<< CourtofJustice.EU >>

Case C‑202/13, McCarthy

2015-01-02T12:38:00.000+01:00

Where third-country nationals hold a ‘residence card of a family member of a Union citizen’, UK cannot make right of entry subject to requirement to first obtain visa

>> McCarthy had dual British and Irish nationality. He and his wife, a Colombian national, had been resident since 2010 in Spain where they had a house. Mr McCarthy and Ms McCarthy Rodriguez also owned a house in the United Kingdom and travelled regularly to that country. Ms McCarthy Rodriguez held a ‘residence card of a family member of a Union citizen’ (‘residence card’) issued by the Spanish authorities. Under the UK provisions concerning immigration, in order to be able to travel to the UK holders of such a card must apply for an entry permit (‘EEA family permit’), which was valid for six months. This family permit could be renewed provided that its holder went in person to a British diplomatic mission abroad and filled in a form setting out details relating to his or her finances and employment. Taking the view that those national provisions infringed their rights of free movement, in 2012 the McCarthy family brought an action before the High Court of Justice of England and Wales, Queen’s Bench Division (Administrative Court).

This Court asked whether Article 35 of Directive 2004/38 and Article 1 of Protocol No 20 must be interpreted as permitting a Member State to require, in pursuit of an objective of general prevention, family members of a Union citizen who were not nationals of a Member State and who held a valid residence card issued under Article 10 of Directive 2004/38 by the authorities of another Member State to be in possession, pursuant to national law, of an entry permit, such as the EEA family permit, in order to be able to enter its territory.

The Court first of all stressed that measures adopted by the national authorities, on the basis of Article 35 of Directive 2004/38, in order to refuse, terminate or withdraw a right conferred by that directive must be based on an individual examination of the particular case.

The UK could according to the Court not refuse family members of a Union citizen who were not nationals of a Member State and who held a valid residence card, issued under Article 10 of Directive 2004/38, the right, as provided for in Article 5(2) of the directive, to enter their territory without a visa where the competent national authorities had not carried out an individual examination of the particular case. The Member States were required to recognise such a residence card for the purposes of entry into their territory without a visa, unless doubt was cast on the authenticity of that card and the correctness of the data appearing on it by concrete evidence that related to the individual case in question and justifies the conclusion that there is an abuse of rights or fraud. The Court stated that proof of an abuse required, first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the EU rules, the purpose of those rules had not been achieved, and, second, a subjective element consisting in the intention to obtain an advantage from the EU rules by artificially creating the conditions laid down for obtaining it (judgments in Hungary v Slovakia, C‑364/10, EU:C:2012:630, on which I wrote this post).

The Court thus concluded that Article 35 of Directive 2004/38 must be interpreted as not permitting a Member State to require, in pursuit of an objective of general prevention, family members of a Union citizen who were not nationals of a Member State and who beld a valid residence card, issued under Article 10 of that directive by the authorities of another Member State, to be in possession, pursuant to national law, of an entry permit, such as the EEA family permit, in order to be able to enter its territory.

With regard to the interpretation of Protocol No 2, the Court held in the case of family members of a Union citizen who were not nationals of a Member State and who sought to enter the United Kingdom in reliance upon a right of entry provided for by Directive 2004/38, verification, for the purposes of Article 1 of Protocol No 20, consisted, in particular, in checking whether the person concerned is in possession of the documents prescribed in Article 5 of that directive.The Court held that the Member States wree, in principle, required to recognise a residence card issued under Article 10 of Directive 2004/38, for the purposes of entry into their territory without a visa. Article 1 of Protocol No 20 authorised the United Kingdom to verify whether a person seeking to enter its territory in fact fulfilledthe conditions for entry, including those provided for by EU law. On the other hand, it did not permit the United Kingdom to determine the conditions for entry of persons who had a right of entry under EU law and, in particular, to impose upon them extra conditions for entry or conditions other than those provided for by EU law. The Court held that that was precisely the case here. By requiring an EEA family permit to be obtained in advance, the national legislation at issue in the main proceedings prescribed, for family members of a Union citizen who were not nationals of a Member State and who were in possession of a valid residence card issued under Article 10 of Directive 2004/38, a condition for entry which was additional to the conditions for entry provided for in Article 5 of the directive, and not simply verification of those conditions ‘at frontiers’.

Text of judgment

Case C‑354/13, Kaltoft

2015-01-02T12:02:00.001+01:00

EU law not laying down principle of non-discrimination on grounds of obesity

The Employment Equality Directive (Directive 2000/78/EC) prohibits discrimination based on religion, belief, disability, age or sexual orientation in relation to employment is prohibited.

Mr Kaltoft worked for 15 years for the Municipality of Billund as a childminder. In the course of that activity, he was responsible for taking care of children in his home. On 22 November 2010, the municipality terminated his employment contract. The municipality did not indicate the reasons as to why it was Mr Kaltoft who was chosen to be dismissed, but Mr Kaltoft’s obesity was mentioned during a meeting on his dismissal. The municipality however denied that obesity was among the reasons for Mr Kaltoft’s dismissal. Taking the view that the dismissal resulted from unlawful discrimination on grounds of obesity, the Fag og Arbejde (FOA), a workers’ union acting on behalf of Mr Kaltoft, brought proceedings before a Danish court seeking a declaration of that discrimination as well as compensation.

The referring Court on the one hand asked whether EU law itself prohibitted discrimination on grounds of obesity, and on the other hand whether obesity could constitute a disability and therefore falls within the scope of the EE- directive.

The Court first of all reiterated that the general principle of non-discrimination was a fundamental rights which formed an integral part of the general principles of EU law. However, no provision of the TEU or TFEU prohibitted discrimination on grounds of obesity as such. In particular, neither Article 10 TFEU nor Article 19 TFEU made reference to obesity. Nor did European Union secondary legislation lay down a general principle of non-discrimination on grounds of obesity as regards employment and occupation. In particular, Directive 2000/78 did not mention obesity as a ground for discrimination.

The Court reiterated that the scope of Directive 2000/78 should not be extended by analogy beyond the discrimination based on the grounds listed exhaustively in Article 1 thereof (see judgments in Chacón Navas, EU:C:2006:456, para. 56, and Coleman, C‑303/06, EU:C:2008:415, para. 46). Consequently, obesity could not as such be regarded as a ground in addition to those in relation to which Directive 2000/78 prohibits discrimination (see, by analogy, judgment in Chacón Navas, EU:C:2006:456, para. 57).

The Court added that the provisions of the Charter of Fundamental Rights of the European Union were likewise inapplicable in such a situation (see, to that effect, judgment in Åkerberg Fransson, C‑617/10, EU:C:2013:105, on which I wrote this post).

The Court thus found that EU law did not lay down a general principle of non-discrimination on grounds of obesity as such as regards employment and occupation.

On the question whether obesity could constitute a disability and therefore falls within the scope of the EE- directive, the Court stressed that the concept of ‘disability’ must be understood as referring to a limitation which resulted in particular from long-term physical, mental or psychological impairments which in interaction with various barriers may hinder the full and effective participation of the person concerned in professional life on an equal basis with other workers (see HK Danmark, EU:C:2013:222, paras. 37 to 39; Z., C‑363/12, EU:C:2014:159, para. 76; and Glatzel, C‑356/12, EU:C:2014:350, para 45).

The Court added in the event that, under given circumstances, the obesity of the worker concerned entails a limitation which results in particular from physical, mental or psychological impairments that in interaction with various barriers might hinder the full and effective participation of that person in professional life on an equal basis with other workers, and the limitation was a long-term one, obesity could be covered by the concept of ‘disability’ within the meaning of Directive 2000/78 (see, to that effect, judgment in HK Danmark, EU:C:2013:222, paragraph 41).

Such would be the case, in particular, if the obesity of the worker hindered his full and effective participation in professional life on an equal basis with other workers on account of reduced mobility or the onset, in that person, of medical conditions preventing him from carrying out his work or causing discomfort when carrying out his professional activity.

It is for the referring court to ascertain whether, in the case in the main proceedings, irrespective of the fact that Mr Kaltoft, carried out his work for approximately 15 years, his obesity entailed such a limitation. The Court stressed that should the referring court arrive at such conclusion, pursuant to Article 10(1) of Directive 2000/78, Member States were to take such measures as were necessary, in accordance with their national judicial systems, to ensure that, when persons who considered themselves wronged because the principle of equal treatment had not been applied to them establish, before a court or other competent authority, facts from which it might be presumed that there had been direct or indirect discrimination, it was for the respondent to prove that there had been no breach of that principle. According to Article 10(2), Article 10(1) did not prevent Member States from introducing rules on the burden of proof which are more favourable to plaintiffs.

Text of Judgment

Case C‑416/13, Vital Pérez

2015-01-02T10:40:00.001+01:00

Local rule setting maximum age for recruitment of police officers at 30 years contrary to EU law

>> The Employment Equality Directive (The EE Directive, Directive 2000/78/EC) prohibits any form of discrimination in employment based directly or indirectly on age. Mr Vital Pérez criticised the municipality of Oviedo (pictured) for having approved the specific requirements laid down in a notice of competition to fill 15 posts as local police officers, since one of the requirements was that applicants must not be over 30 years of age. According to Mr Vital Pérez’s submission, this requirement infringed his fundamental right of access on equal terms to public office. The referring Court asked whether the EE-Directive allowed a maximum age of 30 years to be set for access to the post of local police officer in a notice of competition issued by a municipality applying a regional law of a Member State.

The Court first of all reiterated that Directive 2000/78 laid down a general framework in order to guarantee equal treatment ‘in employment and occupation’ to all persons, by offering them effective protection against discrimination on one of the grounds covered by Article 1, which include age (Hütter, C‑88/08, EU:C:2009:381, para. 33, and Georgiev, C‑250/09 and C‑268/09, EU:C:2010:699, para. 26). The Court stressed that the directive applied to a situation such as the one which gave rise to the dispute before the referring court.It was obvious that such the rule concerned introduced a difference of treatment based directly on age as referred to in Articles 1 and 2(2)(a) of Directive 2000/78, read together.

It remained to be ascertained whether such a difference of treatment might be upheld under Articles 4(1) and 6(1) of Directive 2000/78, since Article 4(1) of Directive 2000/78 provides that, ‘Member States may provide that a difference of treatment which is based on a characteristic related to any of the grounds referred to in Article 1 [of that directive] shall not constitute discrimination where, by reason of the nature of the particular occupational activities concerned or of the context in which they are carried out, such a characteristic constitutes a genuine and determining occupational requirement, provided that the objective is legitimate and the requirement is proportionate’.

The Court has held previously that it is clear from Article 4(1) of Directive 2000/78 that it is not the ground on which the difference of treatment is based but a characteristic related to that ground which must constitute a genuine and determining occupational requirement. According to settled case-law, the possession of particular physical capacities is one characteristic relating to age (see Wolf, C‑229/08, EU:C:2010:3 and Prigge and Others, C‑447/09, EU:C:2011:573).

In the present case, the Court stressed that although it was true that some of those duties, such as providing assistance to citizens or traffic control, were not likely to require the use of physical force, the fact remained that tasks relating to the protection of persons and property, the arrest and custody of offenders and the conduct of crime prevention patrols might require the use of physical force. The nature of the latter duties did require a particular physical capability in so far as physical defected in the exercise of those duties might have significant consequences not only for the police officers themselves but also for the maintenance of public order (see, to that effect, judgment in Prigge and Others, EU:C:2011:573, para. 67). It followed that the possession of particular physical capacities might

The Court held that it therefore had to determine whether the particular physical capacities required for the post of local police officer were inevitably related to a particular age and were not found in persons over a certain age.

According to the findings of the referring court, given the tasks assigned to local police officers not all of the capacities those officers must possess in order to be able to perform some of their duties were comparable to the ‘exceptionally high’ physical capacities which were regularly required of officials in the fire service, most notably in fighting fires.

It should be noted that, as indicated in paragraph 17 of this judgment, Point 3.5 of the notice of competition intended to fill local police officer posts for the Ayuntamiento requires applicants to possess ‘the appropriate level of physical and mental fitness to perform the duties involved in the post in question and to perform the physical tests’ specified in that notice. This involves stringent; eliminatory physical tests which, according to the referring court, would make it possible to attain the objective of ensuring that local police officers possessed the particular level of physical fitness required for the performance of their professional duties in a less binding manner than the fixing of a maximum age limit.

There is, moreover, nothing in the case-file or in the written observations submitted to the Court to indicate that the objective of safeguarding the operational capacity and proper functioning of the local police service made it necessary to maintain a particular age structure, which in turn required the recruitment exclusively of officials under 30 years of age. It followed from those considerations that, in fixing such an age limit, Law 2/2007 imposed a disproportionate requirement.

Consequently, Article 4(1) of Directive 2000/78 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which set the maximum age for recruitment of local police officers at 30 years. Nor was such requirement justified by a legitimate aim within the meaning of Article 6(1) of Directive 2000/78 .

