union's competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions' **Regulations:** - **Binding in their entirety on the EU member states** - **Directly applicable in all member states** - Ex: the brussels Ibis Regulation **Directives:** - **Binding on the EU member states, but only as to the [result] to be achieved** - Member states have some discretion as to how to implement the aims of the directive - Example: consumer protection directive 2011 **[EU legislative process: in most cases ]** 1. Commission (proposes legislation) 2. Council & Parliament (codecision) commission proposes legislation parliament and council must both approve If not, conciliation process with negotiating committee to try for agreement **[Week 2 Lecture:]** [What is meant by EU Law:] **Basis of EU: 2 treaties:** - The Treaty on European Union (TEU) - Treaty on the functioning of the European Union (TFEU) - What are treaties? Treaty means an international agreement concluded between states in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation - They are primary law in the EU, and contracts between the member states regarding obligations and objectives Law made by the European Union (secondary law): make law for the member states **Eu Regulations** - E.g. Brussels Ibis Regulation - Securing the recognition and enforcement of civil judgements in the EU member states - Enforcement are made law, and don't require national law to implement them **EU Directives** - E.g. distance selling directive - Directive 97/7/EC of the European parliament and of the council of 20 May 1997 on the protection of consumers in respect of distance contracts - Consumers' right of withdrawal within 7 working days for distance selling contracts (e.g. amazon) - Extended to 14 days under directive 2011/83/EU **Other sources of EU Law:** - **EU charter of fundamental rights** -binding for EU institutions and for EU member states (when they are implementing EU law)(EU Charter, Art 51) -needs to be observed by institutions when making laws EU has a legal personality - **Treaties the EU has concluded with third states** -the EU itself has a legal personality since the treaty of Amsterdam -example: the 2005 Hague Choice of Court Agreements Convention (by coming member of this binds the member states to it) [EU regulations -- Eu directives: where is the difference?] - See Art 288 TFEU - (ex Art 249 TEC) - **Art 288 TFEU provides a list of 5 different kinds of legal acts of the EU:** -to exercise the union's competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions -a regulation shall have general application. It shall be binding in its entirety and directly applicable in all member states -a directive shall be binding, as to the result to be achieved, upon each member state to which it is addressed, but shall leave to the national authorities the choice of form and methods -a decision shall be binding in its entirety, a decision which specifies those to whom it is addressed shall be binding only on them -recommendations and opinions shall have NO binding force **Which EU institutions are normally involved in the law-making of regulations and directives?** European parliament & the council -- with the proposal by the commission in the OLP Overview of the institutions of the EU, Art 13 TEU: - The European parliament - The European council - The council - The European commission - The court of justice of the European union - The European central bank - The court of auditors [Institutions involved in making secondary EU Law:] **Which EU institution is called the 'engine of EU law'?** The commission **The European Commission, Art 17 TEU:** - '**union legislative acts may only be adopted** on the basis of a **commission proposal** (except where the treaties provide otherwise TEU art 17(2)' - The commission has been called the engine of EU law - **The one institution representing the interests of the EU** art 17(1) TEU: 'the commission shall promote the general interest of the union and take appropriate initiatives to that end' - Art 17(3) TEU: 'in carrying out its responsibilities, the commission shall be completely independent from government and institutions' - Other tasks: e.g. ensuring the EU member states abide by the treaties and apply EU law (Art 17(1) TEU); Art 258 TFEU '**infringement procedure against EU member state before the CJEU in case they violate obligations arising from the treaties'**; the commission has been called the 'guardian of EU law' - **Only institution to proposals of regulations and directives** **The Council, art 16 TEU (also called Council of the European Union):** - Until 1992 council of ministers - Ministers of say agricultural fisheries of member states, meet and become the council for that in EU - Exercises **legislative** and **budgetary** functions together with the European parliament - The council is the institution in the EU **representing the EU member states** (Art 16(2) TEU) - Members: government ministers from each EU member state - **Regular means of taking decisions by council: 'qualified majority'** unless treaties provide otherwise **Art 16(3) TEU** - Qualified majority: at least 55% of the council members (in practise: 15/27) comprising at least 15 of them representing member states comprising at least 65% of the population of the union \[449.2 million\] - Possible: **decisions are made for all the EU member states which are not supported by the governments of all the EU member states** - Public international law normally requires unanimity/consensus - **Do you always have to do the maths to calculate a qualified majority?** Another rule in TEU, blocking minority, so if only 3 council members dissenting, this rule says qualified majority is deemed to be obtained - ART 16(4): 'a blocking minority must include at least four council members, failing which the qualified majority shall be deemed attained' (Blocking minority) - **Also: safety net, to protect state sovereignty** - Presidency of the **council rotates every 6 months** among the EU member states (currently Poland) **The European Parliament, TEU art 14:** Legislative function - Role has increased -- acts **jointly with council** (co-legislator for ordinary legislative procedure, art 289(1) - Otherwise: **consultation** or **consent** for **special legislative procedures**, TFEU Art 289(2) - Seat: France Strasbourg/committee work happens normally also in brussels - Consultation: e.g. competition law - Consent: see, e.g. TEU art 49 (new EU member state) **The European Council, TEU Art 15:** - The European council is the political steering committee of the European union - Art 15(1) TEU: the European council shall provide the union with the necessary impetus for its development and shall define the general political directions and priorities thereof - Council meetings -- in different EU member states, e.g., tampere, setting **policy goals** - **Seat:** Brussels **EU Ordinary legislative procedure -- Art 289/294 TFEU:** - (introduced under Maastricht Treaty as Co-decision procedure) - Commission proposes - Parliament and council must both approve - (the council votes by qualified majority) - (the European parliament votes by simple majority at the 1^st^ and 3^rd^ readings, and by majority of its members at 2^nd^ reading) - If not, conciliation process with negotiating committee to try for agreement **The Court of Justice of the European Union (CJEU), Art 19 TEU; TFEU Art 251-281:** - Purpose: Art 19 'the CJEU shall ensure that in the interpretation and application of the treaties the law is observed' - Checks and balances - **Ensuring that EU law is interpreted and applied the same in every EU member state** - **Ensuring that EU member states and EU institutions abide by EU law** - Former title: European court of justice ECJ - Sits in Luxembourg - 1 judge from each EU country (art 19(2)) = 27 judges - Usually sits in chambers of 3 or 5 judges - Can be grand chamber of 15, e.g. if memer state or eu institution requests this - Deals with requests for preliminary rulings - **Assisted by 11 advocate generals,** Art 19(2) TEU; give advice before court reaches decisions; 'opinion of the AG' (give opinion before decision is made, and they are good sources on EU law to understand how arguments are made) **General Court:** - 2 judges from each country - General court on similar lines to deal with some lesser issues - Formerly court of first instance (CFI) -- no advocate general - Actions for annulment (e.g. competition law, state aid) **CJEU judgements:** - Court produces **single agreed judgment** - Judgements in very different style from UK courts -- cany be slightly cryptic in view of brevity and translation; older cases shorter; opinion of advocate general gives fuller and more discursive account of arguments and issues - **Not bound by strict stare decisis** -- but often do refer to and follow previous decisions **Preliminary Rulings -- Art 267 TFEU:** - Art 267 (ex Art 234 TEC) "Acts of the institutions" Art 267 TFEU = **Secondary EU law** Starting point: - Eu law is part of legal system of all member states -Secondary eu law is applied by/in the eu member states: directives, regulations -National court must interpret local provision so as to give effect