Hoorcollege substantive law of the EU - free movement law - Subtantive law of the EU Lecture 1: - Studeersnel (2023)

Subtantive law of the EU

Lecture 1: internal market and free movement of good I

Treaty of Lisbon (2009): EC Treaty became TFEU

There are numerous provisions designed to secure free movement of goods,persons, services and capital and healthy competition. Since these provisions ofprimary EU law mostly take the form of prohibitions, they are often referred to asexamples of negative integration.

The Treaty also empowers the institutions to adopt legislation aimed at removingobstacles to the functioning of the internal market (see for example, Articles 50,59 and 114 TFEU). The resulting harmonisation pursued by way of the secondarylegislation adopted (mainly in the form of directives or regulations) is viewed asan example of positive integration.

Articles 28 and 30 TFEU relate to goods at the moment they cross the borderArticle 110 TFEU relates to goods once they are inside foreign territory.

Forms of market integration:

 Free trade area: vrijhandelszoneNo quota on goods; grouping of countries within which tariffs and non-tariff tradebarriers between the members are generally abolished but with no commontrade policy toward non-members.

 Customs union: douane-unieGroups of countries that apply one common system of procedures, rules andtariffs for all or almost all their imports, exports and transiting goods. Usually,countries participating in customs unions share common trade and competitionpolicies.

  1. Prohibition of customs duties and quantitative restrictions (quota) in tradebetween the member states.
  2. Adoption of Common Customs Tariff (CCT)
  3. Common commercial policy towards third countries (Article 207 TFEU)

 Common/internal/single market: Europese interne marktA single internal market without borders. The EU aims to enable EU citizens tostudy, live, shop, work and retire in any EU country and enjoy products from allMember States. it ensures free movement of goods, services, capital and personsin a single EU internal market, by removing technical, legal and bureaucraticbarriers.

“The internal market shall comprise an area without internal frontiers in whichthe free movement of goods, persons, services and capital is ensured inaccordance with the provisions of the Treaties.” (Article 26(2) TFEU)

 Economic & monetary UnionThis involves the coordination of economic and fiscal policies, a commonmonetary policy, and a common currency, the euro.

 Political union

It’s a unique economic and political union between 27 European countries.

(EU had eerst alleen een common currency, zonder een common policy.)

--------- Focus more on internal market;

Two types of provisions:  Free movement provisions: mainly addressed to Member States  EU competition law provisions: mainly addressed to undertakings ( = companies)

Free Movement  Cross-border element: who or what crosses theborder?  Good: definition of a ’good’ (see case C-2/90 Commission/Belgium)  Free movement of goods  Service: definition of a service (see Article 57 TFEU)  free movement of services  Person of company  free movement of persons (non-economic EU citizens, workers & establishment or services)  Capital: see definition of capital movements in Annex to Directive 88/361  free movement of capital

Free movement law only applies to cross-border (only 1 exception) So internal discrimination is not covered by free movement law

Restriction to the exercise of the Fundamental Freedoms 1. protectionist measures 2. Disparities (differences) in the national laws and rules of the member states

Solving the restrictions:  Negative integration: prohibitions addressed to member states (the free movement provisions in the TFEU)  Positive integration: obligation imposed on member states to ensure that their national legislation complies with an EU norm (harmonisation) (directive regulations)

Definition of the term ‘good’(Case 7/68, Commission v. Italy and Case C-2/90, Commission v. Belgium, para.23)

“any product which can be valued in money and which is capable, as such, offorming the subject of commercial transactions”

Free movement of goods  Harmonisation? Yes: examine under the relevant directive/regulation  No? The Treaty provisions on free movement of goods apply

  1. If so, do the domestic goods benefit from some kind of fiscal protectionism?

Differences between Article 30 TFEU and Article 110 TFEU  Article 30 TFEU applies to charges levied as a result of goods crossing the border, while Article 110 TFEU applies to taxes imposed both on domestic and imported/exported goods

 Article 30 TFEU contains a ban, while under Article 110 TFEU national taxes are permitted, provided that these taxes do not lead to discrimination or protectionist effectsArt 30: Imported/exported good; crossing the border Contains a ban of national taxation

Art 110:  Both domestic goods and imported/exported goods  national taxes are permitted, provided that these taxes do not lead to discrimination or protectionist effects


C-230/89 Commission v. Greece, ECLI:EU:C:1991:

  • Art 110 TFEU paragraph 2, protectionismThis case illustrates art. 110 paragraph 2 TFEU. This article is infringed whenmember state imposes higher taxes on important good as to afford indirectprotection to competing domestic goods. No advantage maybe given to adomestic product.