The Court held that it could not be inferred from Article 6(1) of Directive 2000/78 that a lack of precision in the national legislation at issue in the main proceedings as regards the aim pursued automatically excluded the possibility that it might be justified under that provision. In the absence of such precision, it was important that other elements, derived from the general context of the measure concerned, should make it possible to identify the underlying aim of that measure for the purposes of review by the courts as to its legitimacy and as to whether the means put in place to achieve that aim were appropriate and necessary (see Commission v Hungary, C‑286/12, EU:C:2012:687, on which I wrote this post).

The national legislation could however not be be considered necessary in order to ensure that those officers had a reasonable period of employment before retirement for the purposes of point (c) of the second subparagraph of Article 6(1) of Directive 2000/78.

Text of Judgment

Case C-404/13, ClientEarth

2015-01-01T22:54:00.000+01:00

Claude Monet - Musée d'Orsay

Court clarifies Member States’ obligations as regards respecting the limit values for nitrogen dioxide

>> The Air Quality Directive (Directive 2008/50/EC ) establishes limit values for certain pollutants in ambient air. As regards nitrogen dioxide, the limit values must not be exceeded after 1 January 2010. The obligation to comply with the limit values for nitrogen dioxide laid down in Annex XI to Directive 2008/50 by 1 January 2010, the date specified in that annex, results from the second subparagraph of Article 13(1) of the directive. Article 22(1) of Directive 2008/50 provides, however, for the possibility of postponing the deadline initially set where conformity with the limit values cannot be achieved by that deadline, on condition that the Member State concerned establishes an air quality plan for the zone or agglomeration to which the postponement would apply, which meets certain requirements. In particular, the plan must be established in accordance with Article 23 of Directive 2008/50. It must also contain the information listed in Section B of Annex XV relating to the pollutants concerned and demonstrate how conformity with the limit values will be achieved before the new deadline. Under Article 22(4) of Directive 2008/50, those zones, agglomerations and plans must be submitted to the Commission for approval. Article 22(4) of Directive 2008/50 obliges the Member State concerned to notify the Commission of the zones and the agglomerations to which it considers Article 22(1) applies and to submit the air quality plan referred to in the latter provision.

In the UK the limit values for nitrogen dioxide were exceeded in 2010 in 40 of the 43 zones set up for the purposes of the directive. In September 2011, the UK submitted plans to the Commission together with applications for the postponement of the deadline for 24 of the 40 zones for which the UK predicted that the limit values would be met by 1 January 2015. For 16 zones or agglomerations (including Greater London), in respect of which the air quality plans projected compliance with the limit values between 2015 and 2025, the UK did not request a time extension. ClientEarth, an environmental NGO, asked the British courts to require the UK Government to revise the plans to show how the nitrogen dioxide limit values would be respected as soon as possible, and by 1 January 2015 at the latest.

Hearing the case as final court of appeal, the Supreme Court of the United Kingdom asked the Court of Justice whether Article 22 of the Air Quality Directive must be interpreted as meaning that, where conformity with the limit values for nitrogen dioxide laid down in Annex XI to that directive could not be achieved in a given zone or agglomeration of a Member State by 1 January 2010, the date specified in Annex XI, that State was, in order to be able to postpone that deadline for a maximum of five years, obliged to make an application for postponement in accordance with Article 22(1) of Directive 2008/50 and (ii) whether, if that was the case, the State may nevertheless be relieved of that obligation in certain circumstances.

The Court first of all held with regards to the question whether, in order to be able to postpone by a maximum of five years the deadline specified in Annex XI to Directive 2008/50, the Member State concerned was obliged to make an application and to establish for that purpose such a plan, when the conditions referred to in Article 22(1) of the directive were met, it must be held that, while the wording of that provision did not give clear indications in that respect, it followed both from the context of that provision and the aim pursued by the EU legislature that Article 22(1) must be interpreted to that effect.

However, the Court stressed that while, as regards sulphur dioxide, PM10, lead and carbon monoxide, the first subparagraph of Article 13(1) of Directive 2008/50 provided that Member States were to ‘ensure’ that the limit values were not exceeded, the second subparagraph of Article 13(1) stated that, as regards nitrogen dioxide and benzene, the limit values ‘may not be exceeded’ after the specified deadline, which amounted to an obligation to achieve a certain result.

The Court stressed that, consequently, Member States must take all the measures necessary to secure compliance with that requirement and could not consider that the power to postpone the deadline, which they were afforded by Article 22(1) of Directive 2008/50, allowed them to defer, as they wished, implementation of those measures.

The Court held that Article 22(1) of Directive 2008/50 must be interpreted as meaning that, in order to be able to postpone by a maximum of five years the deadline specified by the directive for achieving conformity with the limit values for nitrogen dioxide specified in Annex XI thereto, a Member State was required to make an application for postponement when it was objectively apparent, having regard to existing data, and notwithstanding the implementation by that Member State of appropriate pollution abatement measures, that conformity with those values could not be achieved in a given zone or agglomeration by the specified deadline.

The Court held where it is apparent that conformity with the limit values for nitrogen dioxide established in Annex XI to Directive 2008/50 could not be achieved in a given zone or agglomeration of a Member State by 1 January 2010, the date specified in that annex, and that Member State had not applied for postponement of that deadline under Article 22(1) of Directive 2008/50, the fact that an air quality plan which complied with the second subparagraph of Article 23(1) of the directive had been drawn up did not, in itself, permit the view to be taken that that Member State had nevertheless met its obligations under Article 13 of the directive.

The referring court also asked whether Articles 4 TEU and 19 TEU and Article 30 of Directive 2008/50 must be interpreted as meaning that, where a Member State had failed to comply with the requirements of the second subparagraph of Article 13(1) of Directive 2008/50 and had not applied for a postponement of the deadline as provided for by Article 22 of the directive, it was for the national court having jurisdiction, should a case be brought before it, to take, with regard to the national authority, any necessary measure, such as an order in the appropriate terms, so that the authority established the plan required by the directive in accordance with the conditions laid down by the latter.

The Court as a preliminary point that the reason why the interpretation of Article 30 of Directive 2008/50, which related to the system of penalties that must be implemented by the Member States, was relevant to the dispute in the main proceedings, was not sufficiently clear from the file submitted to the Court.

As regards Article 4 TEU, the Court reiterated that under the principle of sincere cooperation laid down in paragraph 3 of that article, it was for the Member States to ensure judicial protection of an individual’s rights under EU law (see, to that effect, inter alia the judgment in Unibet, C‑432/05, EU:C:2007:163, on which I wrote this post). In addition, Article 19(1) TEU required Member States to provide remedies sufficient to ensure effective legal protection in the fields covered by EU law.

The Court held that he natural or legal persons directly concerned by the limit values being exceeded after 1 January 2010 must be in a position to require the competent authorities, if necessary by bringing an action before the courts having jurisdiction, to establish an air quality plan which complied with the second subparagraph of Article 23(1) of Directive 2008/50, where a Member State had failed to secure compliance with the requirements of the second subparagraph of Article 13(1) of Directive 2008/50 and had not applied for a postponement of the deadline as provided for by Article 22 of the directive (see, by analogy, judgment in Janecek, EU:C:2008:447, para. 39).

The Court held that, as regards the content of the plan, it followed from the second subparagraph of Article 23(1) of Directive 2008/50 that, while Member States had a degree of discretion in deciding which measures to adopt, those measures must, in any event, ensure that the period during which the limit values were exceeded was as short as possible.

Text of Judgment

Joined Cases C‑344/13 and C‑367/13, Blanco and Fabretti

2015-01-01T21:26:00.002+01:00

Italian legislation taxing winnings from games of chance obtained abroad but exempting such winnings obtained on its territory infringing freedom to provide services

>> In Italy, winnings from casinos were subject to income tax, while winnings from casinos situated in Italy were exempt from that tax, to the extent that the taxation of winnings paid out by those casinos was included in the tax on entertainment. In essence, for people residing in Italy, only winnings obtained in casinos situated abroad were included in the basis of assessment for income tax.

When accused by the Italian tax authorities of failing to declare various winnings obtained in casinos abroad, Mr Blanco and Mr Fabretti claimed that the tax assessments infringed the principle of non-discrimination since winnings made in Italy were exempt from tax. The Italian authorities however argued that that that national legislation was aimed at preventing money laundering abroad and at limiting the flow of capital abroad (or the arrival in Italy) of capital whose origin was uncertain.

The referring court asked whether Articles 52 and 56 TFEU must be interpreted as precluding the Italian legislation concerned and, if so, whether such infringement was justified on grounds of of public policy, public security or public health.

The Court reiterated that the freedom to provide services under Article 56 TFEU required not only the elimination of all discrimination on grounds of nationality against providers of services established in other Member States, but also the abolition of any restriction — even if it applied without distinction to national providers of services and to those from other Member States — which was liable to prohibit, impede or render less attractive the activities of a provider of services established in another Member State where he lawfully provided similar services (see, inter alia, judgment in Dirextra Alta Formazione, C‑523/12, EU:C:2013:831, para. 21).

The Court also reiterated that the provisions of the FEU Treaty on the freedom to provide services applied to an activity which enabled people to participate in gambling in return for remuneration (judgment in Zenatti, C‑67/98, EU:C:1999:514, para. 24). Moreover, the freedom to provide services was for the benefit of both providers and recipients of services (judgment in Liga Portuguesa de Futebol Profissional and Bwin International, C‑42/07, EU:C:2009:519, para. 51).

The Court found that the Italian legislation gave rise to a discriminatory restriction on the freedom to provide services as guaranteed by Article 56 TFEU in relation to not only service providers but also the recipients of those services.

Moreover, according to the Court of Justice, that restriction was not justified by a need to prevent money laundering and compulsive gambling. The Court has over the years repeatedly stated that the legislation on games of chance is one of the areas in which there are significant moral, religious and cultural differences between the Member States. In the absence of harmonisation in the field at EU level, it is for each Member State to determine in those areas, in accordance with its own scale of values, what is required in order to ensure that the interests in question are protected (see, inter alia, judgments in Stanleybet International and Others, C‑186/11 and C‑209/11, EU:C:2013:33, on which I wrote this post , on which I wrote this post and Digibet and Albers, C‑156/13, EU:C:2014:1756, paragraph 24).

However, in the present case, the Court stressed that national legislation, such as that at issue in the main proceedings, could be justified only insofar as it pursued objectives corresponding to the grounds of public policy, public security or public health within the meaning of Article 52 TFEU. In addition, the restrictions imposed by the Member States must satisfy the conditions of proportionality. The Court reiterated that national legislation was appropriate for guaranteeing attainment of the objective pursued only if it genuinely reflected a concern to attain it in a consistent and systematic manner (see, to that effect, the judgment in Engelmann, C‑64/08, EU:C:2010:506, on which I wrote this post)

The Court found that in circumstances such as those at issue in the main proceedings, the taxation by a Member State of winnings from casinos in other Member States and the exemption of such winnings from casinos situated on its territory were not a suitable and coherent means of ensuring the attainment of the objective of combatting compulsive gambling, as such an exemption is in fact likely to encourage consumers to participate in games of chance which allowed them to benefit from such an exemption

The Court thus found that the discrimination at issue in the main proceedings was not justified under Article 52 TFEU.

Therefore, the Court foun that Articles 52 and 56 TFEU must be interpreted as precluding legislation of a Member State which subjected winnings from games of chance obtained in casinos in other Member States to income tax and exempts similar income from that tax if it was obtained from casinos in its national territory.

Text of Judgment

Case C-268/13, Petru

2015-01-01T21:05:00.000+01:00

Reimbursement of medical expenses incurred in another Member State cannot be refused where a lack of basic medical supplies and infrastructure makes it impossible to receive hospital treatment in good time

>> Under Regulation (EEC) No 1408/71, a worker may be authorised to travel to another Member State to receive treatment appropriate to his condition, in order to receive the services needed in the same way as if he were insured under the health insurance scheme of that Member State. It is his Member State of residence, however, that reimburses the expenses incurred, that Member State may not refuse authorisation where the treatment required is among the benefits normally provided for under its legislation and where, given the worker’s state of health and the probable course of his disease, the treatment cannot be provided in good time in his Member State.

Ms Petru was a Romanian national who suffered from a serious cardiovascular disease. Her condition required her to be admitted to a specialist establishment in Timișoara, Romania (pictured). During her time in that establishment, Ms Petru found that there was a lack of medication and basic medical supplies, and that the number of beds was insufficient. In view, also, of the complexity of the surgical procedure that she would have to undergo, Ms Petru decided to have her operation in Germany and applied to her health insurance authority to cover the costs of that surgery. The application was refused on the grounds that there was no indication in the general practitioner’s report that the healthcare service sought could not be provided in Romania within a reasonable length of time. Since the cost of the surgery amounted in total to approximately €18 000, Ms Petru applied to the Romanian authorities for reimbursement of that amount. The referring court asked whether the second subparagraph of Article 22(2) of Regulation No 1408/71 must be interpreted as meaning that the authorisation necessary under Article 22(1)(c)(i) of that regulation could not be refused where it was because of a lack of medication and basic medical supplies and infrastructure that the hospital treatment concerned could not be provided in good time in the insured person’s Member State of residence.