to EU law - But: -need to **avoid different interpretation** of EU law by the national courts of different member states -Need **to avoid confusion over the validity** of EU law (e.g. if a court in a member state A holds a regulation to be invalid but a court in Member state B decides that it is valid) - Aim? **Uniformity** on both points [Preliminary Rulings -- TFEU art 267: Issues:] - Which bodies in an EU member state may refer? - What to refer? - When to refer? - The effect of the CJEUs ruling? - **Must** be **actual dispute:** -Wightman v Secretary of State for Exiting the European Union (C-621/18) 'it should also be borne in mind that, in accordance with settled case-law the **justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions** to be delivered but rather that it is necessary for the effective resolution of a dispute' **Which bodies may refer:** - Art 267 TFEU: '**any court or tribunal or a member state**" - When is a court a court? Wide range of bodies which take decisions with some legal element; categorisation by national law is not conclusive - Factors to be considered: **Dorsch Consult 1997** **-**question of the status of body reviewing award of public contract whether body is **established in national law and is permanent** whether its **jurisdiction is compulsory** whether it **applies rules of law** whether it is **independent** **What to refer? TFEU art 267** - Questions concerning: -The interpretation of EU law -The validity and interpretation of acts of EU institutions - Scope: legal questions, **not decisions on actual case** - **For national court, not parties, to decide the questions that is to be referred**: (slob v productschap zuivel 2004) - **For national court, not CJEU, to decide whether reference necessary** (Costa v E.N.E.L 1964) **When to refer -- duty to make a reference for national court?:** **Lower court:** - Court 'may' refer 'if it considers it necessary to enable it to give judgment' (art 267, para 2); parties cannot insist on reference - National court cannot hold an EU act invalid, so it will have to make reference if legality of EU measure is central to the case (foto-Frost v Hauptzollamt Lubeck-ost 1987) **Final courts:** - Where any such question is raised in a case pending before a court of tribunal of a member state against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the court (art 267 para 3; emphasis added) [Can states avoid duty to refer?:] - CJEU has already given ruling on same point (Da Costa 1963) - Acte clair-doctrine: Meaning of EU law is obvious, i.e. there is no question of interpretation: CILFIT case - Problem: Interpretation of EU law involves different considerations [Interpretation of EU law:] EU: 24 official languages - Art 55 TEU (ex Art 53 TEU) 'text in each of these languages being equally authentic' Autonomous interpretation of EU law (primary and secondary EU law) [Effects of a ruling:] - Ruling does not decide the actual case - Just decides the meaning of relevant EU law - For national court then to apply that to the particular facts (e.g. scotch whisky association v lord advocate 2016 on minimum pricing of alcohol) [Impact: example:] - Sometimes; extensive interpretation of the treaties or other EU law - Going beyond what the member state originally intended when they agreed on the provisions of the treaties, eg. **Van Gend en Loos Case** (1963)(preliminary ruling): articl 12 EEC (now art 30 TFEU): 'member states shall refrain from introducing between themselves any new customs duties on imports or exports or any charges having equivalent effect) - Wording Art 12 EEC treaty: applies only to the member state - Decisions CJEU: Art 12 EEC treaty also confers rights upon individuals: individuals can rely on the provision before national courts = '**direct effect'** **[Lecture 2 Week 2:]** **[Recap last week: preliminary rulings -- TFEU art 267]** Starting point: EU law is part of legal system of all member states - Secondary EU law is applied by/in the EU member states - National court must interpret local provision so as to give effect to EU law But: - Need to **avoid different interpretation of EU law** by the national courts of different member states - Need to avoid confusion over the **validity of EU law** -e.g. if a court in Member state A holds an EU regulation to be invalid but a court in Member state B decides that it is valid **[Proceedings before the CJEU -- overview: what is the purpose of the CJEU?]** The most common types of case are: - **Interpreting the law** (preliminary rulings)(art 267 TFEU) - **Enforcing the law** (infringement proceedings)(TFEU art 258-260) - **Annulling EU legal acts** (actions for annulment)(art 263-266 TFEU) - **Sanctioning EU institutions** (actions for damages)(Art 268 & 340 TFEU) **[Judicial review -- art 263-366 TFEU (also called 'action for annulment')(review acts of EU)]** - Judicial review to **verify the legality of EU acts, art 263 TFEU** - Ensures that EU institutions keep within the limits of their legal powers (checks and balances) - The act concerned can be **declared void** (art 264 TFEU) What can be reviewed: - **Legislative acts** of the EU institutions 'if they are **intended to produce legal effects vis-à-vis third parties'** Art 263 TFEU (ensuring efficiency of the court) - **NOT** recommendations etc - **Example:** regulations, directives, decisions (as a rule) TFEU Art 288 - **NOT covered:** **EU treaties** - **ONLY** CJEU can review legality of EU measures (Foto-Frost v Hauptzollamt Lubeck-Ost 1987) **[Judicial Review -- Art 263-266 TFEU Grounds for review ]** Why can an act be challenged? Any reason, but it must be sufficiently serious, the grounds below -exclusive competence (say customs duties, member states cannot do this, the MS have given the power to the EU) -shared competence (movement of good, EU and MS can act together) **Grounds enabling review listed in Article 263: overview** - Lack of competence (Art 5, TEU) - Infringement of an essential procedural requirement: Maizena GmbH v Council 1980; regulation annulled because of **failure to consult parliament** - Misuse of powers: Giuffrida v Council (1976); competition for post within EU institution designed to appoint person already doing the job, misuse of power in order to remedy anomaly in grading of staff - Infringement of the treaties (constitution of the EU) or of any rule of law relating to their application Why can an act be challenged?: - 'infringement of the treaties or of any rule of law relating to their application' - Overlap with 'lack of competence' under treaties (Art 5, TEU) - Includes general principles of law (not found in treaties but developed by CJEU): -proportionality (every act needs to only go as far to achieve its objective)(if breach can be challenged) -subsidiarity (a shared competence between EU and MS, movement of goods, union should only act when is necessary when MS could not achieve objective) -legal certainty (the act, should be clear and certain -legitimate expectations -non-discrimination -fundamental human rights **[Judicial review -- TFEU, art 263-266]** When -- time limit observed?: 'the proceedings provided for in this article shall be **instituted within two months of publication of the measure, or if its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be.** Who may seek review of a reviewable act?: - Privileged applicants, semi-privileged, and non-privileged - Certain parties always have standing: -Privileged applicants: member states, european parliament, council, commission - \[semi privileged applicants\]: the court of auditors, european central bank and the committee of the regions 'for the purpose of protecting their prerogatives \[under the treaties\]' **Natural and legal persons:** limited locus standi (non-privileged) - The natural or legal person must be: - The [direct addressee] of the act, or - The act of "direct and individual concern' to applicant: defined by case law -must be **closed class**, not open-ended -Plaumann & co v commission (case 25/62)\[1963\] **[Judicial review -- Who may seek review of reviewable act -- Non-privileged]** Plaumann Formula - 'persons other than those to whom a decision is addressed **may only claim to be individually concerned if that decision [affects them by reason of certain attributes which are peculiar to them ]**or **[by reason of circumstances in which they are differentiated from all other persons]** and **by virtue of these factors [distinguishes them individually ]**just as in the case of the person addressed' -applicant must have been singled out by the act in question -example: 'group of importers of clementines' too broad - Limited opportunities for NGOs etc -Union de pequenos agricultores v council \[2002\] - \[alternative route: using national courts, TFEU art 267: preliminary ruling procedure; but: its conditions must be fulfilled\] Indirect review of validity of EU acts: - **Preliminary ruling procedure, Art 263 TFEU** - Challenging domestic rule by arguing it is based on invalid EU rule (in case of national law implementing EU directives) - Challenging the legality of a provision of an EU regulation (remember: national court cannot determine validity of EU law) **Infringement (infraction) Proceedings -- TFEU arts 258-260:** - Claim that member state is not properly abiding its obligations under the treaties (TFEU, TEU) - Examples: EU member state domestic rules that breach treaty provisions or other rules of EU law; e.g. art 30, TFEU, 'customs duties on imports and exports...are prohibited between member states' -- if Italy taxes the import of French import camembert with 30 cents/kg, this is breach of EU which can be challenged - Or EU member state has not implemented directive by due date - Infringement proceedings are started by Commission (but both the commission and EU member states may initiate proceedings) - Why?: Art 17, TEU - Commission can learn of problems in different ways, e.g.: -requirements on states to report what they have done -complaint from other member state -commission's own checking of legislation -complaints from public -commission does not have 'inspectors' and very limited capacity to investigate - Reports published by commission on compliance of EU member states with EU law **[Stages to infringement procedure -- overview -- art 259-260 TFEU]** Administrative stage: - Written notice -- akin to formal warning - Opportunity for member state to respond (right to be heard) Commission issues reasoned opinion: - Defines issue and sets date for member state at which matter to be assessed - Opportunity for member state concerned to redress the breach; if not Proceedings before court: - Very high success rate for commission - May be very brief judgment if state accepts it has not acted properly If still not complying, second references to court -- art 260(2): - Potential for financial penalties **[Infringement (infraction proceedings) -- discretion of commission -- art 258-260 TFEU]** - Commission has discretion at all stages of procedure not to go further (as a rule, but see art 259(3) TFEU -- MS brings action against another MS) - Star fruit company SA v Commission \[1989\] - Most cases do no reach court -but threat of action very powerful -informal EU pilot scheme to notify state of complaint and seek response - During 2018 (annual report on monitoring the application of union law 2018) -644 written notices -157 reasoned opinions -27 judgments by court -5 judgments on sanctions for not implementing earlier judgments **[Infringement (infraction) proceedings -- TFEU art 258-260]** - Not only the commission may bring infringement procedures: art 259 TFEU - A member state which considers that another member state has failed to fulfil an obligation under the treaties may bring the matter before the court of justice - Before a member state brings an action against another member state for an alleged infringement of an obligation under the treaties, it shall bring the matter before the commission - The commission shall deliver a reasoned opinion after each of the states concerned has been given the opportunity to submit its own case and its observations on the other party's case both orally and in writing - If the commission has not delivered an opinion within three months of the date on which the matter was brought before it, the absence of such opinion shall not prevent the matter from being brought before the court **[Infringement (infraction) proceedings -- TFEU arts 258-260 -Ensuring compliance ]** - Effects of the judgment: art 260 TFEU - 'if the court of justice of the EU finds that a member state has failed to fulfil an obligation under the treaties, the state shall be required to take the necessary measures to comply with the judgment of the court' - Specific obligation on state to comply with court's ruling in infringement proceedings - Measures which the state could take: -e.g. implementing an EU directive -challenge national legal provisions which are incompatible with EU law - General obligation to ensure fulfilment of the obligations arising out of the treaties -- TEU art 4(3) (member states violating, should address issue) "Pursuant to the principle of sincere cooperation, the Union and the Member\ States shall, in full mutual respect, assist each other in carrying out tasks which\ flow from the Treaties.\ The Member States shall take any appropriate measure, general or particular,\ to ensure fulfilment of the obligations arising out of the Treaties or resulting\ from the acts of the institutions of the Union.\ The Member States shall facilitate the achievement of the Union\'s tasks and\ refrain from any measure which could jeopardise the attainment of the Union\'s\ objectives." Further option for the commission: - Power for commission to refer back to court and seek penalties -art 260(2) TFEU -lump sum or periodic payments can be required from the member state in breach of EU law -commission recommends penalty, e.g. if EU directive has not been transposed into national law (TFEU art 260(3)) Enforcing the transposition of EU directives into the national law of the member states, Art 260(3) TFEU: 3. When the [Commission] brings a case before the Court pursuant to Article 258 on the\ grounds that the Member State concerned has failed to fulfil its obligation to notify\ measures [transposing a directive] adopted under a legislative procedure, it may, when it deems appropriate, [specify the amount of the lump sum] or [penalty payment] to be paid by the Member State concerned which it considers appropriate in the\ circumstances. - Court cannot go beyond that (but may impose less) - Continuing fine and/or potential for lump sum as well **[Re Infringement (infraction) proceedings -- TFEU art 258-260 -- penalty for late transposition, art 260(3):]** Commission v Romania -- 3,000,0000euro 'the purpose of article 260(3) TFEU is not to give a stronger incentive to member states to transpose directives within the deadlines laid down by the EU legislature and to ensure that EU legislation is applied' **-direct effect, if rights to individuals from directives, and directives can still have direct effect (look at this)** **[Re Infringement (infraction) proceedings -- TFEU art 258-260 -- sanctions general:]** Commission v Greece \[2000\]: penalty payment of 20,000 euro/day Criteria for size of penalty: -duration of the infringement -its seriousness -the ability of the member state to pay Commission v spain \[2003\]: -failure to comply with 1998 decision that in breach of bathing waters directive -annual penalty of 624,150euro, for each 1% of waters that are not in compliance Commission v France \[2005\]: -failure to comply with 1991 judgement that significant breach of EU fisheries conservation measures -lump sum penalty of 20m euro, long duration of breach and importance of issue -penalty payment of 57,761,250euro every 6 months still in breach **[Re Infringement (infraction) proceedings -- TFEU art 258-260 -- defences raised by states]** Unsuccessful: - Compliance achieved in practice, administrative measures, not laws - Commission v Netherlands \[1982\] - Result of directive achieved by direct effect (the direct effect was developed by CJEU and MS cannot say that it has direct effect anyway) - Commission v Germany - Other states also in breach (fishing limits) - Commission v uk 1991 - Member state has remedied breach -- after date of reasoned opinion - Commission v Italy \[1961\] Potentially successful: - E[u decision being enforced is unlawful] - Commission v Greece \[1988\] - [Commission has given member state too short a time to comply with reasoned opinion ] - Commission v Belgium \[1988\] **[Additional protection for individuals:]** Can individuals sue the EU? - Individuals can claim damages against EU institutions for damage arising from illegal legislative acts - Art 268&340 TFEU: contractual (domestic courts) and non-contractual liability (a tort, CJEU) - Act (or omission) must be official act of union **[State liability -- liability of EU member states to private individuals ]** - **Claim against eu member states** (harmed by the MS doesn't abide by the eu law) - Those directly harmed by a state's failure to comply with EU law may recover damages -**Francovich and bonifaci v Italy 1991** -brasserie du pecheur sa v Germany 1996 -Factorame case Conditions: R v Secretary of State for Transport, ex parte Factorame Ltd - Para 51 'the rule of l[aw infringed must be intended to confer rights] on individuals' - The [breach must be sufficiently serious]; and there must be a [direct causal link] between the [breach of the obligation] resting on the state and the [damage sustained] by the injured parties - Para 55 ' has the body manifestly and gravely disregarded the [limits on its discretion'] **[Other options of the EU to ensure compliance with treaties: preventative procedure of Art 7 TEU (not examinable):]** - TEU art 2: values of European union: the union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law, and respect for human rights, including the rights of persons belonging to minorities. These values are common to the member states in a society in which pluralishm, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail -Art 7 TEU: the EU member states (at least 9 MS), the European parliament, the European commission can make a proposal to the council if they are concerned that one EU member state has breached article 2 - Also applies beyond areas of EU competence (i.e. in areas in which EU member states have sole legislative competence) - Different stages of preventative procedure - Stage 3: if existence of 'serious persistent breach' of art 2 TEU has been determined, the council (acting by qualified majority) may 'suspend certain of the rights' deriving from the TFEU and the TEU of the member state in questions - E.g. suspension of voting rights of the member state in council TEU art 7(3) - Preventative procedure activated for the first time in 2017 by the European commission against Poland, and in 2018 by the European parliament against hungary **[Week 3 Lecture: EU Law General Principles]** **What are general principles of EU law:** Eu Law sources include written sources: - Primary law (the foundation treaties) - Secondary Law (regulations, directives under 288 TFEU) They also include sources that are unwritten: - General principles - Not a finite list, but used by court of justice to assess legality and appropriateness of: -union actions; and -member states implementation, transposition of EU law and, what they do when derogating from it -these have constitutional status (Audiolux case c-101/08) -constitute a set of rules that sit about the EU legal order and provide for administrative justice and good governance **Functions and sources:** Used by court of justice to assess legality and appropriateness of: - Unions actions - Member states implementation, transposition of EU law, and what they do when derogating from it 3 Main functions: 1. Guide interpretation of treaty provisions and legislative enactments 2. Benchmark against which EU law is judged; and 3. Measure against which national implementation of EU law can be assessed **Primary/Supremacy of EU law:** - Foundational treaties of EU fail to clarify relationships between EU and national legislation - Costa v ENEL case 6/64 clarified the situation: 'by transferring from their domestic system to the EU one, MS were effectively submitting to a permanent limitation of their sovereign rights' - EU law would therefore always take precedence over incompatible national systems - Remember that states take different approaches to incorporation of international law into their national systems ( monist/dualist) - Achievement of EU objectives (under art 4(3) TEU) would be fatally undermined if member state could legislate against them: -under this, member state obligated to take appropriate measures to ensure fulfilment of treaty obligations -facilitate achievement of union's tasks and refrain from measures that could jeopardise this - Simmenthal case (106/77) confirmed that EU law would prevail in national courts against all incompatible member state law, regardless of timing (and in, internationale handelsgesellschaft case, status) - Incompatible national legislation should be disapplied/over-ridden does not automatically disappear - Any other approach would undermine effectiveness of EU law **Direct Effect (1):** Sources of secondary law (art 288 TFEU): - Regulations: have general application; binding in their entirety and directly applicable in all member states -directly applicable -normal dualist states require international law to be incorporated into national law by legislature -regulations do not require national incorporation -- binding as soon as adopted - Directives: binding as to the result to be achieved, upon each member state to which it is addressed, but shall leave to the national authorities the choice of form and methods -deadline for transposition set out in directives -binding only after transposition deadline - Decisions: binding in their entirety - Recommendations and opinions: of no legal force, soft law -though note that this category includes **commission communications**, which may: detail **proposed legislation** and provide information on **commission interpretation of legislation.** - Direct effect and directly applicable are synonymous -refers to those provision of EU law that individuals can enforce directly in their national courts -applies to regulations automatically but has been extended to include treaty articles and directives (post-implementation deadline) as well 3 Criteria: 1. **Provision must be sufficiently clear and precise** 2. **Provisions must be unconditional** 3. **Provisions must not entail member states exercising their discretion in implementing them** both vertical and horizontal application possible, depending on circumstances. **Subsidiarity -- competence:** Distinguish between areas where: - EU has exclusive competence (customs union, competition rules for internal market, EURO monetary policy, common fisheries policy (under art 3 TFEU Lisbon treaty); and - Those where competence is [shared] - links to sovereignty - TFEU art 2(2): 'the member states shall exercise their competence to the extent that the union has not exercised its competence. The member states shall again exercise their competence to the extent that the union has decided to cease exercising its competence) - TFEU art 4(2) -- sets out areas of shared competence in detail (i.e. the internal market, agriculture, environment, transport etc) so problematic areas should be minimised. **Subsidiarity:** - Addresses question of when EU can exercise legal power in areas of shared competence -- art 5(3) TEU - 'under the principles of subsidiarity, in areas which do not fall within its exclusive competence, the union shall act **only if and in so far** as the objectives of the proposed action cannot be **sufficiently** achieved by the member state, either at central level or at regional local level, but can rather, by reason of the scale or effects of the proposed actions, be **better** achieved at union level' For EU to be able to legislate in areas where competence is shared, it must be able to demonstrate both of the following: - **National insufficiency** (i.e. re. sufficiently achieved above); and - **Comparative efficiency** -- better at EU scale in terms of achieving objective than member state level - **\[codified in Protocol 2 on subsidiarity and proportionality to the Lisbon Treaty\]** **Proportionality:** Addresses: - How EU can act when exercising legislative powers; and - How member states can act when adopting measures falling within EU law - TEU art 5(4): 'under the principle of proportionality, the content and form of union action shall not exceed what is **necessary** to achieve the objectives of the treaties' Necessary: - Fedesa Case (case c-331/88) re livestock hormones -- 3 concepts expressed re. EU legislation: -Action must be suitable to achieve objective -Action must be least invasive intervention -(must not be disproportionate to aims pursued) - Court interpreted art 5(4) to mean legislation must now be 'manifestly inappropriate' -- [courts reluctant to strike down EU legislation because it is disproportionate ] - See also Vodafone case for a fuller assessment: it goes beyond Fedesa and appears to suggest that proportionality of law should also take account of the importance of the aims pursued - As rule of administrative justice, invoked in Internationale Handelsgesellschaft: The principle of proportionality is also invoked as a general principle of EU law to ensure that administrative and legislative actions respect fundamental rights and are not overly intrusive. **Legal certainty:** Three elements linked to this concept: 1. Legitimate expectation 2. Non-retroactivity 3. Res Judicata **Legal certainty -- Legitimate expectation:** - 'in the absence of an overriding matter of public interest, Union measures must not violate the legitimate expectations of the parties concerned' - 'a legitimate expectation is one which must be held by a reasonable person as to matters likely to occur in the normal course of affairs' - The principle requires encouragement of reasonable expectation, a reliance on that expectation, and some loss resulting from that breach. **Legal certainty -- non-retroactivity and res judicata:** Non-retroactivity: - Applied to secondary legislation -- measure can't take effect before it is published - Retroactivity may be allowed in very exceptional circumstances -- e.g. if they put person in a better position (see Road Air BV case) - Von Colson principle -- national courts have obligation to interpret domestic legislation to comply with EU law when it is not **directly effective** -Kolpinghuis Nijmegen -- obligation to interpret this way limited by general principles -- [especially legal certainty and non-retroactivity] -Kolpinghuis extends this even if EU law is directly effective (and when criminal proceedings are at issue) **Equality/non-discrimination:** - Persons in similar situations should be treated the same, unless there is an objectively justifiable reason - While discrimination is broadly prohibited in existing: -**primary** (e.g. art 18 and 19 TFEU on nationality, race, religion, sexual orientation and disability); and -**secondary** EU law (e.g. directive 2000/78 on employment law) -non-discrimination also determined to be a general principle (Dansk Industrie case) **State liability:** - Idea that individual can seek remedy from member state for losses suffered as a result of a member states failure to implement or correctly apply EU law - Note that it