Case C-72/03, Carbonati Apuani Srl, ECLI:EU:C:2004:

  • Art 30 TFEU, charges having equivalent effectThe principle of a customs union requires the free movement of good to beensuredwithin the union generally, not only in trade between M: this includes bothinterstate frontiers and frontiers within a state. Charges having equivalent effectcan therefore also be:
  • Pecuniary charges
  • Imposed unilaterally by the state
  • Because they cross a frontier (doesn’t matter whether this is an interstatefrontier or a frontier within a member state) remuneration paid for a service rendered that is in proportion is nota customs duty! name given to a charge is not relevant

This is a controversial case: - There is no support in the TFEU to extend the prohibition to charges imposed on goods which cross a frontier within a member state - The CJEU ignores the fact that art 28(1) TFEU explicitly states that the free movement applies exclusively between member states

Lecture 2: Free Movement of Goods II

Definition of ‘quantitative restrictions’, Case 2/73 Geddo“(...) measures which amount to a total or partial restraint of, according to thecircumstances, imports, exports or goods in transit.”

Articles 34 & 35 TFEU and quantitative restrictions: - Quantitative restrictions are prohibited - These restriction can only be justified on the basis of Article 36 TFEU

Measure having equivalent effect (MEQR) for the purposes of Art. 34TFEU:(measure equivalent to a quantitative restriction) o the Dassonville Formula para 5:“All trading rules enacted by member states which are capable of hindering,directly or indirectly,actually or potentially, intra-Community trade.” o Cassis de DijonIt is sufficient that a national law or tule can hinder trade between member statesin some ways.

Consequences of the Cassis de Dijon ruling - Distinctly applicable rules are caught by the concept of measures having equivalent effect - Indistinctly applicable rules are caught by the concept of measures having equivalent effect

Example: the Reinheitsgebot case - German law precluded that beer containing additives was sold to consumer - Although this requirement applied indistinctly to domestic and foreign products, it hindered the - free movement of goods and constituted, for that reason, a MEQR. - The Court made references to Dassonville and Cassis de Dijon.

Keck: limiting the scope of MEQR: - product requirements; par 15  requirements  goods - selling arrangements; par 16  selling arrangements  all relevant traders = universality principle  affect in the same manner, in law and in fact = neutrality principle

The DocMorris judgement: downplaying the Keck approach? - Pursuant to German law it was not permitted to sell medicines through internet - The court examined whether this piece of German law governed selling arrangement Bottleneck: is the sale foreign products more affected than the sale ofdomestic products in fact?

The Michelsson judgement: a new category of MEQR is introduced - according to Swedish law water skis can only be used on general navigable waterways - The use of water skies us only possible in very exceptional circumstances

  • Products lawfully produced and marketed in one member state, must in principle be

  • admitted to the market of all other member states.

  • The member state of import may not in principle apply its own rules to imported products.

  • Member states are in principle required to recognise each other’s rules as being

  • equivalent.

  • Rebuttal (relying on justification grounds):

    1. Member state of origin does not protect the interest in question.
    2. Member state of origin does not protect the interest in questionadequately.

Lecture 3: free movement of persons

Citizens of the Union (article 20 lid 1 TFEU)

  • European citizen is every person holding the nationality of a Member State

 two categories: - economically active - Non-economically active

EU companies; art 54 first section TFEU - Companies or firms must be formed in accordance with the law of a Member State - A company or firm must have a registered office, central administration of principle place of business within the Union; A seat within the EUCompanies cannot rely on citizen and workers rules

Freedom of establishment: - when you don’t have boss; zzp’er - when a company moves to another state

Rights of economically active citizens: - Migration Rights - Market Access Rights

Rights of citizens of the Union: (economically active and non-active) - The right to move and reside freely within the territory of the member states (migration rights) (Article 21(1) TFEU) - The right to equal treatment (Article 18(1) TFEU and/or Article 24(1) Directive 2004/38/EC) first two are the most important - The right to vote and stand as a candidate at municipal elections in the host state (Article 22(1) TFEU) - The right to vote and stand as a candidate in elections to the European Parliament in the host state (Article 22(2) TFEU) - Diplomatic or consular protection by the authorities of other member states in third countries (Article 23 TFEU)

  • The right to petition the European Parliament, the right to apply to the European Ombudsman and the right to write to any of the institutions in one of the official languages of the Union and to receive an answer in the same language (Article 24 TFEU)
  • The right of access to European Parliament, Council and Commission documents (Article 15(3) TFEU)

Main rights of citizens of the Union:Migration rights(Completely harmonised in Directive 2004/38/EC only for natural persons, not forcompanies) - right to leave a member state (right of exit) - right to enter a member state (right of entry) - right of residence in a member state

Market access rights/right to equal treatment(If no harmonisation: use provisions of TFEU + case law)Prohibited: - direct discrimination on grounds of nationality - indirect discrimination on grounds of nationality - all restrictions on access to the market of the host state/which deter the exercise of free movement