The Court first of all stressed that the second subparagraph of Article 22(2) of Regulation No 1408/71 laid down two conditions which, if both were satisfied, rendered mandatory the grant by the competent institution of the prior authorisation applied for on the basis of Article 22(1)(c)(i). The first condition required the treatment in question to be among the benefits provided for by the legislation of the Member State on whose territory the insured person resided. The second condition required that the treatment which the latter planned to receive in a Member State other than that of residence could not be given within the time normally necessary for obtaining the treatment in question in the Member State of residence, account being taken of his current state of health and the probable course of his disease (see Elchinov, C‑173/09, EU:C:2010:581, paras 53 and 54).

As regards the second condition, with which the question in the present case was concerned, the Court reiterated that the authorisation required could not be refused if the same or equally effective treatment could not be given in good time in the Member State of residence of the person concerned. The Court stressed that in order to determine whether treatment which was equally effective for the patient can be obtained in due time in the Member State of residence, the competent institution was required to have regard to all the circumstances of each specific case and to take due account not only of the patient’s medical condition at the time when authorisation was sought and, where appropriate, of the degree of pain or the nature of the patient’s disability which might, for example, make it impossible or extremely difficult for him to carry out a professional activity, but also of his medical history. (see Inizan, C 56/01, EU:C:2003:578, paras. 45 and 60; and Watts, C‑372/04, EU:C:2006:325, on which I wrote this post).

The Court held that one of the circumstances that the competent institution was required to take into account might, in a specific case, be the lack of medication and basic medical supplies and infrastructure, such as that alleged in the main proceedings. Clearly, however, such a lack of medication and of medical supplies and infrastructure could, in the same way as the lack of specific equipment or particular expertise, made it impossible for the same or equally effective treatment to be provided in good time in the Member State of residence. The question whether that was indeed impossible had, according to the Court, be determined, first, by reference to all the hospital establishments in the Member State of residence that are capable of providing the treatment in question and, second, by reference to the period within which the treatment could be obtained in good time.

The Court concluded that the second subparagraph of Article 22(2) of Regulation No 1408/71 must be interpreted as meaning that the authorisation necessary under Article 22(1)(c)(i) of that regulation could not be refused where it is because of a lack of medication and basic medical supplies and infrastructure that the hospital treatment concerned could not be provided in good time in the insured person’s Member State of residence. The question whether that was impossible must be determined by reference to all the hospital establishments in that Member State that were capable of providing the treatment in question and by reference to the period within which the treatment could be obtained in good time. The Court held if the facts alleged by Ms Petru concerning the lack of medication and basic medical supplies and infrastructure at the Institutul de Boli Cardiovasculare in Timișoara were established, it would be for the referring court to determine whether that treatment could have been carried out within three months in another hospital establishment in Romania.

Text of Judgement

Case C‑34/13, Kušionová

2014-12-03T13:45:00.000+01:00

Right to accommodation fundamental right which must be taken into consideration when implementing UTCC Directive

>> The Unfair Terms in Consumer Contracts Directive (UTCC- Directive 93/13) has harmonised the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer.

Mrs Kušionová had concluded a consumer credit agreement with SMART Capital for an amount of €10 000. The loan was secured by a charge on the family home. Subsequently, Mrs Kušionová brought an action for annulment of the credit agreement and the charge agreement against SMART Capital, claiming that the contractual terms binding her to that undertaking were unfair.

The referring court sought to establish whether, in the light of Articles 38 and 47 of the Charter, Directive 93/13 must be interpreted as precluding national legislation which allowed the recovery of a debt that was based on potentially unfair contract terms by the extrajudicial enforcement of a charge on immovable property provided as security by the consumer.

The Court first of all stressed that Article 38 of the Charter provides that European Union policies must ensure a high level of consumer protection. Moreover, Article 47 of the Charter concerned

the right to an effective judicial remedy. The Court held that hose mandatory requirements were applicable to the implementation of Directive 93/13. The Court reiterated the system of protection introduced by Directive 93/13 was based on the idea that the consumer was in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge (see judgments in Pohotovosť, C‑470/12, EU:C:2014:101 and Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, para 22).).

The Court noted that Directive 93/13 was silent as to enforcement of charges. However, it is settled case-law that, in the absence of harmonisation of national mechanisms for enforcement under EU law, it was for the national legal order of each Member State to establish such rules, in accordance with the principles of procedural autonomy, provided, however, that those rules were not less favourable than those governing similar domestic situations (principle of equivalence) and that they did not make it excessively difficult or impossible in practice to exercise the rights conferred by EU law (principle of effectiveness) (see, inter alia, Joined Cases C-222/05 to C-225/05, van de Weerd, on which I wrote this post).

The Court held that as regards the principle of equivalence, it did not have before it any evidence which might raise doubts as to the compliance of the legislation at issue in the main proceedings with that principle.

In previous cases, the Court has already held that every case in which the question arises as to whether a national procedural provision makes the application of EU law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies (see inter alia, Asociación de Consumidores Independientes de Castilla y León, C‑413/12, EU:C:2013:800, para. 34). Moreover, it has held that the specific characteristics of court proceedings which take place under national law between sellers or suppliers and consumers cannot constitute a factor which is liable to affect the legal protection from which consumers must benefit under the provisions of Directive 93/13 (see, to that effect, judgments in Banco Español de Crédito, C‑618/10, EU:C:2012:349, para. 55).

In the present case, the Court thus held that is was necessary to determine, in a situation such as that in the main proceedings, to what extent it was impossible in practice or excessively difficult to apply the protection conferred by that directive. The Court held that the loss of a family home was not only such as to seriously undermine consumer rights, but it also placed the family of the consumer concerned in a particularly vulnerable position (see, to that effect, the Order of the President of the Court in Sánchez Morcillo and Abril García, EU:C:2014:1388, para. 11).

The Court pointed out that the right to accommodation was a fundamental right guaranteed under Article 7 of the Charter that the referring court must take into consideration when implementing Directive 93/13. The Court held that the fact that it was possible for the competent national court to adopt any interim measure would suggest that adequate and effective means existed to prevent the continued use of unfair terms, which was a matter for the referring court to determine.

The Court thus found that Directive 93/13 must be interpreted as not precluding national legislation which allowed the recovery of a debt that was based on potentially unfair contractual terms by the extrajudicial enforcement of a charge on immovable property provided as security by the consumer, in so far as that legislation did not make it excessively difficult or impossible in practice to protect the rights conferred on consumers by that directive, which was a matter for the national court to determine.

Text of judgment

Case C-600/12, Commission v Greece

2014-07-26T00:00:00.002+02:00

Greece infringing EU law by not prohibiting uncontrolled management of landfill site at Natura 2000 site

>> The Waste Framework Directive (Directive 2008/98, herinafter: „ WFD”) requires Member States to take the necessary measures to ensure that waste management is carried out without endangering human health and without harming the environment. Member States are also required to prohibit the abandonment, dumping or uncontrolled management of waste. In addition, all grants of landfill permits are subject to certain condition (on the basis of the landfll Directve (Directive 1999/31)) while the Habitats Directive requires that the effects of projects likely to affect a site significantly must be appropriately assessed by reference to objectives relating to the conservation of habitats and of wild fauna and flora.

National Marine Park of Zakinthos was part of the Natura 2000 network on account of the sea turtles there (Caretta caretta). However, environmental problems caused, since 1999, by landfill operations within the park had had a serious impact on the habitat of those turtles.The waste management plan for the region of the Ionian Islands had, since 2005 (the planned end- of-life date for the landfill site), in fact provided for the construction of a new landfill site in a different location on Zakinthos. In 2005, the Zakinthos Association for the Management of Solid Waste proposed five possible new landfill sites (two of those sites, which were located in a mountainous area, received positive feedback in 2008). However, the Association failed to submit an environmental impact assessment for the construction of the new landfill site. The existing landfill site was still operating in the marine park even though the permits and environmental conditions relating thereto expired in 2006. It was decided that, at the same time that rehabilitation and improvement works were being carried out on the site, the existing landfill would continue to receive waste generated on Zakinthos until the new landfill site begins operating (or until 31 December 2015 when the environmental conditions renewed in 2011 by Ministerial Decree expire).

Taking the view that Greece was in breach of EU environmental legislation, the Commission had brought infringement proceedings before the Court of Justice. Greece had in fact already been found to have infringed EU law by the Court in a case relating to the same species in the same region (see Case C-103/00 Commission v Greece).

The Court held that Member State may not plead practical difficulties, administrative or financial to justify failure to observe obligations and time limits laid down by a directive (see, to that effect, Commission / United Kingdom C -301/10, EU: C: 2012:633).

The Court reiterated that the existence of an infringement must be assessed according to the situation of the Member State as it stood at the end of the deadline set in the reasoned opinion (see Commission / France, C-193/12, EU: C: 2013:394; and Commission / Spain, C-67/12, EU: C: 2014:5). The Court noted that Greece had not taken any steps to meet its obligations under Articles 13 and 36, paragraph 1 of Directive 2008/98, ), 12 and 14 of Directive 1999/31 and 6, paragraph 3, of the Habitats Directive.

The Court reiterated that according to its case-law on the burden of proof in the context of infringement proceedings under Article 258 TFEU, it was for the Commission to establish the existence of alleged breach. So she must provide the Court with the information necessary to verify by it of the existence of such breach (see, to that effect, Commission / Finland, C-335/07, EU: C: 2009:612 and Commission / United Kingdom, EU: C: 2012:633).

The Cour held that where the Commission had provided sufficient evidence, it was for the Member State concerned to challenge in substance and in detail the information produced and the consequences (see stops Commission / Finland, EU: C: 2009:612, and Commission / United Kingdom, EU: C: 2012:633).

The Court held that although Article of the WFD left a certain margin of discretion to the Member States, the discretion had clearly been exceeded considering that the persistence of de facto situation leading to a significant degradation of the environment (see, to that effect, Commission / Italy, EU: C: 2010:115, and Commission / Portugal, EU: C: 2010:331). The Court thus found that Greece had failed to fulfill its obligations under Article 13 of Directive 2008/98.

The Court added that by keeping in operation, on the Island of Zakinthos, an overfull landfill site which was not functioning properly and which did not comply with EU environmental legislation, Greece had also failed to fulfil its obligations under the Land fill Directive. The Court added that by renewing the landfill permit for the site in question without complying with the procedure referred to in Article 6, paragraph 3, of the Habitats Directive, Greece also infringed that Directive.

Text of Judgment

Case C‑338/13, Noorzia

2014-07-25T22:43:00.002+02:00

Requiring minimum age 21 by date of application reunification of spouses not infringing Directive on right to family reunification

>> The Directive on the right to family reunification (Directive 2003/86/EC) lays down the conditions under which third country nationals who reside legally in the territory of a Member State may apply for, among others, their spouse and their children who are minors to join them. Article 4(5) of the Directive permits Member States to fix a minimum age for the purposes of the reunification of spouses, which may not be higher than 21, an age that must be attained by the sponsor and his or her spouse prior to the latter being permitted to join the sponsor for reunification. The Directive does not, however, define the date by reference to which the national authorities must determine whether the minimum age condition is satisfied.

Austrian legislation provided that spouses and registered partners must have reached the age of 21 by the date of lodging an application to be considered eligible for family reunification. The Verwaltungsgerichtshof asks the Court of Justice whether the Directive precludes such a rule. That court was hearing a case brought by an Afghan national whose application to join her Afghan spouse residing in Austria had been refused on the ground that the latter had not yet reached the age of 21 when the application was lodged, albeit that he had reached that age when the refusal decision was taken.

The Court noted by not specifying whether national authorities must, in order to determine whether the minimum age condition was satisfied, consider the matter by reference to the date when the application seeking family reunification was lodged or the date when the application was ruled upon, the EU legislature intended to leave to the Member States a margin of discretion, subject to the requirement not to impair the effectiveness of EU law.

The Court noted that the minimum age fixed by the Member States by virtue of Article 4(5) of Directive 2003/86 ultimately corresponded with the age at which, according to the Member State concerned, a person was presumed to have acquired sufficient maturity not only to refuse to enter into a forced marriage but also to choose voluntarily to move to a different country with his or her spouse, in order to lead a family life with him or her there and to become integrated there.

The Court held that a measure requiring the sponsor and his or her spouse to have attained the prescribed minimum age by the date when the application was lodged did not prevent the exercise of the right to family reunification nor rendered it excessively difficult. The Court furthermore found that such a measure did not undermine the purpose of preventing forced marriages since it permitted the presumption that, due to greater maturity, it would be more difficult to influence the persons concerned to contract a forced marriage and accepted family reunification if they must have reached the age of 21 by the date when the application was lodged than it would be if they were under 21 at that date.

The Court moreover found that taking the date when the application for family reunification was lodged as the point by reference to which it must be determined whether the minimum age condition was satisfied was consistent with the principles of equal treatment and legal certainty.

The Court held that the condition relating to the date of lodging the application made it possible to guarantee that all applicants who were in the same situation chronologically were treated identically, by ensuring that the success of the application depended principally on circumstances attributable to the applicant and not to the administration, such as the length of time taken considering the application.

The Court thus found Article 4(5) of Directive 2003/86 must be interpreted as meaning that that provision did not preclude a rule of national law requiring that spouses and registered partners must have reached the age of 21 by the date when the application seeking to be considered family members entitled to reunification was lodged.