doesn't have to be individuals own member state -- see R v Ministry of Agriculture Fisheries and Food, ex.p Hedley Lomas (Ireland) - 'the preferred approach seems to see state liability as the approach of last resort, compared with direct effect' Francovich case: - Ex-employees claiming unpaid wages said provisions of directive 80/297 were directly effective, and that Italy had failed to implement the directive (as required under art 288 TFEU and art 4 Teu) -- latter point had already been decided by court in a different case. - Even though provisions were found not to be directly effective, claimants succeeded on base of second argument, but only because certain criteria had been fulfilled. **State liability -- Francovich:** Those criteria were as follows: 1. Directive involved rights conferred on individuals 2. Content of such rights could be identified on basis of the directives provisions (Brasserie de Pecheur case added to this that the breach must be sufficiently serious) - Para 56 of Brasserie de pecheur judgment sets out factors to be taken into account when applying decisive test to determine if breach has been sufficiently serious (and whether or not institution has 'manifestly and gravely exceeded the limits of its discretion' 3. Causal link existed between failure of state and damage suffered by affected persons (and damage must have been caused -- Schmidberger v Austria) **State liability -- post-francovich:** Idea of state liability further expanded by Factortame (Spanish fishing boat against UK) and Brasserie de Pecheur (german beer purity laws challenged by French brewery) cases: - State liability is not just limited to failure to implement directives, but brasserie case extended it to include 'all domestic acts and omissions, legislative, executive and judicial, in breach of union law' - Also all organs of state are bound (commission v Belgium case 77/69) -- principle of supremacy of EU law binds them - Vereinigung Nordrhein (Case c-424/97) to include legal independent bodies \[how limited?\] and AGM-COS MET Srl v Suomen Valtio and Tarmo Lehtinen (Case c-470/03) extended this still further to potentially include liability for individual officials. - General difficulties with interpretation by court of justice -- it has been inconsistent, and finding individual officials liable is potentially dangerous. **What is State Liability?** - **Definition**: State liability is the principle that individuals can claim compensation from a member state if they suffer a loss due to the state's failure to implement or properly apply EU law. - **Scope**: It can apply to *any* member state, not just an individual\'s own state. - Example: In *R v Ministry of Agriculture, ex parte Hedley Lomas*, the UK was held liable for restricting exports to Ireland, even though the affected individuals were not Irish. **How State Liability Fits with Direct Effect:** - **Direct Effect**: Allows individuals to directly invoke EU law in national courts if the law is sufficiently clear, precise, and unconditional. - **State Liability**: A \"last resort\" when direct effect is unavailable, such as when the EU law in question is **not directly effective** (e.g., certain directives). **Francovich Case (Foundation of State Liability):** - **Facts**: - Ex-employees in Italy claimed unpaid wages and argued that Directive 80/297 (requiring a wage guarantee fund) had not been implemented by Italy. - They initially argued the directive was directly effective, but it was found not to meet the criteria for direct effect. - They succeeded on a different basis: Italy's failure to implement the directive properly under EU obligations. - **Outcome**: The Court established state liability but only when **three criteria** are fulfilled. **Francovich Criteria for State Liability:** 1. **Directive must confer rights on individuals**: - The law in question must clearly grant specific rights to individuals. - Example: The directive required Italy to protect workers\' wages, conferring a right to employees. 2. **Content of those rights must be identifiable**: - The rights conferred by the directive must be specific enough to identify what the individual is entitled to. - Example: The directive clearly required the establishment of a wage guarantee fund. 3. **Causal link between the state's failure and the individual's loss**: - The failure to implement or comply with EU law must directly cause the damage. - Example: Italy's failure to create the fund caused the employees' unpaid wages. **Post-Francovich Developments:** **Brasserie du Pêcheur and Factortame Cases:** - These cases expanded state liability to cover **all breaches of EU law**, not just failures to implement directives. - *Brasserie du Pêcheur*: A French brewery challenged German beer purity laws for breaching EU free trade principles. - *Factortame*: Spanish fishing companies claimed damages for the UK's discriminatory laws that violated EU fisheries rules. **Key Additions:** 1. **Sufficiently Serious Breach**: - From *Brasserie du Pêcheur*, state liability requires that the breach must be **\"sufficiently serious.\"** - A breach is serious if the state has \"manifestly and gravely exceeded the limits of its discretion.\" - Courts assess factors like: - Clarity of the breached rule. - Whether the breach was intentional. - Whether there was discretion in applying the rule. 2. **All State Organs Are Bound**: - *Commission v Belgium*: Liability applies to **all organs of the state**---legislative, executive, and judicial branches. 3. **Independent Bodies and Officials**: - *Vereinigung Nordrhein* (C-424/97): Liability extends to **independent legal bodies** (e.g., regulatory authorities). - *AGM-COS MET Srl v Finland* (C-470/03): Even **individual officials** can be liable in some cases, though this raises concerns about legal certainty. **Challenges with State Liability:** 1. **Inconsistent Application**: Courts sometimes interpret what constitutes a \"sufficiently serious\" breach differently, leading to uncertainty. 2. **Risk with Individual Officials**: Extending liability to individuals can create issues of fairness and discourage public officials from performing their duties. **In Summary:** - **State Liability** ensures member states uphold their EU obligations, giving individuals a remedy when states fail. - Established in *Francovich*, expanded in *Brasserie du Pêcheur* and *Factortame*, it applies to all breaches of EU law, provided the criteria (rights, clarity, and causation) are met, with the additional requirement that the breach be sufficiently serious. - It reflects the **principle of supremacy of EU law**, ensuring states and their bodies are held accountable. **[Lecture Week 4 Movemont of goods]** **[The single market: starting point ]** TEU Art 3(3) first sentence: 'the union shall establish an internal market' What is an internal market?: - It involves the **four freedoms**, see Art 26(2) TFEU - 1\. The union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the treaties - 2\. The internal market shall comprise an area without internal frontiers in which the free movement of; goods; persons; services; and capital; is ensured in accordance with the provisions of the treaties **[Fundamental freedoms -- essential for the single market (now common market)]** - Free movement of goods: Art 34 & 35 TFEU - Free movement of workers: art 45 TFEU - Free movement of services: Art 56 TFEU - Free movement of capital: Art 63 TFEU - Right of establishment: Art 49 TFEU - The freedoms **allow exceptions/derogations to balance free market with public interests** (i.e. sometimes, limitations of these freedoms are allowed) **[Why is a free market important (supranational organisations often have the goal to ease trade amongst memberst, remember ASEAN)]** - Trade is a key driver of growth and prosperity. It stimulates greater business efficiency and higher productivity, hsaring knowledge and innovation across the globe. Trade boosts jobs, helps to raise living standards and provides a foundation for stronger and more prosperous communities. It ensures more people can access a wider choice of goods at lower cost, making household incomes go further, especially for the poorest in society. Businesses also benefit from cheaper and better inputs, and trade is vital to the Uks prosperity -- exports and imports were each equivalent to about 30% of GDP in 2016. **[Why is a free market important]** - Some arguments for leaving EU based on anti-globalisation and issues of capitalist structures and free trade - Market approach recognises need for intervention to ensure market operates fairly (see EU competition law) - The EU is founded on the ideal of a free market - The single market is a fundamental goal of EU integration (see TEU, art 3)(it drives all that EU does) **[National markets]** - Extend to whole country -all subject to same rules (e.g. safety standards) -level playing field - Production can be based where most efficient -local raw materials -availability of workforce -transport costs - Larger scale encourages greater innovation and efficiency **[National and international markets]** - Since outsiders can enter the market and sell goods, this forces local produces to improve product