Migration rights (directive 2004/38/EC): travel rights - Article 4: right of exit – valid identity/passport - Article 5: right of entry – valid identity card/passport

The Schengen Agreement: free movement without showing passport

Right of residence for a maximum of 3 months Art 6 of the directive : valid identity card or passport

Right of residence for longer than 3 months but shorter than 5 years Conditions are set out in art 7-15 of the directive

Right of permanent residence Art 16-21 of the directive: continuous legal residence for a period of 5 years

Conditions for right of residence of migrating Union citizen for longerthan 3 months but shorter than 5 years (Article 7(1)):

  1. Article 7(1)(a): workers or self-employed
    • Registration with competent authorities (Article 8(1))
    • No further conditions
  2. Article 7(1)(b): non-economically active Union citizens
    • Sufficient financial resources
    • Comprehensive sickness insurance cover
    • Registration with competent authorities (Article 8(1))
  3. Article 7(1)(c): students
    • Proof of enrolment with a recognised educational establishment
    • Sufficient financial resources
    • Comprehensive sickness insurance cover
    • Registration with competent authorities (Article 8(1))
  4. Article 7(1)(d): Union citizen as family member of migrating Union citizen

a) suitable/adequate way of protecting the interest in question (must achieve objective in a consistent and systematic manner)b) Test of the least restrictive measure

Protection of public policy and public security - Article 27 1. A member state may not invoke protection of public policy or public security for economic 2. purposes (no protectionism). 3. Measures taken by a member state must be based exclusively on the personal conduct of the 4. individual concerned (no measures of general prevention). 5. The personal conduct of the individual concerned must represent a genuine, present and 6. sufficiently serious threat affecting one of the fundamental interests of society (previous criminal 7. conviction not enough). 8. Measures taken must be must be proportionate (proportionality test) a. suitable/adequate way of protecting the interest in question (must achieve objective in a consistent and systematic manner) b. Test of the least restrictive measure; proportionality

Factors to be taken into consideration before issuing an expulsion order

  • Article 28(1)
    1. How long the individual has resided on its territory.
    2. His/her age.
    3. State of health.
    4. Family and economic situation.
    5. Social and cultural integration into the host state
    6. Extent of his/her links with country of origin.

Market access rights/right toequal treatmentEconomically active citizens

  • Workers (Art 45 TFEU and Reg. 492/2011)
  • Establishment (Art. 49 TFEU and Dir. 2006/123)
  • Services providers/recipients (Art. 56 TFEU and Dir. 2006/123)

Non-economically active citizens - Art 18 TFEU (non-discrimination) - Art. 24 (1) Dir. 2004/38 (equal treatment)

Equal treatment rights (Art. 18 TFEU and/or Art. 24 (1) Directive2004/38): ban on restricting equal treatment rights - Direct discrimination on grounds of nationality - Indirect discrimination on grounds of nationality No distinction between MS and non-MS citizen, but they are more difficult tomeet for non-MS citizens/nationals

  • Justification grounds in relation to non-economically active citizens Art. 24 (2) Directive 2004/ Social assistance and student grants

Social assistanceDefinition of social assistance:“(...) all assistance schemes established by the public authorities, whether atnational, regional or locallevel, to which recourse may be had by an individual who does not haveresources sufficient to meethis own basic needs and those of his family (...)” (Case C-67/14, Alimanovic, para.44)

Justifications for refusing to grant social assistance benefits (Art. 24 (2)Dir. 2004/38) 1. First 3 months of residence 2. Job-seekers with a right of residence based on Article 14(4)(b) Directive 2004/ 3. Student maintenance (grants or loans) during the first 5 years of residence 4. Union citizen does not have a legal right of residence based on Directive 2004/

Lecture 4: Free movement of workers

Conditions for applying Article 45 TFEU: - natural person - citizen of the Union (art 20 TFEU) - worker (Laurie Blum & iraklis Haralambidis par 28) - perform services for another person - Perform services under the direction of another person (relation or subordination) - Be paid for doing so, receive remuneration - Perform effective and genuine activities to the exclusion of activities which are regarded as marginal or ancillary part-time job is also allowed

Direct effect of Article 45 TFEU:Vertical – case commission/FranceHorizontal – case Roman Angonese (par 36) majority of companies are private enterprises !! Article 48 TFEU also applies to private persons

Useful effect principle !!!

National measures prohibited under Article 63(1) TFEU 1) Directly discriminatory measures 2) Indirectly discriminatory measures 3) All restrictions on the free movement of capital, even if genuinely non- discriminatory in nature  Golden shares. Almost always by governments (before it privatised a company)Commission v Netherlands; golden shares regarding KPN en postal company(PostNL) make it less attractive for other companies to make an investment

Tax exceptions of Art 65 1a TFEU  specific derogationPeursche case

Art 65 1b TFEU  general derogation

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