Text of Judgment

Case C-573/12, Ålands Vindkraft

2014-07-15T23:45:00.000+02:00

Swedish support scheme promoting green energy production in national territory compatible with EU law

>> The Renewable Energy Directive (Directive 2009/28) allows Member States to support the production of green energy. Member States which grant benefits to producers are not required to support the use of green energy produced in another Member State.

Swedish legislation provides that green electricity production installations located on the national territory may be awarded electricity certificates. Those certificates may then be sold to electricity suppliers or to certain users, who are under an obligation to hold a certain number (quota) of certificates, corresponding to a proportion of the total quantity of electricity supplied or consumed, failing which they must pay a fee.

Ålands Vindkraft applied for electricity certificates in respect of its wind farm in the Åland archipelago, in Finland. The application was refused on the grounds that only green electricity production installations located in Sweden may be awarded such electricity certificates. Ålands Vindkraft challenged that administrative decision before the Swedish courts, arguing that the principle of the free movement of goods precluded the Swedish electricity certificates scheme.

Whether support system within meaning Directive 2009/28.

The referring court asks whether point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28 must be interpreted as allowing a Member State to establish a support scheme which provides for the award of tradable certificates to producers of green electricity solely in respect of green electricity produced in the territory of that State and which places suppliers and certain electricity users under an obligation to deliver annually to the competent authority a certain number of those certificates, corresponding to a proportion of the total volume of electricity that they had supplied or consumed.

The Court first of ll assessed whether a green electricity support system such as that at issue in the main proceedings constituted a ‘support scheme’ within the meaning of point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28.

The Court found that a support scheme for green electricity production using green certificates, such as that at issue in the main proceedings, had the necessary characteristics to be categorised as a ‘support scheme’ within the meaning of point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28.

The referring court expressed doubts concerning the fact that the support scheme at issue in the main proceedings provided for the award of electricity certificates solely in respect of green electricity produced in the national territory. The Court however held that it was clear that, in adopting Directive 2009/28, the EU legislature left open the possibility of such a territorial limitation.

The Court found that the EU legislature did not intend to require Member States who opted for a support scheme using green certificates to extend that scheme to cover green electricity produced on the territory of another Member State. The Court thus concluded that Directive 2009/28 must be interpreted as allowing a Member State to establish a support scheme, such as that at issue in the main proceedings.

Whether legislation caught by Article 34 TFEU

The referring court also asked whether Article 34 TFEU must be interpreted as meaning that national legislation such as that at issue in the main proceedings constituted a measure having equivalent effect to a quantitative restriction on imports for the purposes of that provision. If so, the referring court asked whether such legislation might nevertheless be justified in the light of its objective of promoting the production of green electricity.

The Court reiterated that, where a matter had been the subject of exhaustive harmonisation at EU level, any national measure relating thereto must be assessed in the light of the provisions of that harmonising measure and not in the light of primary law (see, inter alia, Radlberger Getränkegesellschaft and S. Spitz, C‑309/02, EU:C:2004:799).

The Court thus found that it was necessary to determine whether the harmonisation brought about by Directive 2009/28 ought to be regarded as being of such a kind as to preclude an examination of whether legislation such as that at issue was compatible with Article 34 TFEU. In that regard, it should be noted at the outset that, far from seeking to bring about exhaustive harmonisation of national support schemes for green energy production, the EU legislature — as is apparent, inter alia, from recital 25 to Directive 2009/28 — based its approach on the finding that Member States apply different support schemes and on the principle that it is important to ensure the proper functioning of those schemes in order to maintain investor confidence and to enable those States to define effective national measures in order to achieve their mandatory national overall targets under the directive. The Court that it could not be considered that, in covering that aspect of the territorial scope of national support schemes, the harmonisation brought about by Directive 2009/28 in the field of support schemes was of such a kind as to preclude an examination of their compatibility with Article 34 TFEU.

Whether existence of barrier to trade

The Court stressed that the free movement of goods between Member States was a fundamental principle of the Treaty which found its expression in the prohibition set out in Article 34 TFEU (see, inter alia, Commission v Denmark, C‑192/01, EU:C:2003:492).

Reiterating its famous Dasonville case law, the Court held that in prohibiting between Member States measures having equivalent effect to quantitative restrictions on imports, Article 34 covered any national measure capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (see, inter alia, Dassonville, 8/74, EU:C:1974:82, and PreussenElektra, EU:C:2001:160).

As it is, it must be noted in that regard that the legislation at issue is capable, in various ways, of hindering — at least indirectly and potentially — imports of electricity, especially green electricity, from other Member States.

In the first place, it follows from that legislation that suppliers and certain consumers are required to hold on the annual due date a certain number of electricity certificates for the purposes of meeting their quota obligation, which depends on the total volume of electricity that they supply or consume. However, in the absence, inter alia, of an international agreement to that effect, only certificates awarded under the national scheme could be used to meet that obligation. Accordingly, those suppliers and consumers were as a rule required, on the basis of the electricity that they import, to purchase such certificates, failing which they had to pay a specific fee.Such measures were thus capable of impeding electricity imports from other Member States (see, inter alia, by analogy, Ligur Carni and Others, C‑277/91, C‑318/91 and C‑319/91, EU:C:1993:927).

In the second place, the referring court noted both in its order and in its questions that, although green electricity producers might, in the context of the support scheme established by the legislation at issue in the main proceedings, trade their electricity certificates on an open, competitive market that was dedicated to that trade, there was nothing in that legislation to stop the producers from selling those certificates together with the electricity that they produced, as a package.The existence of such a possibility seemed capable in practice of facilitating the opening of negotiations and the establishment of contractual relationships — in some cases, on a long-term basis — concerning the supply of national electricity by those producers to suppliers or electricity users, the latter being able to obtain, in that way, both the electricity and the green certificates that they needed in order to meet their quota obligation. The Court thus found that, to that extent also, the effect of the support scheme at issue in the main proceedings was, at least potentially, to curb electricity imports from other Member States (see, to that effect, Commission v Ireland, 249/81, EU:C:1982:402).

In that context, the Court noted that failure by a Member State to adopt adequate measures to prevent barriers to the free movement of goods that had been created, in particular, through the actions of traders but made possible by specific legislation that that State had introduced, is just as likely to obstruct intra-Community trade as is a positive act (see Commission v France, C‑265/95, EU:C:1997:595, and Schmidberger, C‑112/00, EU:C:2003:333, paragraph 58).

The Court thus concluded that t legislation such as that at issue in the main proceedings was capable of impeding imports of electricity, especially green electricity, from other Member States and that, in consequence, it constituted a measure having equivalent effect to quantitative restrictions on imports, in principle incompatible with the obligations under EU law resulting from Article 34 TFEU, unless that legislation could be objectively justified (see, to that effect, inter alia, Commission v Austria, C‑320/03, EU:C:2005:684).

Whether a possible justification
The Court stressed that national legislation or a national practice that constituted a measure having equivalent effect to quantitative restrictions might be justified on one of the public interest grounds listed in Article 36 TFEU or by overriding requirements. In either case, the national provision must, in accordance with the principle of proportionality, be appropriate for ensuring attainment of the objective pursued and must not go beyond what is necessary in order to attain that objective (see, inter alia, Commission v Austria, C‑524/07, EU:C:2008:717).

1. The objective of promoting the use of renewable energy sources

According to settled case-law, national measures that are capable of hindering intra-Community trade may inter alia be justified by overriding requirements relating to protection of the environment (see, to that effect, Commission v Austria, EU:C:2008:717, paragraph 57 and the case-law cited).

In the present case, the Court noted that the use of renewable energy sources for the production of electricity, which legislation such as that at issue in the main proceedings sought to promote, was useful for the protection of the environment inasmuch as it contributed to the reduction in greenhouse gas emissions. The Court stressed that the the increase in the use of renewable energy sources constituted one of the important components of the package of measures needed to reduce greenhouse gas emissions and to comply with the Kyoto Protocol to the United Nations Framework Convention on Climate Change, and with other Community and international greenhouse gas emission reduction commitments beyond the year 2012.

The Court found that the objective of promoting the use of renewable energy sources for the production of electricity, such as the objective pursued by the legislation at issue in the main proceedings, was in principle capable of justifying barriers to the free movement of goods.

2. Proportionality

The Court held the by its very nature, a scheme such as in the present case required for its proper functioning market mechanisms that were capable of enabling traders — who were subject to the quota obligation and who did not yet possess the certificates required to discharge that obligation — to obtain certificates effectively and under fair terms. The Court stressed that it was therefore important that mechanisms be established which ensured the creation of a genuine market for certificates in which supply could match demand, reaching some kind of balance, so that it was actually possible for the relevant suppliers and users to obtain certificates under fair terms.

According to the findings of the referring court, the green certificates were actually sold, in the Member State concerned, on a market that was open to competition and, accordingly, the price of those certificates was determined by the interplay of supply and demand.

The Court held that provided that there was a market for green certificates which actually met the conditions set out above and on which traders who had imported electricity from other Member States were genuinely able to obtain certificates under fair terms, the fact that the national legislation at issue in the main proceedings did not prohibit producers of green electricity from selling to traders under the quota obligation both the electricity and the certificates did not mean that the legislation went beyond what was necessary to attain the objective of increasing the production of green electricity. The fact that such a possibility remains open appeared to be an additional incentive for producers to increase their production of green electricity.

The Court thus concluded that Article 34 TFEU must be interpreted as not precluding national legislation which provided for the award of tradable certificates to green electricity producers solely in respect of green electricity produced in the territory of the Member State concerned and which places suppliers and certain electricity users under an obligation to surrender annually to the competent authority a certain number of those certificates, corresponding to a proportion of the total volume of electricity that they had supplied or used, failing which they must pay a specific fee.

Text of Judgment

Joined Cases C-362, 363 and 407/13

2014-07-13T06:50:00.000+02:00

Italian seafarers legislation complying with principles of EU law

>> The Italian Navigation Code of Italy set the maximum duration of fixed-term contracts of seafarers ar at one year. The code also required the start date and the duration of the contract to be specified, that every contract concluded for a period exceeding one year was converted into a contract of indefinite duration, and that, if several contracts were concluded for a fixed term or for specified voyages, the employment was considered to be continuous where no more than 60 days elapsed between two contracts.

The EU Framework Agreement (Directive 1999/70) lays down the general principles and minimum requirements relating to fixed-term work. Last year, the Court held in the Della Rocca case that the Framework Agreement did not apply to temporary workers (see, EU:C:2013:235).

In the present case, the referring court asked whether the Framework Agreement must be interpreted as meaning that it applied to workers, such as the appellants in the main proceedings, who were employed as seafarers under fixed-term employment contracts on ferries making sea crossings between two ports situated in the same Member State. If that was indeed the case, the referring Court asked whether the provisions of the Framework Agreement, in particular Clause 3(1) thereof, must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which provided that fixed-term employment contracts had to indicate their duration, but not their termination date.

The Court of Justice first of all recalled that the Framework Agreement covers generally ‘fixed-term workers who had an employment contract or employment relationship as defined in law, collective agreements or practice in each Member State’ (Article 2 of the Framework Agreement, see also: Adeneler and Others, C-212/04, EU:C:2006:443; Della Rocca, C-290/12, EU:C:2013:235,; and Márquez Samohano, C-190/13, EU:C:2014:146). The Court held that e Framework Agreement applied to all workers providing remunerated services in the context of a fixed-term employment relationship linking them with their employer (Del Cerro Alonso, C-307/05, EU:C:2007:509; Gavieiro Gavieiro and Iglesias Torres, C‑444/09 and C‑456/09, EU:C:2010:819; and the order in Montoya Medina, C‑273/10, EU:C:2011:167).

The Court however added that the scope of the Framework Agreement was not unlimited, as the definition of the contracts and employment relationships to which it applied were not determined by that agreement or by EU law, but by national law and/or practice, so long as those concepts were not defined in a manner that resulted in the arbitrary exclusion of a category of persons from the benefit of the protection provided by the Framework Agreement (see Sibilio, C‑157/11, EU:C:2012:148). The Court reiterated that the agreement did not apply to temporary workers.

Nevertheless, the Court in the present case held that seafarers employed under fixed-term employment contracts on ferries making crossings between two ports within the same Member State, fell within the scope of the Framework Agreement. The Court pointed out that Framework Agreement made it possible for Member States, when implementing the agreement, to take account of the needs of specific sectors and/or categories of workers involved, provided that that was justified on objective grounds (Marrosu and Sardino, C-53/04, EU:C:2006:517, and Kücük, C‑586/10, EU:C:2012:39).

The Court reiterated that the Framework Agreement was not intended to harmonise all national rules relating to fixed-term employment contracts but simply aimed, by determining general principles and minimum requirements, to establish a general framework for ensuring equal treatment for fixed-term workers by protecting them against discrimination and to prevent abuse arising from the use of successive fixed-term work agreements or contracts (see: Impact, C‑268/06, EU:C:2008:223, on which I write this post; Huet, C‑251/11, EU:C:2012:133,; and the order in Vino, C‑20/10, EU:C:2010:677).