and seek efficiency - Local producers can expand market by selling overseas - Customers get widest choice at cheapest price - Inefficient producers have to changer or go out of business -good for customer -bad for those who cannot change easily **[Background: free but fair market ]** - Significant problems can arise if no control of the market - Can be abused in many ways to favour individual companies and harm consumer - Hence controls, established at EU level, to achieve a level playing field - Controls to ensure fair competition: -EU competition law (art 101-106 TFEU) -Prohibition of State Aid (Art 107-108 TFEU) **[What is protectionism]** - Wider trade can be a major threat to local producers if others are more attractive to customers (whole local industry put out of business; serious knock-on effects i.e. reduced tax income, higher rates of unemployment) - Try to protect local economy by preventing outsiders entering the market or by handicapping them (complete ban of imports; quotas limiting numbers of imports; tariffs = customs duties, i.e. taxes to be paid before can enter country, making foreign goods more expensive and therefore less attractive; other restrictions which make it hard for foreigners, burdensome paperwork or inspections, unusual specifications, safety standards etc) - Protectionism helps local industry in short term, but economics is a dynamic game, customers pays higher prices **[The EU: four steps towards economic integration ]** Building the single market: different elements -- **Free Trade Area:** - Basic arrgangement is just a free trade area (FTA) - No internal tariffs and no quotas between the member of an FTA, but each country can set its own tariffs with other countries ('third states') - PLEASE NOTE: the EU is NOT a free trade area! Building the single market: different elements -- **Customs union:** - A requirement for a single market, but a long way short of this by itself - Members argee: 1. To abolish customs tariffs between themselves 2. To establish a 'common customs tariffs' with the outside world (third countries) - Eliminates one of the biggest, direct obstacles to trade - But: member states set their own rules on all sorts of other things, i.e. product standards Building the single market: single market/international market step 3 -- harmonised rules: - Overall idea: to mimic the market of a single country - Four freedoms: goods, services, people, capital - Need to have shared rules on these to allow free flow across the single market (no national rules acting as direct or indirect obstacles) - Go further and have harmonisation and mutual recognition (creates a level playing field where required to achieve the four freedoms) Step 4: economic and monetary union: - Art 3(4) TFEU: 'the union shall establish an economic and monetary union whose currency is the Euro' - Unified monetary and fiscal policies - Currently: 20 EU member states which use the Euro (eurozone) **[Free movement of goods: customs union and tariffs]** Customs union in the EU: starting point: - TFEU, Part three -- union policies and the internal actions: Title II Free Movement of goods art 28 (ex Art 23 TEC) - 1\. The union shall comprise a customs union which shall cover all trade in goods ad which shall involve the prohibition between member states of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries **TFEU art 30:** 'customs duties on imports and exports and charges having equivalent effect shall be prohibited between member states. This prohibition shall also apply to customs duties of a fiscal nature' **Prohibited:** - Customs duties (or tariffs) -financial charge made on import (or export) of a product -all countries must publish and report to the world trade organisation (WTO) - **'**and of all charges having equivalent effect \[to a customs duty\]' - =equivalent charge imposed when good crosses border (e.g. charge leveled for a safety check of the goods before they are allowed to cross the border) **[Customs union: charges having equivalent effect]** - Art 30 prohibits customs duties and charges having equivalent effect (e.g. fee for import licence or health certificate) - Commission v Italy (statistical levy) (case 24/68) \[1969: -small charge on certain agricultural exports, supposedly to cover cost of gathering statistical info -'consequently, **any pecuniary charge,** however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods **[by reason of the fact that they cross a frontier]**, and which is not a customs duty in the strict sense, constitutes a **charge having equivalent effect**...[even if it is not imposed for the benefit of the state'] - **Size of charge and what the charge is called are both immaterial** -Rewe-Zentralfinanz GmbH v Direktor der Landwirtschaftskammer Westfalen Lippe (case 39-73)\[1973\]: charge for phyto-sanitary examination, but on wholly different basis from domestic charges - **use of money raised immaterial** -Social Fonds voor de Diamantarbeiders v SA Ch Brachfeld & Sons (cases 2 and 3-69)\[1969\]: levy on imported diamonds for social fund for diamond workers - Charge must be **based on the fact that frontier crossed,** not on transport (which may involve crossing frontier) -Air liquid Industries Belgium SA v Ville de Seraing (c-393/04)\[2006\]: tax on motors pumping gas **[Customs union: charges having equivalent effect: permissible charges]** Commission v Italy (statistical levy) \[1969\]: 'it is not impossible that in certain circumstances **a specific service actually rendered** may form the **consideration** for a possible proportional payment for the service in question' **[Customs union: charges having equivalent effect: Permissible charges -- YES]** Commission v Germany (case 18/87)\[1988\] (veterinary inspection required by European (not national) law): - Service charges are permissible if a. **they do not exceed the actual costs of the inspections** in connection with which they are charged b. the **inspections in question are obligatory and uniform** for all the products concerned in the community c. they are **prescribed by community law** in the general interest of the community d. they **promote the free movement of goods,** in particular by neutralising obstacles which could arise from unilateral measures of inspection adopted in accordance...with the treaty **[Customs union: charges having equivalent effect: permissible charged (3) -- NO:]** Commission v Italy (case 340/87)\[1989\]: charge for opening customs posts during business hours **Conceria Daniele Bresciani** v Amministrazione Italiana dell Finanze (case 87-75)\[1976\]: charge for inspecting raw cowhide -- pro rata, but domestic hides under different scheme **[Summary: Customs union:]** - 'common customs tariff duties shall be fixed [by the council] on a [proposal from the commission'] (TFEU art 31) - All tariffs set by the EU - Same charge regardless of where goods enter EU; once inside EU and tariff paid, no further charge - Outside EU complex web of tariffs; basic world trade organisation rule that one state must treat all states equally; exceptions for members of free trade areas and customs union (WTO rules) - No customs duties between member states - No charges having equivalent effect to customs duties - Member states give up their ability to determine tariffs to non-EU states (third states), instead the EU determines the tariff (common customs tariff) - Once good from non-EU member state are within the customs union and have paid the EU tariff, they have a right of free circulation **[Lecture 2 Week 4 The free movement of goods ]** Free movement of goods: art 34 & 35 TFEU **[The four freedoms: problems of definition ('scope' of the relevant provisions)]** - Business often done in ways that complicate categorisation - It may be difficult to determine which set of the four freedoms apply -e.g. is selling a boiler covered by 'goods' or 'services' (if installation or servicing is aprt of the contract?) -what about intangible items -similarly, potentially fuzzy distinction between taking employment (free movement of workers) and establishing business (freedom fo establishment) - However, broadly similar rules apply across all these areas to remove obstacles to commercial freedom **[TFEU Title II Free Movement of Goods ]** - Art 30: customs duties on imports and exports and charges having equivalent effect shall be prohibited between member states. This prohibition shall also apply to customs duties of a fiscal nature - Art 34: quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between member states - Art 35: quantitative restrictions on **exports** and all measures having equivalent effect shall be prohibited between member states - Art 36: art 34 and 35 [shall not preclude prohibitions or restrictions] on imports, exports or goods in transit [justified] on grounds of public morality, public policy or public security; the protection of health and life of humans, plants or animals; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. [Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or disguised restriction on trade between member states.] **[Structured approach to problem question under art 34 -- broad overview:]** 1. Is the scope of article 34 TFEU affected by the national measure -definition of 'good' -cross boarder situation? -conclude that the measure affects the scope of article 34 2\. Does the restricting measure constitute a state act? -either a concrete measure, or an omission to control private parties (Spanish strawberries) 3.Is the measure a qualitative restriction or a measures having restrictive effect? -define MEQR in line with Dassonville (but remember Keck) 4.Is there an EU rule on the matter that must take priority? 