The Court held that Clause 3(1) of the Framework Agreement defined the concept of ‘fixed-term worker’ and, in that context, set out the central characteristic of a fixed-term contract, namely the fact that the end of such a contract was determined ‘by objective conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event’. However, that clause did not impose any obligation on Member States in respect of the rules of national law applicable to the conclusion of fixed-term employment contracts.

The Court held that the Framework Agreement did not lay down a general obligation on the Member States to provide for the conversion of fixed-term employment contracts into contracts of indefinite duration. Indeed, Clause 5(2) of the Framework Agreement in principle left it to the Member States to determine the conditions under which fixed-term employment contracts or relationships were to be regarded as contracts or relationships of indefinite duration. It followed that the Framework Agreement did not specify the conditions under which contracts of indefinite duration might be used.

The Court concluded that Clause 5 of the Framework Agreement must be interpreted as meaning that it did not preclude, in principle, national legislation, such as that at issue in the main proceedings, which provided for the conversion of fixed-term employment contracts into employment contracts of indefinite duration only in circumstances where the worker concerned had been employed continuously under such contracts by the same employer for a period longer than one year, the employment relationship being considered to be continuous where the fixed-term employment contracts were separated by time lapses of less than or equal to 60 days. It was, however, for the referring court to satisfy itself that the conditions of application and the effective implementation of that legislation resulted in a measure that was adequate to prevent and punish the misuse of successive fixed-term employment contracts or relationships.

Text of Judgement

Case C-76/13, Commission v. Portugal

2014-06-30T21:48:00.001+02:00

Court taking into account financial crisis when setting amount penalty payment Portugal

>> Portugal Telecom (PTC, HQ pictured) is the largest telecommunications operator in Portugal and
also operates in numerous other countries such as Brazil. In 1995 the Portuguese Government granted it the exclusive right to operate the public telecommunications service. In principle, it was granted that right until that activity was liberalised in accordance with EU law.

The Universal Service Directive (Directive 2002/22) adopted in 2002, provides that every Member State is to designate the undertakings that are to provide the universal service while observing the principles of objectivity, transparency, non-discrimination and proportionality. That directive was to be transposed by the Member States by 24 July 2003. However, after 2003 PTC continued to be the exclusive provider, reason for which the European Commission in 2005 initiated the pre-litigation procedure and in 2009, brought infringement proceedings against Portugal before the Court of Justice. In 2010, the Court held that Portugal had failed to transpose correctly the provisions of the Universal Service Directive and to ensure that those provisions were in practice applied.

In 2013, the Commission decided to bring new infringement proceedings, since the concession contract concluded with PTC was still in force. In fact, it was not until October 2012 that Portugal had launched the tendering procedure for the selection of the universal service providers. Furthermore, the new legislation to repeal the legislation incompatible with EU law would not enter into force until 1 June 2014. Moreoever, termination of the contract concluded with PTC was not provided for before 2025.

The Commission argued that Portugal should be ordered to make a penalty payment of €43 500 for every day of delay in complying with the judgment of 2010 and to pay a fixed-rate sum of €5 000 for every day from the date of delivery of the judgment of 2010 until the date of Portugal’s compliance with that judgment or the date on which the Court delivers judgment in the new infringement proceedings.

The Court agreed that it was appropriate to order Portugal to pay a lump sum and to make a penalty payment. The Court also found that the duration of the infringement, which was nearly three and a half years, including 28 months’ delay in complying with the 2010 judgment, was excessive.The Court stressed the seriousness of the infringement, emphasising not only that the failure to transpose a Directive was an obstacle to the proper functioning of the internal market, but also that the failure to comply with the judgment of 2010 had adverse consequences for both private interests - the competitors of PTC - and public interests - those of the end-users.

With regard to the lump sum, the Court observed that the failure to comply with the judgment of 2010 has prejudiced private and public interests. In addition, it emphasised that the concession contract under which PTC was to be the provider of the universal service until 2025 was approved on 17 February 2003, after the directive had entered into force, and that the Member States were required to transpose that directive into national law by 24 July 2003 at the latest. The Court has found that these matters make it necessary to adopt a deterrent measure, such as an order to pay a lump sum.

Nevertheless, the Court also found that - next to the fact that tendering procedures were launched in October 2012 - Portugal’s ability to pay had been reduced in the context of the economic crisis. The Court stressed that a penalty payment had to be an appropriate financial means of ensuring full compliance with the judgment concerned. However, it found that the sum proposed by the Commission would not be proportionate.

The Court found that it was proportionate to order Portugal to pay a lump sum of €3 million and also to make a penalty payment of €10 000 for every day of delay in implementing the measures necessary in order to comply with the 2010 judgment.

Text of Judgment

Case C‑156/13, Digibet and Albers v Westdeutsche Lotterie

2014-06-17T23:10:00.000+02:00

Schleswig - Holstein could tempo temporarily allow games of chance without infringing EU law.

>> German legislation prohibitted the organisation and facilitation of games of chance on the Internet and the advertising of games of chance on television, the Internet and via telecommunications networks. However, the use of the Internet for those purposes may be authorized in exceptional circumstances for lotteries and sporting bets, the aim of which is to combat the development and spread of illegal gaming. For this reason, Schleswig - Holstein authorized the organisation and facilitation of games on chance on the Internet from 1 January 2012 until 8 February 2013. That authorisation was granted to any person who, in the EU, was able to demonstrate that it complied with certain conditions. Even though this legislative exception had now been repealed, authorisations issued to operators of games of chance on the Internet remained valid for a transitional period of several years.

Digibet is authorised to organise games of chance under a licence issued by the authorities in Gibraltar. Thus, it offers games of chance and sports betting in German via its Internet site ‘digibet.com’. Following an action brought by the Westdeutsche Lotterie (a public lottery company

in North Rhine - Westphalia) a German court ordered Digibet and its managing director Mr Albers to cease to offer the possibility of playing games of chance via the Internet to persons in Germany. Digibet and Mr Albers challenged that judgment before the referring Court, which asked whether Article 56 TFEU must be interpreted as meaning that it precluded legislation common to the majority of federal entities of a Member State having a federal structure which prohibited, in principle, the organisation and facilitation of games of chance via the internet, where, for a limited period, a single federal entity maintained in force more liberal legislation coexisting with the restrictive legislation of the other federal entities and that that entity issued authorisations to operators in order to supply games on the internet which remained valid for a transitional period after the repeal of that more liberal legislation.

Interestingly, Digibet and Mr Albers inter alia relied on the famous Winner Wetten case (Case C-409/06 Winner Wetten (EU:C:2010:503), according to which rules of national law, even of a constitutional order, cannot be allowed to undermine the unity and effectiveness of EU law.

The Court first of all reiterated that it was not disputed that legislation of a Member State such as that at issue in the main proceedings constituted a restriction on the freedom to provide services guaranteed by Article 56 TFEU (see Joined Cases C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07 Stoß and Others EU:C:2010:504).

The Court held that it was necessary, however, to determine whether such a restriction might be allowed as a derogation, on grounds of public policy, public security or public health, as expressly provided for under Articles 51 TFEU and Article 52 TFEU, which were applicable in the area of freedom to provide services by virtue of Article 62 TFEU, or justified, in accordance with the case-law of the Court, by overriding reasons in the public interest. The Court has consistently held that restrictions on betting and gaming might be justified by overriding requirements in the public interest, such as consumer protection and the prevention of both fraud and incitement to squander money on gambling (see Joined Cases C‑186/11 and C‑209/11 Stanleybet International and Others EU:C:2013:33, on which I wrote this post).

In that context, the Court has repeatedly stated that the legislation on games of chance is one of the areas in which there are significant moral, religious and cultural differences between the Member States. In the absence of harmonisation in the field at EU level, it is for each Member State to determine in those areas, in accordance with its own scale of values, what is required in order to ensure that the interests in question are protected the identification of the objectives which are in fact pursued by the national legislation falls, in the context of a case referred to the Court under Article 267 TFEU, within the jurisdiction of the national court (see e.g., Case C-347/09 Dickinger and Ömer EU:C:2011:582, on which I wrote this post).

The referring court asked however about the requirement that restrictions imposed by the Member States must satisfy the conditions of proportionality and non-discrimination which applied to them, as laid down in the case-law of the Court of Justice and, in particular, the condition according to which national legislation is appropriate for ensuring attainment of the objective pursued only if it genuinely reflected a concern to attain it in a consistent and systematic manner. The referring court therefore wishes to know whether the proportionality and consistency of the restrictive legislation at issue in the main proceedings, seen as a whole, is called into question given the existence, for a limited period, of more liberal legislation only in the Land Schleswig-Holstein.

The Court of Justice in that regard stressed the particular nature of the gambling, where, unlike the establishment of free, undistorted competition in a traditional market, the presence of that kind of competition in the very specific market of games of chance was liable to have a detrimental effect owing to the fact that those operators would be led to compete with each other in inventiveness in making what they offered more attractive than their competitors and, in that way, increasing consumers’ expenditure on gaming and the risks of their addiction.

Therefore, national authorities enjoyed a wide measure of discretion which enabled them to determine what was required in order to ensure consumer protection and the preservation of order in society and — provided that the conditions laid down in the Court’s case-law are in fact met — it was for each Member State to assess whether, in the context of the legitimate aims which it pursued, it was necessary to prohibit, wholly or in part, betting and gaming or only to restrict them and, to that end, to lay down more or less strict supervisory rules.

Next, it should be recalled that, when provisions of the Treaties or of regulations conferred powers or impose obligations upon the Member States for the purposes of the implementation of EU law, the question of how the exercise of such powers and the fulfilment of such obligations might be entrusted by Member States to specific national bodies was solely a matter for the constitutional system of each State (Case C-428/07 Horvath, EU:C:2009:458, paragraph 49).

The Court added that in the present case, the division of competences between the Länder could not be called into question, since it benefitted from the protection conferred by Article 4(2) TEU, according to which the Union must respect national identities, inherent in their fundamental structures, political and constitutional, including regional and local self-government. The Court added that even assuming that the existence of legislation of one Land, which was more liberal than that in force in the other Länder, might damage the consistency of the legislation at issue as a whole, it must be observed that, in the circumstances of the case in the main proceedings, such damage to consistency was limited ratione temporis and ratione loci to a single Land. Therefore, it could according to the Court not be argued that the derogating legal situation in one Land seriously affected the appropriateness of the restrictions on games of chance applicable in all the other Länder to achieve the legitimate public interest objectives that they pursued.

The Court also took into account that the more liberal legislation on games of chance adopted by the Land Schleswig-Holstein was in force from 1 January 2012 until 8 February 2013. After that date, that Land applied the more restrictive rules already in force in the other Länder.

In those circumstances, the Court found that the restriction on the freedom to provide services constituted by the legislation on games of chance at issue in the main proceedings was capable of satisfying the requirements of proportionality as laid down in the case-law of the Court.

Text of Judgment

Case C‑184/11, Commission v Spain

2014-05-24T07:28:00.000+02:00

Spain ordered to pay a lump sum of €30 million for having failed to adopt all the measures necessary to recover unlawful State aid granted by provinces of Basque Country.

>> In the 1990’s, Álava, Vizcaya and Guipúzcoa (the three provinces of the Basque Country) granted State aid to certain undertakings in the form of a reduction in the tax base and a 45% tax credit for investments. In 2001, the Commission found that aid to be incompatible with the internal market and ordered Spain to take all necessary measures to recover the aid from the recipients. Finding that not all the aid had been recovered, in 2003 the Commission brought actions for failure to fulfil obligations before the Court of Justice. By judgment of 14 December 2006, the Court held that Spain had failed to fulfil its obligation to adopt all the measures necessary to comply with the Commission decisions (C-485/03, Commission v Spain).

Since it considered that Spain had not fully complied with the 2006 judgment, in 2011 the Commission decided to bring a new action for failure to fulfil obligations. The Commission was of the view that the amounts not yet recovered when the action was brought represented approximately 87% of the total of the unlawful aid to be recovered. Subsequently, the Commission found that Spain had fully complied with the 2006 judgment during the proceedings before the Court, so it withdrew its application for an order for a periodic penalty payment while maintaining its application for an order for payment of a lump sum.

The Court first of all held that in order to determine whether Spain adopted all the necessary measures to comply with the judgment in Commission v Spain EU:C:2006:777, it must be ascertained whether the amounts of the unlawful aid at issue were repaid by the recipient undertakings.The Court reiterated that the reference date for the assessment of whether there had been a failure to fulfil obligations was the date of expiry of the period prescribed in the reasoned opinion issued under Article 228(2) EC (see Case C‑304/02 Commission v France).

Since the FEU Treaty abolished the reasoned opinion stage in infringement proceedings under Article 260(2) TFEU, the reference date for assessing whether there had been an infringement for the purpose of Article 260 TFEU was the date of expiry of the period prescribed in the letter of formal notice issued in accordance with the first subparagraph of Article 260(2) (Case C‑610/10 Commission v Spain and Case C‑576/11 Commission v Luxembourg).The Court however held that where the proceedings for failure to fulfil obligations had been brought on the basis of Article 228(2) EC and a reasoned opinion had been issued before the date of entry into force of the Treaty of Lisbon, namely 1 December 2009, the reference date was the date of expiry of the period prescribed in the reasoned opinion (see Case C‑533/11 Commission v Belgium).