5.Can the measure be justified? a\) Article 36: limited on grounds and not if arbritrary discrimination b\) Cassis de Dijon: expect mutual recognition but allow mandatory requirements c\) proportionality test: -a) in accordance with the law -b) legitimate aim -c)necessary (any less burdensome measure) -d)proportional in a narrower sense (weighing up of interests) **1. Is the scope of Article 34 affected by the national measure?** - **Definition of \'good\':**\ Check whether the product being restricted is a **physical, tangible item** that can be moved across borders (since Article 34 deals with the free movement of goods). - **Cross-border situation:**\ Confirm whether the measure affects **trade between EU Member States.** If it's a purely internal issue (within just one country), Article 34 doesn\'t apply. - **Conclusion:**\ If the measure affects goods moving between Member States, **conclude that it falls within the scope of Article 34.** **2. Does the restricting measure constitute a state act?** - A state act could be a law, regulation, decision, or any measure imposed by public authorities. - Importantly, even **inaction** can count as a state act. - **Example:** In the *Spanish Strawberries* case, Spain failed to stop farmers from damaging imported goods. The Court ruled that this omission to act violated Article 34. **3. Is the measure a quantitative restriction (QR) or an MEQR?** - **Quantitative restriction (QR):** A **ban or outright limitation on imports/exports.** - Example: Banning the import of cheese from France. - **Measures having equivalent effect (MEQR):** Rules that, even if they don't outright ban goods, make importing/exporting harder. - **Dassonville formula:** \"All trading rules capable of hindering, directly or indirectly, actually or potentially, intra-EU trade are MEQRs.\" - **Keck clarification:** Measures related to \"selling arrangements\" (like shop opening hours) are **not MEQRs** if they apply equally to domestic and imported products. **4. Is there an EU rule on the matter that takes priority?** - If there's already an **EU regulation, directive, or harmonized rule** on the matter, it may override conflicting national laws. - Example: Product safety regulations harmonized at the EU level would prevent a member state from imposing stricter safety requirements on imported products. **5. Can the measure be justified?** **(a) Article 36 TFEU: Justifications** - Grounds such as public morality, public policy, public security, health, or protection of cultural heritage. - The measure cannot be a disguised restriction or arbitrary discrimination. **(b) Cassis de Dijon (Mandatory Requirements)(the court laid down the principle of mutual recognition and the rule of reason)(mutual recognition, is a presumption that where goods have been lawfully produced in one member state, there is no reason why they should not be introduced into another member state.** Even if Article 36 does not apply, restrictions may be allowed if they meet \"mandatory requirements\" such as: - Consumer protection - Environmental protection - Fair trading rules **(c) Proportionality Test** Evaluate whether the measure is proportionate: 1. **In accordance with the law:** Legal basis? 2. **Legitimate aim:** Does it pursue a lawful objective? 3. **Necessary:** Is there a less burdensome alternative? 4. **Proportional in a narrower sense:** Balance interests --- are the benefits greater than the trade restriction\'s harm? [Proportionality -- overview of key cases ] *Commission v Denmark* (Danish bottles) (case 302/86) \[1988\] ECR 4607: Danish legislation for the protection of the environment limited the use of beer and soft drinks containers that had not been approved by the national agency for the protection of the environment and required all containers to be reusable and subject to a deposit and return system. The CoJ held that the protection of the environment, as 'one of the EUs essential objectives' may justify restrictions on the free movement of goods. *Bluhme* (C-67/97) \[1998\] ECR I-8033: a legislative measure prohibiting the keeping on the Danish island of laeso of any species of bee other than the subspecies laeso brown bee, constituted an MEQR despite the fact the measure applied to only part of the national territory *Commission v Portugal* (C-265/06) \[2008\] ECR I-2245 *Scotch Whisky Association* \[2017\] UKSC 76 **[What are goods]** The case law tells us that a 'good' is: 1. **Capable of being valued in money** and thus **subject of commercial transactions** 2. Must have **some physical condition,** thus more than granting rights - If not goods, it may be: -a provision of service (TFEU art 56) -an operationg relating to shares, bonds and other securities related to freedom of movement of capital (TFEU art 63) -related to right of establishment (TFEU art 49) **[The treaty foes not tell us what are goods, case law does:]** Commission v Italy (Art Treasures) Case 7/68 \[1968\]: the court indicated that quantitative restrictions (but not charges) would be justified where the object of those restrictions was to prevent art treasures from being exported from a member state. The court states that by goods within the meaning of that provision, there must be understood products which can be valued in money and which are capable as such, forming the subject of commercial transactions. Jagerskiold v Gustafsson Case C-97/98 \[1999\]: it was concluded that the granting of fishing rights and the issue of fishing permits were not 'goods' within the meaning of treaty provisions. Commission v Belgium (wallonian Waste) Case C-2/90 \[1992\]: **[Commission v Italy (art treasures) case 7/68 \[1968\]]** [Free movement of goods -- TFEU art 26-37:] Commission v Italy (art treasures) case 7/68 \[1968\]: - Italy imposed several restrictions on the export of national art treasures to other member states, including a tax on the value of articles exports - If an export tax, absolute prohibition (now TFEU art 30) - But: tax on goods? -key issue based on treaty wording at the time: scope of art 30 engaged? -Art 30 TFEU read together with Art 28: 'customs duties on imports and exports \[of goods\] and charges having equivalent effect shall be prohibited between member states. This prohibition shall also apply to customs duties of a fiscal nature.' - Commission v italy: 'the community is based on a customs union which shall cover all trade in goods'. By goods, within the meaning of that provision there must be understood products; 1) which can be valued in money; 2) which are capable, as such, of forming the subject of commercial transactions. **[Jagerskiold v Gustafsson Case C-97/98 \[1999\]:]** **Free movement of goods -- TFEU art 26-37:** - Jagerskiold case: licenses 'goods' or 'services' -finnish law: no right to fish with a spinning rod unless paid fee for licence -are such licences 'goods' for purpose of TFEU? -district court in Finalnd sought preliminary ruling: 'are fishing rights or spinning licenses 'goods' in accordance with the judgment in Case 7/68 Commission v Italy -Held: a) not goods, but would fall within rules on freedom to provide services; b) but treaty did not apply anyway since all aspects of the case within one member state \[no international case\] -fishing licences: \[33\] can be valued in money and are capable, as such, of forming the subject of commercial transactions, could be goods, but, the grant of fishing rights and the issue of fishing permits..constituted a provision of service **[Commission v Belgium (wallonian waste) case c-2/90 \[1992\]]** - Does 'waste' qualify as 'goods' - Ban on disposing of foreign waste in wallonia - Ban also concerned dumping waste from other parts of Belgium - Held: absolute ban was unlawful in view of EU measures allowing in a strictly controlled way the transfrontier shipment of hazardous waste - 'goods' = products (1) which can be valued in money and (2) which are capable, as such, of forming the subject of commercial transactions. **[Quantitative restrictions on imports and exports & measures having an equivalent effect (MEQRs) to those restrictions TFEU art 34, 35, 36]** **[Quantitative restrictions]** - Quantitative restriction = restriction on number of goods to be imported/exported - Quantity can be set a zero = complete ban on imports/exports - Usually fairly obvious - Not a significant issue today - Except where state accepts that a measure is such a restriction - Possible: justification of restriction according to TFEU Art 36 -R v Minister of Agriculture, fisheries and food ex parter compassion in world farming ltd (c-1/96) \[1998\]: applicant wanted a ban on export of calves to spain -- was this allowed under the rules **[What is an MEQR]** - Procureur du toi v **dassonville** (case 