It followed that, given that, in the present case, the Commission issued the reasoned opinion on 26 June 2008, the reference date for the assessment of whether there had been a failure to fulfil obligations was the date of expiry of the period prescribed in that reasoned opinion, namely 27 August 2008.

The Court held that although Spain had put forward various arguments in connection with the amount of the unlawful aid at issue to be recovered or which had actually been recovered, it was clear from the written statements given in response to the questions put by the Court and the details given at the hearing that Spain accepted that, although all those arguments were admissible and well founded, a substantial part of the aid to be recovered in order to comply with the judgment in Commission v Spain had not been recovered at the expiry of the period prescribed by the Commission in the reasoned opinion.

According to the Court, Spain could not therefore reasonably argue that, within that period, it took all the measures necessary in order successfully to recover the unlawful aid at issue. The Court thus found that, by failing to take, by the date on which the period prescribed in the reasoned opinion issued by the Commission on 26 June 2008 expired, all the measures necessary to comply with the judgment in Commission v Spain, Spain had failed to fulfil its obligations under Article 260(1) TFEU.

The Court found that it was for the Court, in each case, in the light of the circumstances of the case before it and the degree of persuasion and deterrence which appeared to it to be required, to determine the financial penalties appropriate, such as an order for payment of a lump sum, in particular for preventing similar infringements of EU law from recurring (see: Case C‑121/07 Commission v France, and Case C‑279/11 Commission v Ireland).

The Court reiterated that an order to pay a lump sum was based essentially on the assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach had persisted for a long period after the judgment initially establishing it was delivered (Case C‑241/11 Commission v Czech Republic).

The Court held that the imposition of a lump sum payment must depend in each individual case on all the relevant factors relating both to the characteristics of the infringement established and to the conduct of the Member State involved in the procedure initiated under Article 260 TFEU. The Court added that that provision conferred a wide discretion on the Court in deciding whether or not to impose such a penalty.

The Court reiterated that the Member State concerned must actually recover the sums owed, belated recovery after the prescribed time-limits have expired not satisfying the requirements of the EC Treaty (see Case C‑496/09 Commission v Italy). The Court held that if a Member State encountered unforeseen or unforeseeable difficulties or perceives consequences overlooked by the Commission, it must submit those problems for consideration by the Commission together with proposals for suitable amendments to the decision in question (Case C‑354/10 Commission v Greece EU and Case C‑411/12 Commission v Italy), which had not occurred in the present case. The Court find that the infringement of which Spain was accused lasted for a considerable period which in any event had no relation to the difficulties in recovering the aid paid under schemes that had been declared unlawful and incompatible with the internal market.

The Court added that in the present case, the unlawful aid in question was particularly harmful to competition because of its large amount and the unusually large number of recipients regardless of the economic sector of the recipients. The Court held that where a Member State repeatedly engaged in unlawful conduct in such a manner in a specific sector governed by EU rules, this might be an indication that effective prevention of future repetition of similar infringements of EU law might require the adoption of a dissuasive measure, such as a lump sum payment The Court therefore considered that it was justifiable in the present case to order Spain to pay a lump sum.

Text of Judgment

Case C‑43/12, Commission v. Parliament and Council

2014-05-20T23:45:00.000+02:00

Court annuls directive on exchange of information on eight road safety related traffic offenses

>> In 2008, the European Commission submitted to the Parliament and the Council a proposal for a directive seeking, in essence, to facilitate the exchange of information concerning certain road traffic offences and the cross-border enforcement of the sanctions attached to them. That proposal was based on Article 71(1) EC, now Article 91(1)(c) TFEU, which regulates the powers of the European in relation to transport safety. On 25 October 2011, the Parliament and the Council adopted Directive 2011/822, using however as a legal basis Article 87(2) TFEU, the EU’s competence in the field of police cooperation. Taking the view that the directive had been adopted on the incorrect legal basis, the Commission brought annulment proceedings before the Court of Justice.

In short, Directive 2011/822 sets up a procedure for the exchange of information between Member States in relation to eight road traffic offences (speeding, non-use of a seat-belt, failing to stop at a red traffic light, drink-driving, driving under the influence of drugs, failing to wear a crash helmet, use of a forbidden lane and illegally using a mobile telephone). The Member States may thus access each other's national data concerning vehicle registration in order to determine the person liable for the offence.

The Court first of all reiterated that, the choice of legal basis for a European Union measure must rest on objective factors that were amenable to judicial review; these included the aim and content of that measure (see e.g. Case C‑411/06 Commission v Parliament and Council EU, and Case C‑130/10 Parliament v Council).

The Court added that if examination of the measure concerned revealed that it pursued a twofold purpose or that it had a twofold component and if one of those was identifiable as the main or predominant purpose or component, whereas the other was merely incidental, that measure must be based on a single legal basis, namely that required by the main or predominant purpose or component (see e.g. Case C‑137/12 Commission v Council).

The Court thus found that in order to assess whether the present action was well founded, both the aim and the content of Directive 2011/82 must therefore be examined, in order to determine whether that directive could have been validly adopted — as contended by the Council and the Parliament — on the basis of Article 87(2) TFEU rather than on the basis of Article 91(1)(c) TFEU, which was relied on by the Commission as the appropriate legal basis.

The Court found that the system of information exchange as laid down in the Directive might increase deterrence in relation to road traffic offences and induce more cautious behaviour by the driver of a vehicle that was registered in a Member State other than the Member State of the offence, thereby helping to reduce the number of casualties due to road traffic accidents.

The Court thus held that the main aim of Directive 2011/82 was to improve road safety which, as stated in recital 1 in the preamble to that directive, was a prime objective of the European Union’s transport policy.

With regard to the content of Directive 2011/82, the Court found that the system for the exchange of information between the competent authorities of the Member States set up by the directive provided the means of pursuing the objective of improving road safety and enabled the European Union to attain that aim.
The Court thus concluded that since, both in respect of its aims and its content, Directive 2011/82 was a measure to improve transport safety within the meaning of Article 91(1)(c) TFEU, it should have been adopted on the basis of that provision. Thus, since the action was well founded, Directive 2011/82 was annulled.

The Court however found that there were important grounds of legal certainty why the Court should maintain the effects of that directive until the entry into force, within a reasonable period of time — which might not exceed twelve months as from the date of delivery of the present judgment — of a new directive based on the correct legal basis - Article 91(1)(c) of the TFEU.

Text of Judgment

Case C-209/13, UK v. Council

2014-05-14T00:50:00.000+02:00

Court dismisses action brought by the United Kingdom against the decision authorising eleven Member States to establish enhanced cooperation to set up a financial transaction tax

>> The United Kingdom asked the Court of Justice to annul Council Decision 2013/52/EU of 22 January 2013, which authorized eleven Member States to use the enhanced cooperation procedure to set up a financial transaction tax (‚FTT’).

That decision was adopted when it was clear that an FTT could not obtain unanimous support within the Council in the foreseeable future.

While recognising that its action, brought as a precautionary measure, could be considered to be premature, the United Kingdom relied on two pleas in law in support of its action. The first plea concerned a claimed infringement of Article 327 TFEU and of customary international law in so far as the contested decision authorized the adoption of an FTT which produced extraterritorial effects. The second plea, relied on in the alternative, related to a claimed infringement of Article 332 TFEU in that that decision authorized the adoption of an FTT which would impose costs on Member States which were not participating in the enhanced cooperation.

The Court first of all, with regard to the matter of admissibility, recalled that, under Article 120(c) of the Rules of Procedure and the case-law relating thereto, an application initiating proceedings must state the subject-matter of the dispute and a summary of the pleas in law on which the application was based. That statement must be sufficiently clear and precise to enable the defendant to prepare his defence and the Court to rule on the application. It was therefore necessary for the essential points of law and of fact on which a case was based to be indicated coherently and intelligibly in the application itself and for the heads of claim to be set out unambiguously so that the Court did not rule ultra petita or fail to rule on a claim (Case C‑360/11 Commission v Spain and Case C‑545/10 Commission v Czech Republic).
The Court held that in this case, the content of the application satisfied those requirements of clarity and precision. It enabled the Council and the Member States intervening in its support to prepare their arguments in relation to the pleas relied on by the United Kingdom and it put the Court in a position to carry out its review of the contested decision.

The Court added that in the context of an action for the annulment of a Council decision which, like the contested decision, had as its subject-matter the authorisation of enhanced cooperation on the basis of Article 329 TFEU, the Court’s review was related to the issue of whether that decision was valid as such in the light of, inter alia, the provisions, contained in Article 20 TEU and in Articles 326 TFEU to 334 TFEU, which defined the substantive and procedural conditions relating to the granting of such authorisation. The Court held that that review should not be confused with the review which might be undertaken, in the context of a subsequent action for annulment, of a measure adopted for the purposes of the implementation of the authorised enhanced cooperation.

The Court pointed out that the objective of the contested decision was to authorise 11 Member States to establish enhanced cooperation between themselves in the area of the establishment of a common system of FTT with due regard to the relevant provisions of the Treaties. The principles of taxation challenged by the United Kingdom were, according to the Court, not in any way constituent elements of that decision. First, ‘the counterparty principle’ corresponded to an element in the 2011 proposal mentioned in recital 6 of that decision. Second, the ‘issuance principle’ first appeared in the 2013 proposal.

As regards the action’s second plea in law, the Court held that the contested decision contained no provision related to the issue of expenditure linked to the implementation of the enhanced cooperation authorised by that decision. Further, and irrespective of whether the concept of ‘expenditure resulting from implementation of enhanced cooperation’, within the meaning of Article 332 TFEU, did or did not cover the costs of mutual assistance and administrative cooperation referred to by the United Kingdom in its second plea, was is obvious that the question of the possible effects of the future FTT on the administrative costs of the non-participating Member States could not be examined for as long as the principles of taxation in respect of that tax had not been definitively established as part of the implementation of the enhanced cooperation authorised by the contested decision. The Court added that those effects were dependent on the adoption of ‘the counterparty principle’ and the ‘issuance principle’, which were however, as mentioned, not constituent elements of the contested decision.

Text of judgment

Joined Cases C‑293/12 and C‑594/12

2014-05-07T02:12:00.000+02:00

Court declares Data Retention Directive to be invalid

The main objective of the Data Retention Directive (Directive 2006/24) was to harmonise Member States’ provisions concerning the retention of certain data which were generated or processed by providers of publicly available electronic communications services or of public communications networks. It therefore sought to ensure that the data were available for the purpose of the prevention, investigation, detection and prosecution of serious crime, such as, in particular, organised crime and terrorism. The directive for this reason provided that the providers must retain traffic and location data as well as related data necessary to identify the subscriber or user. By contrast, it did not permit the retention of the content of the communication or of information consulted.

The Irish High Courtand the Austrian Verfassungsgerichtshof (Constitutional Court) asked the Court to examine the validity of Directive 2006/24 in the light of Articles 7, 8 and 11 of the Charter of Fundamental Rights.

The Court first of all pointed out that it followed from Article 1 and recitals 4, 5, 7 to 11, 21 and 22 of Directive 2006/24 that the main objective of that directive was to harmonise Member States’ provisions concerning the retention, by providers of publicly available electronic communications services or of public communications networks, of certain data which were generated or processed by them, in order to ensure that the data were available for the purpose of the prevention, investigation, detection and prosecution of serious crime, such as organised crime and terrorism, in compliance with the rights laid down in Articles 7 and 8 of the Charter.

The Court however added that the obligation, under Article 3 of Directive 2006/24, on providers of publicly available electronic communications services or of public communications networks to retain the data listed in Article 5 of the directive for the purpose of making them accessible, if necessary, to the competent national authorities raised questions relating to respect for private life and communications under Article 7 of the Charter, the protection of personal data under Article 8 of the Charter and respect for freedom of expression under Article 11 of the Charter.

The Court found that even though, as is apparent from Article 1(2) and Article 5(2) of Directive 2006/24, the directive did not permit the retention of the content of the communication or of information consulted using an electronic communications network, it was not inconceivable that the retention of the data in question might have an effect on the use, by subscribers or registered users, of the means of communication covered by that directive and, consequently, on their exercise of the freedom of expression guaranteed by Article 11 of the Charter.

The Court held that the retention of data for the purpose of possible access to them by the competent national authorities, as provided for by Directive 2006/24, directly and specifically affected private life and, consequently, the rights guaranteed by Article 7 of the Charter. Furthermore, according to the Court, such a retention of data also fell under Article 8 of the Charter because it constituted the processing of personal data within the meaning of that article and, therefore, necessarily had to satisfy the data protection requirements arising from that article (see: Cases C‑92/09 and C‑93/09 Volker und Markus Schecke and Eifert).

The Court held that by requiring the retention of the data listed in Article 5(1) of Directive 2006/24 and by allowing the competent national authorities to access those data, Directive 2006/24 derogated from the system of protection of the right to privacy established by Directives 95/46 and 2002/58 with regard to the processing of personal data in the electronic communications sector, directives which provided for the confidentiality of communications and of traffic data as well as the obligation to erase or make those data anonymous where they were no longer needed for the purpose of the transmission of a communication, unless they were necessary for billing purposes and only for as long as so necessary.

The Court added in order to establish the existence of an interference with the fundamental right to privacy, it did not matter whether the information on the private lives concerned was sensitive or whether the persons concerned had been inconvenienced in any way (see, to that effect, Cases C‑465/00, C‑138/01 and C‑139/01 Österreichischer Rundfunk and Others).

The Court thus held that the obligation imposed by Articles 3 and 6 of Directive 2006/24 on providers of publicly available electronic communications services or of public communications networks to retain, for a certain period, data relating to a person’s private life and to his communications, such as those referred to in Article 5 of the directive, constituted in itself an interference with the rights guaranteed by Article 7 of the Charter.

Furthermore, the access of the competent national authorities to the data constituted a further interference with that fundamental right (see, as regards Article 8 of the ECHR, Eur. Court H.R., Leander v. Sweden, 26 March 1987, § 48, Series A no 116; Rotaru v. Romania [GC], no. 28341/95, § 46, ECHR 2000-V; and Weber and Saravia v. Germany (dec.), no. 54934/00, § 79, ECHR 2006-XI). Accordingly, Articles 4 and 8 of Directive 2006/24 laying down rules relating to the access of the competent national authorities to the data also constituted an interference with the rights guaranteed by Article 7 of the Charter. Likewise, Directive 2006/24 constituted an interference with the fundamental right to the protection of personal data guaranteed by Article 8 of the Charter because it provided for the processing of personal data.

The Court pointed out Article 52(1) of the Charter provides that any limitation on the exercise of the rights and freedoms laid down by the Charter must be provided for by law, respect their essence and, subject to the principle of proportionality, limitations may be made to those rights and freedoms only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.

The Court held that so far as concerns the essence of the fundamental right to privacy and the other rights laid down in Article 7 of the Charter, it must be held that, even though the retention of data required by Directive 2006/24 constituted a particularly serious interference with those rights, it was not such as to adversely affect the essence of those rights given that, as followed from Article 1(2) of the directive, the directive did not permit the acquisition of knowledge of the content of the electronic communications as such. Nor was that retention of data such as to adversely affect the essence of the fundamental right to the protection of personal data enshrined in Article 8 of the Charter, because Article 7 of Directive 2006/24 provided, in relation to data protection and data security, that, without prejudice to the provisions adopted pursuant to Directives 95/46 and 2002/58, certain principles of data protection and data security must be respected by providers of publicly available electronic communications services or of public communications networks.

The Court found that the retention of data for the purpose of allowing the competent national authorities to have possible access to those data, as required by Directive 2006/24, genuinely satisfies an objective of general interest. In those circumstances, it was necessary to verify the proportionality of the interference found to exist.

The Court reiterated thatthe principle of proportionality requires that acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and do not exceed the limits of what is appropriate and necessary in order to achieve those objectives (see, to that effect, Case C‑343/09 Afton Chemical, Cases C‑581/10 and C‑629/10 Nelson and Others; and Case C‑283/11 Sky Österreich).

The Court stressed that with regard to judicial review of compliance with those conditions, where interferences with fundamental rights were at issue, the extent of the EU legislature’s discretion might prove to be limited, depending on a number of factors, including, in particular, the area concerned, the nature of the right at issue guaranteed by the Charter, the nature and seriousness of the interference and the object pursued by the interference (see, by analogy, as regards Article 8 of the ECHR, Eur. Court H.R., S. and Marper v. the United Kingdom [GC], nos. 30562/04 and 30566/04, § 102, ECHR 2008-V).

The Court found that in the present case, in view of the important role played by the protection of personal data in the light of the fundamental right to respect for private life and the extent and seriousness of the interference with that right caused by Directive 2006/24, the EU legislature’s discretion was reduced, with the result that review of that discretion should be strict.

The Court held that the EU legislation in question must lay down clear and precise rules governing the scope and application of the measure in question and imposing minimum safeguards so that the persons whose data had been retained had sufficient guarantees to effectively protect their personal data against the risk of abuse and against any unlawful access and use of that data (see, by analogy, as regards Article 8 of the ECHR, Eur. Court H.R., Liberty and Others v. the United Kingdom, 1 July 2008, no. 58243/00, § 62 and 63; Rotaru v. Romania, § 57 to 59, and S. and Marper v. the United Kingdom, § 99).

The Court added that the need for such safeguards is all the greater where, as laid down in Directive 2006/24, personal data were subjected to automatic processing and where there was a significant risk of unlawful access to those data (see, by analogy, as regards Article 8 of the ECHR, S. and Marper v. the United Kingdom, § 103, and M. K. v. France, 18 April 2013, no. 19522/09, § 35).

The Court found that Directive 2006/24 affected, in a comprehensive manner, all persons using electronic communications services, but without the persons whose data were retained being, even indirectly, in a situation which was liable to give rise to criminal prosecutions. It therefore applied even to persons for whom there was no evidence capable of suggesting that their conduct might have a link, even an indirect or remote one, with serious crime. Furthermore, it did not provide for any exception, with the result that it applied even to persons whose communications were subject, according to rules of national law, to the obligation of professional secrecy.

Moreover, whilst seeking to contribute to the fight against serious crime, Directive 2006/24 did not require any relationship between the data whose retention was provided for and a threat to public security and, in particular, it was not restricted to a retention in relation (i) to data pertaining to a particular time period and/or a particular geographical zone and/or to a circle of particular persons likely to be involved, in one way or another, in a serious crime, or (ii) to persons who could, for other reasons, contributed, by the retention of their data, to the prevention, detection or prosecution of serious offences.

The Court held that not only was there a general absence of limits in Directive 2006/24 but Directive 2006/24 also failed to lay down any objective criterion by which to determine the limits of the access of the competent national authorities to the data and their subsequent use for the purposes of prevention, detection or criminal prosecutions concerning offences that, in view of the extent and seriousness of the interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter, might be considered to be sufficiently serious to justify such an interference. On the contrary, Directive 2006/24 simply referred, in Article 1(1), in a general manner to serious crime, as defined by each Member State in its national law.

The Court in short held that Directive 2006/24 did not lay down clear and precise rules governing the extent of the interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter. The Court held that Directive 2006/24 entailed a wide-ranging and particularly serious interference with those fundamental rights in the legal order of the EU, without such an interference being precisely circumscribed by provisions to ensure that it was actually limited to what was strictly necessary.

The Court concluded that that, by adopting Directive 2006/24, the EU legislature had exceeded the limits imposed by compliance with the principle of proportionality in the light of Articles 7, 8 and 52(1) of the Charter. The Court held that in those circumstances, there was no need to examine the validity of Directive 2006/24 in the light of Article 11 of the Charter.

Text of judgment

Case C-82/12, Transportes Jordi Besora SL

2014-04-08T03:01:00.000+02:00

Court finds that Spanish tax on retail sales of diesel and petrol is contrary to EU law

>> The Excise Duty Directive (Directive 92/12) which concerns, inter alia, mineral oils such as petrol, diesel, heavy fuel oil and kerosene, lays down the rules relating to the levying of excise duties in the EU in such a way as to prevent additional indirect taxes from improperly obstructing trade. However, Article 3(2) of the directive provides that mineral oils may be subject to indirect taxation other than the harmonised excise duty established by the directive where two conditions are both satisfied. Spain thus established a tax on the retail sale of certain hydrocarbons (namely petrol, diesel, fuel oil and paraffin) (‘the IVMDH’).

Transportes Jordi Besora SL was a haulage company established in the Autonomous Community of Catalonia. For the tax years 2005 to 2008, it paid, as final consumer, a total of €45 632.38 in respect of the IVMDH. Taking the view that the IVMDH was incompatible with the directive, the company sought a refund of the amount paid. The Tribunal Superior de Justicia de Cataluña (High Court of Justice of Catalonia, Spain) asked whether Article 3(2) of Directive 92/12 must be interpreted as precluding national legislation that establishes a tax on the retail sale of mineral oils such as the IVMDH.

The Court first of all held that Article 3(2) of Directive 92/12 provides that mineral oils might be subject to indirect taxation other than the excise duty established by that directive if, first, the tax pursued one or more specific purposes and if, secondly, it complied with the tax rules applicable for excise duty or VAT purposes as far as determination of the tax base, calculation of the tax, chargeability and monitoring of the tax are concerned.

The Court added that hose two conditions, which were intended to prevent additional indirect taxes from improperly obstructing trade (Case C‑434/97 Commission v France [2000] ECR I‑1129, paragraph 26, and EKW and Wein & Co, paragraph 46), were cumulative, as was apparent from the very wording of that provision.

As regards the first of those conditions, it was apparent from the case-law of the Court that a specific purpose within the meaning of Article 3(2) of Directive 92/12 was a purpose other than a purely budgetary purpose (see Case C‑491/03 Hermann [2005]).

The Generalitat de Catalunya and the Spanish Government, supported by the Greek and French Governments, emphasize held that the revenue from the IVMDH was allocated to the Autonomous Communities not in a general manner with the purely budgetary objective of strengthening their financial capacity, but with the aim of offsetting the burden entailed by the exercise of the powers transferred to them in the fields of health and the environment. The Court however held that, since every tax necessarily pursued a budgetary purpose, the mere fact that a tax such as the IVMDH was intended to achieve a budgetary objective could not, in itself, suffice – if Article 3(2) of Directive 92/12 was not to be rendered meaningless – to preclude that tax from being regarded as having, in addition, a specific purpose within the meaning of that provision.

Moreover, the predetermined allocation of the proceeds of a tax such as the IVMDH to the financing by regional authorities, such as the Autonomous Communities, of powers transferred to them by the State in the fields of health and the environment could constitute a factor to be taken into account for the purpose of establishing the existence of a specific purpose within the meaning of Article 3(2) of Directive 92/12. However, such an allocation, which was merely a matter of internal organisation of the budget of a Member State, could not, in itself, constitute a sufficient condition in that regard, since any Member State may decide to lay down, irrespective of the purpose pursued, that the proceeds of a tax be allocated to financing particular expenditure. Otherwise, any purpose could be considered to be specific within the meaning of Article 3(2) of Directive 92/12, which would deprive the harmonised excise duty established by that directive of all practical effect and be contrary to the principle that a derogating provision such as Article 3(2) must be interpreted strictly.

The Court held in order to be regarded as pursuing a specific purpose within the meaning of that provision, a tax such as the IVMDH must, by contrast, itself be directed at protecting health and the environment. This would, in particular, be the case where the proceeds of that tax had to be used for the purpose of reducing the social and environmental costs specifically linked to the consumption of the mineral oils on which that tax was imposed, so that there was a direct link between the use of the revenue and the purpose of the tax in question. However, in the main proceedings, it was not contested that the revenue from the IVMDH had to be allocated by the Autonomous Communities to health expenditure in general and not to health expenditure which was specifically linked to the consumption of the taxed hydrocarbons. Such general expenditure might be financed by the proceeds of all kinds of taxes.

It followed that a tax such as the IVMDH at issue in the main proceedings, which according to the information available to the Court was now integrated in the harmonised excise duty rate, could not be regarded as pursuing a specific purpose within the meaning of Article 3(2) of Directive 92/12.

The Court thus found that Article 3(2) precluded a tax such as the IVMDH from being regarded as meeting the conditions in that provision, without there being a need to examine whether the second condition set out in Article 3(2), relating to compliance with the tax rules applicable to excise duty or VAT, was satisfied. The Court found that it was not appropriate to limit the temporal effects of the judgment, since the Spanish Government and the Generalitat de Catalunya did not act in good faith in maintaining that tax in force for a period of more than 10 years.

Text of Judgment

Case C-17/13, Alpina and Nicko

2014-03-31T03:42:00.000+02:00

Freedom to provide services to maritime cabotage applicable to EU shipowners who have their ships registered in a Member State governs maritime cruise services

Under the regulation on maritime cabotage (Council Regulation (EEC) No 3577/9) freedom to provide services to maritime transport within a Member State has applied, since 1 January 1993, to EU shipowners who have their ships registered in, and flying the flag of a Member State, provided that these ships comply with all conditions of national law in relation to cabotage.

Alpina (a Swiss company) and Nicko Tours (a German company), respectively, the shipowner and user company of a Swiss tourist vessel, wished to organise a cruise of approximately one week departing from Venice. They had intended to cross the Venetian lagoon to Chioggia, then cross territorial sea between Chioggia and Porto Levante before travelling up the river Po for approximately 60 kilometres and returning to Venice following the reverse itinerary. The application for authorisation to cross the stretch of sea was rejected by the port authority on the ground that, under Italian law, maritime cabotage was reserved for ships flying the flag of a Member State of the EU. Alpina and Nicko Tours contested that refusal before the Veneto Regional Administrative Court (Tribunale amministrativo regionale per il Veneto), and subsequently before the Italian Council of State (Consiglio di Stato). The latter court asked, in essence, whether a cruise which started and ended, with the same passengers, in the same port of the Member State in which it took place, was covered by the term ‘maritime cabotage’ within the meaning of Regulation No 3577/92.