8/74)\[1974\] - Whisky -- certificates of origin required -- harder to obtain if not direct import from source country - '**all trading rules enacted by member states which are capable of hindering, directly or indirectly, actually or potentially, intra community trade** are to be considered as measures having an effect equivalent to quantitative restrictions' - Example: non-activity by state blocks imports without explicit ban -commission v France (Spanish strawberries) \[1997\]: failing to prevent violent protests blocking imports - What exactly can qualify as an MEQR? See directive 70/50 though not in force anymore, useful guidance - Examples of Dir 70/50: lay down less favourable prices for imported products than for domestic products; make access of imported products to the domestic market conditional upon having an agent or representative in the territory of the importing member state **[Distinctly and indistinctly applicable MEQRs]** - Distincty -- rules that treat imports differently from domestic goods - Indistinctly -- rules that are of general application but have an adverse effect on imports - What is the greater mischief? - Treating foreign products differently, or limiting access to the market? -more avenues to justify indistinctly applicable MEQRs (in addition to TFEU art 36) 'rule of reason' (Cassis de Dijon) -justification of distinctly applicable MEQRs (only) via TFEU, art 36 **[Distinctly applicable MEQRs]** - Government campaign to encourage buying domestic products over imported products -commission v Ireland ('buy irish') \[1982\] - Requirement to buy energy from renewable sources locally -preussenElektra AG v Schleswag AG \[2001\]: but german law in question was justified on now TFEU art 36 - Limiting use of names -commission v Germany (weinbrand) \[1975\] **[Indistinctly applicable MEQRs]** - Packaging requirements -Walter Rau v De Smeldt PvbA \[1982\] - Product requirement -Keck \[1993\]: 'rules that lay down requirements to be met by such goods (such as those relating to designation, form, size, weight, composition, presentation, labelling, packaging) constitute \[prohibited\] measures of equivalent effect..this is so even if those rules apply without distinction to all products unless their application can be justified by a public-interest objective taking precedence over the free movement of goods' - Ban on products legitimately sold elsewhere -commission v Italy (trailers) \[2009\] **[Is there a possible justification?]** **[TFEU, art 34-36: prohibitions and possible justification ]** - TFEU art 34: quantitative restrictions on imports \[of goods\] and all measures having equivalent effect shall be prohibited between member states - TFEU art 35: quantitative restrictions on exports \[of goods\] and all measures having equivalent effect, shall be prohibited between member states - TFEU art 36: the provisions of art 34/35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbritrary discrimination or a disguised restriction on trade between member states. **[How to think about possible justifications: basic structure:]** 1. Is this national measure something that gets in the way of trade? -if so, does it fall within the definitions in art 34 and 35 (i.e. quantitative restrictions, or measures having an equivalent effect?) 2\. Is it an issue dealt with by EU rules? Are there EU harmonised rules? -if so, no scope for national rules and must apply EU rule 3\. if it is a barrier and no EU rule to govern the position, is the national law rule justified by one of the reasons set out in art 36 or case law? 4\. if so, it is proportionate? (unwritten requirement) **[Barriers to trade]** - Aim of single market is for it to be easy for goods to be sold and business done throughout EU - All sorts of things can make it harder for a business or product to do well in the market in another country (i.e. many obstacles for free trade to exist) - For EU single market like a single country, ideal is to have a single set of rules - Harmonisation process to establish common rules on all sorts of matters, i.e. product standards, labelling - Where EU rules exist, they must be applied and no scope for different or additional national rules - Where no EU rule, have to see if measures acting as a barrier are legally acceptable art 34-37 TFEU **[Free movement of goods: key cases and derogations]** - *Dassonville* - Certificates of origin for whisky, difficult to obtain where not direct importer - unacceptable - *Cassis de Dijon* - Ban on selling liqueur as too low in alcohol - unacceptable - *Keck* - Ban on selling goods at a loss -- acceptable - *Trailers* - Ban on motorcycle trailers -- restrictive but justified - *Mickelsson* - Ban on jet-skis on some waters -- restrictive but justified - *Bluhme* (C-67/97) \[1998\] ECR I-8033 - Proportionality; concerns bees - *Conegate v HM Customs and Excise* (case 121/85) \[1986\] ECR 1007 - Inflatable dolls - *Scotch Whisky Association v Lord Advocate* (C-333/14) and \[2017\] UKSC 76 - Minimum pricing of alcohol - *Commission v UK* (turkeys) (case 40/82) \[1984\] ECR 2793 - Turkey imports -- health argument but real aim to block imports at Christmas - [Mandatory requirements -- overview of key cases ] - *Commission v Denmark* (Danish bottles) (case 302/86) \[1982\] ECR 4607 - Recyclable containers - *Åklagaren v Mickelsson, Roos* (C-142/05) \[2009\] ECR 4273 - *Commission v Italy (Trailers)* (C-110/05) \[2009\] ECR I-159 - *Commission v Portugal* (C-265/06) \[2008\] ECR I-2245 - Tinted film on car windows **[Procureur du roi v Dassonville \[1974\]]** - Defining 'measures having and equivalent effect' to quantitative restrictions on imports/exports, TFEU art 34, 35 - 'all trading rules enacted by member states which are capable of hindering, directly or indirectly, actually or potentially, intra community trade are to be considered as measures having an effect equivalent to quantitative restrictions' **[Cassis de Dijon:]** This case is important for two reasons: 1. There is therefore no valid reason why, provided that they have been **lawfully produced and marketed in one of the other member states,** alcoholic beverages **should not be introduced into any other member state.** =PRINCIPAL OF MUTUAL RECOGNITION 2. 'in the absence of common rules...**obstacles to \[the free movement of goods\]** must be accepted in so far as those provisions may be recognised as being **necessary in order to satisfy mandatory requirements** relating in particular to the **effectivesness of fiscal supervisions, the protection of public health, the fairness of commercial transactions and the defence of the consumer.** - Restrictions (MEQRs) can be justified for these reasons - PROVIDED THAT the MEQR is indistinctly applicable (to domestic and imported goods) - List is non-exhaustive ('in particular' **[Keck and Mithouard \[1993\]:]** - Aftermath of Dassonville: concern at **excessive use** of EU law to challenge all limits on commercial freedom -dassonville formula very wide -narrowed down by KECK: 'selling arrangements' are not prohibited by TFEU art 34, even though they are technically MEQRs - **[By contrast,]** contrary to what has previously been decided, the application to products from other member states of [national provisions restricting or prohibiting certain selling arrangements] is **not such as to hinder directly or indirectly, actually or potentially, trade between member states \[=no MEQR\]** - Problem in practice: scope of 'certain selling arrangements' how far has dassonville been narrowed? - Is there a further category of MEQRs? (restrictions on the use of a product?) - Italy: national law (highway code) banning two and three wheeled vehicles from towing trailers - Could this measure restrict/hinder trade between member states? - 'measures adopted by a member state the object or effect of which is to treat products coming from other member states less favourably, are to be regarded as measures having an equivalent effect to quantitative restrictions on imports' **[*Åklagaren v Mickelsson, Roos* (C-142/05) \[2009\] ECR 4273 ('use of a product')]** - Swedish legislation restricting the use of jet skis, limiting their use to a certain category of waterways restriction of their use - MEQR? - \[26\] **"\[use restrictions\] affect the access** of that product **to the market** of that Member State." - \[27\] **Consumers,** knowing that the use permitted by such regulations is very limited, **have only a limited interest in buying that product** (see to that effect, *Commission v Italy*, paragraph 57). - \[28\] **such regulations have the effect of hindering the access to the domestic market in question for those goods** and therefore constitute, save where there is a justification \[...\] **measures having equivalent effect to quantitative restrictions on imports** prohibited by Article 28 EC. **\[MEQR: +\]** **[Free movement of goods permissible barriers ]** **Derogations and justifications: two options: TFEU art 36 and Cassis :** - Art 36, the restriction must be proportionate 'justified' - Further possibility to justify restrictions (cassis de Dijon): 'necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer.' (the restriction must be proportionate 'necessary')