The Court held that it was apparent from Article 1(1) of Regulation No 3577/92 that regulation related only to transport services within a Member State (cabotage) which were of a maritime nature. Consequently, inland waterway transport services provided within a Member State and not of a maritime nature were not governed by that regulation. By contrast, those services fell within the scope of Council Regulation 3921/91 of 16 December 1991 laying down the conditions under which non-resident carriers may transport goods or passengers by inland waterway within a Member State (OJ 1991 L 373, p. 1).

However, contrary to what Alpina and Nicko Tours claim, it did not appear that the cruise which was the subject of the dispute in the main proceedings had a mainly non-maritime nature.

The Court held that the term ‘sea’ referred to by Regulation No 3577/92 was not limited to territorial sea within the meaning of the United Nations Convention on the Law of the Sea, but also covered internal maritime waters which are on the landward side of the baseline of the territorial sea (see, also Case C‑323/03 Commission v Spain).

Consequently, even if Alpina and Nicko Tours were correct in claiming that the crossing of the stretch of sea between Chioggia and Porto Levante was in itself too short to confer a maritime nature on the cruise at issue in the main proceedings, their argument that that cruise had a mainly non-maritime nature appeared, subject to verification by the referring court, at all events to be unfounded in that, besides that stretch, other sections of the itinerary, such as the areas of navigation in the Venetian lagoon and in the mouth of the river Po, formed part of the internal maritime waters of the Italian Republic.

The Court added in order to reply to the question referred, it was necessary to note at the outset that it was unambiguously apparent from the reference to ‘cruise liners’ in Article 3(1) of Regulation No 3577/92 and from the derogation provided until 1 January 1995 for some cruise services in Article 6(1) of that regulation that cruises were among the types of transport covered by that regulation. However, since Regulation No 3577/92 concerned ‘maritime cabotage’ alone, only cruises covered by that concept fell within the ambit of that regulation.

The Court thus concluded that a maritime transport service consisting of a cruise which started and ended, with the same passengers, in the same port of the Member State in which it took place, was covered by the term ‘maritime cabotage’ within the meaning of Regulation No 3577/92.

Text of Judgment

Case C-555/13 Merck v. Accord Healthcare

2014-02-27T06:18:00.000+01:00

An arbitral tribunal such as the Portuguese ‘Tribunal Arbitral necessário’ may refer questions to the Court of Justice for a preliminary ruling

>> In order to avoid the period between the lodging of a patent application for a medicinal product and the marketing authorisation for that medicinal product reducing the duration of the protection conferred by the patent (20 years), Regulation 469/2009 created the supplementary protection certificate. This certificate can be granted for a maximum duration of five years, while the total duration of protection offered by the patent and by the certificate may not exceed 15 years from the first marketing authorisation in the European Union.

In November 2012, Merck ] brought an action before a Portuguese arbitral tribunal for the purpose of blocking the marketing of generic drugs containing the active ingredient at issue. Merck considers that these generic drugs could not be marketed in Portugal before 17 August 2014, the date on which, in its opinion, the certificate was due to expire. The generic drug manufacturers were of the view that the protection conferred by the patent and the certificate expired in August 2012, 15 years after the first marketing authorisation in the EU of a medicinal product containing the active ingredient. Seeking clarification on the subject, the Tribunal Arbitral necessário decided to refer a question to the Court of Justice for a preliminary ruling.

The Court however found that it was necessary to establish whether the Tribunal Arbitral necessário should be considered to be a court or tribunal for the purposes of Article 267 TFEU.

The Court reiterated that in order to determine whether a body making a reference was a ‘court or tribunal’ within the meaning of Article 267 TFEU, which was a question governed by EU law alone, the Court took account of a number of factors, such as whether the body is established by law, whether it was permanent, whether its jurisdiction was compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent (see C‑394/11 Belov [2013]).

The Court also reiterated that a conventional arbitration tribunal was not a ‘court or tribunal of a Member State’ within the meaning of Article 267 TFEU where the parties were under no obligation, in law or in fact, to refer their disputes to arbitration and the public authorities of the Member State concerned were not involved in the decision to opt for arbitration nor required to intervene of their own accord in the proceedings before the arbitrator (Case C‑125/04 Denuit and Cordenier [2005]).

However, the Court has held admissible preliminary questions referred to it by an arbitral tribunal, where that tribunal had been established by law, whose decisions were binding on the parties and whose jurisdiction did not depend on their agreement (see, to that effect, Case 109/88 Danfoss [1989]).

In the present case, the jurisdiction of the Tribunal Arbitral necessário did not stem from the will of the parties, but from a Spanish law which conferred upon that tribunal compulsory jurisdiction to determine, at first instance, disputes involving industrial property rights pertaining to reference medicinal products and generic drugs. In addition, if the arbitral decision handed down by such a body was not subject to an appeal before the competent appellate court, it became definitive and had the same effects as a judgment handed down by an ordinary court.

The Member State at issue had therefore chosen, in the context of its procedure autonomy and with a view to implementing Regulation No 469/2009, to confer the jurisdiction for this type of dispute upon another body rather than an ordinary court (see Case 246/80 Broekmeulen v Huisarts Registratie Commissie). Furthermore, according to the order for reference, the arbitrators were subject to the same obligations of independence and impartiality as judges belonging to the ordinary courts and the Tribunal Arbitral necessário observing the principle of equal treatment and the adversarial principle in the treatment of parties and gave its rulings on the basis of the Portuguese law on industrial property.

Taking all of those considerations into account, the Court held that, in circumstances such as those of the main proceedings, the Tribunal Arbitral necessário fulfilled all of the conditions laid down by the case-law of the Court and must be considered to be a court or tribunal for the purposes of Article 267 TFEU.

Text of Judgment

Case C‑284/12, Lufthansa v Flughafen Frankfurt-Hah

2013-12-21T19:44:00.000+01:00

Court further clarifies role of national courts with regard to standstill principle of Article 108(3) TFEU

>> Flughafen Frankfurt-Hah (FFH), operator of Frankfurt Hahn Civil Airport, was owned, until January 2009, 65% by Fraport AG, 17.5% by the German federal state of Rhineland-Palatinate and 17.5% by the German federal state of Hessen. Fraport AG was a public company listed on a stock exchange and owned, as to the majority of its shares, by Germany, the federal state of Hessen and the city of Frankfurt am Main.

FFH had generated annual losses of several million euros since the beginning of its activities. On 31 December 2011, those losses amounted to around EUR 197 million. Those were covered, until 2009, by Fraport AG on the basis of an agreement for the transfer of profits. On 1 January 2009, however, Fraport AG sold its shares to the federal state of Rhineland-Palatinate for the token sum of EUR 1.

Ryanair was responsible for over 95% of passenger traffic through Frankfurt Hahn Airport. According to the schedule of fees of that airport for 2001, airlines using it had to pay a fee of EUR 4.35 per departing passenger. However, Ryanair was not charged any fee for take-off, approach, landing or use of the infrastructure of the airport since it exclusively used planes which, in accordance with that schedule, gave it an exemption, namely planes whose weight at take-off is between 5.7 and 90 tons.

The schedule of fees of Frankfurt Hahn Airport for 2006 was based on a grid drawn up on the basis of the number of passengers transported per year by an airline from that airport, the range being from EUR 5.35 for less than 100 000 passengers per year to EUR 2.24 for 3 million or more passengers. That schedule also made the exemption from landing and take-off fees, as well as those relating to the provision of air navigation services and ground handling services, dependent on the condition that the duration of ground handling assistance did not exceed 30 minutes. That schedule also provided for the grant of ‘marketing support’ for the opening of new air routes. The amount of that support was determined on the basis of the total volume of passengers transported by the airline concerned. Ryanair received that support. Considering that the business practices of FFH constituted State aid which had not been notified to the Commission and therefore had been granted in breach of Article 108(3) TFEU, Lufthansa brought an action before the Landgericht Bad Kreuznach.

On 17 June 2008 the Commission decided to initiate a formal investigation procedure under Article 108(2) TFEU regarding possible State aid granted by Germany to FFH and Ryanair. The measures covered by the decision included the reduction in airport fees and marketing support provisions for the benefit of Ryanair. In that decision the Commission reached a preliminary view that each of the measures in question was selective and constituted State aid within the meaning of Article 107(1) TFEU, unless it satisfied the private investor principle.

The Oberlandesgericht Koblenz therefore sent the Commission a request for an opinion pursuant to point 3.2 of the Commission Notice on the enforcement of State aid law by national courts. In its opinion the Commission stated that the Oberlandesgericht Koblenz itself was not required to assess whether the measures in question could or could not be classified as State aid as it could take the decision of 17 June 2008 as a basis for drawing all the necessary inferences from the infringement of Article 108(3) TFEU. With regard to the substance, the Commission stated that the measures in question were both imputable to the State and selective.

Considering, however, that it had to assess whether the measures at issue constituted State aid and, in particular, having doubts as to the selective nature of those measures, the Oberlandesgericht Koblenz decided to stay proceedings and inter alia referred the question whether, where, in accordance with Article 108(3) TFEU, the Commission had initiated a formal investigation procedure under Article 108(2) TFEU with regard to a State measure which had not been notified and was being implemented, a national court hearing an application for the cessation of the implementation of that measure and the recovery of payments already made was required to draw the appropriate conclusions from an infringement of the obligation to suspend the implementation of that measure.

The Court first of all pointed out that Article 108(3) TFEU established a prior control of plans to grant new aid (see Case 120/73 Lorenz [1973] and Case C‑199/06 CELF and Ministre de la Culture et de la Communication (‘CELF I’) [2008]). The aim of that system of prior control was therefore that only compatible aid might be implemented. In order to achieve that aim, the implementation of planned aid was to be deferred until the doubt as to its compatibility is resolved by the Commission’s final decision.

The Court held that the implementation of that system of control was a matter for both the Commission and the national courts, their respective roles being complementary but separate (see Case C-39/94 SFEI and Others [1996]; Joined Cases C-261/01 and C‑262/01 van Calster and Others [2003], and Case C-368/04 Transalpine Ölleitung in Österreich [2006] ). Whilst assessment of the compatibility of aid measures with the common market fell within the exclusive competence of the Commission, subject to review by the Courts of the European Union, it was for the national courts to ensure the safeguarding, until the final decision of the Commission, of the rights of individuals faced with a possible breach by State authorities of the prohibition laid down by Article 108(3) TFEU.

The Court stressed that national courts must offer to individuals the certain prospect that all the appropriate conclusions would be drawn from an infringement of the last sentence of Article 108(3) TFEU, in accordance with their national law, as regards the validity of measures giving effect to the aid, the recovery of financial support granted in disregard of that provision and possible interim measures.The objective of the national courts’ tasks was therefore to pronounce measures appropriate to remedy the unlawfulness of the implementation of the aid, in order that the aid did not remain at the free disposal of the recipient during the period remaining until the Commission made its decision (Case C-1/09 CELF and Ministre de la Culture et de la Communication [2010]).

The Court held that the initiation by the Commission of the formal examination procedure under Article 108(2) TFEU could not therefore release national courts from their duty to safeguard the rights of individuals faced with a possible breach of Article 108(3) TFEU. However, the scope of that obligation might vary, depending on whether or not the Commission had initiated the formal examination procedure with regard to the measure at issue in the proceedings before the national court. In a situation where the Commission had not yet initiated the formal examination procedure and had therefore not yet given a decision as to whether the measures under consideration were capable of constituting State aid, the national courts, seised of a request that they should draw the appropriate conclusions from a possible infringement of the last sentence of Article 108(3) TFEU, might have cause to interpret and apply the concept of aid with a view to determining whether those measures should have been notified to the Commission. Thus it was for those courts to verify, inter alia, whether the measure at issue constituted an advantage and whether it was selective within the meaning of Article 107(1) TFEU.

The Court held that where the Commission had initiated the formal examination procedure with regard to a measure which was being implemented, national courts were required to adopt all the necessary measures with a view to drawing the appropriate conclusions from an infringement of the obligation to suspend the implementation of that measure. To that end, national courts might decide to suspend the implementation of the measure in question and order the recovery of payments already made. They might also decide to order provisional measures in order to safeguard both the interests of the parties concerned and the effectiveness of the Commission’s decision to initiate the formal examination procedure. Where they entertained doubts as to whether the measure at issue constituted State aid within the meaning of Article 107(1) TFEU or as to the validity or interpretation of the decision to initiate the formal examination procedure, national courts might seek clarification from the Commission and, in accordance with the second and third paragraphs of Article 267 TFEU, as interpreted by the Court, they might or must refer a question to the Court for a preliminary ruling (see Case C-222/04 Cassa di Risparmio di Firenze and Others [2006]).

Text of judgment

Case C‑262/12, Vent De Colère and Others

2013-12-21T06:41:00.000+01:00

Court further defines first condition article 107(1) TFEU

>> This case concerned the question whether a mechanism for offsetting in full the additional costs imposed on undertakings because of an obligation to purchase wind-generated electricity at a price higher than the market price that was financed by final consumers must be regarded as an intervention by the State or through State resources within the meaning of Article 107(1) TFEU.

The Court first of all stated that, while categorisation as State aid within the meaning of Article 107(1) TFEU presupposes that four conditions were met, namely, that there was an intervention by the State or through State resources, that the intervention was liable to affect trade between Member States, that it conferred a selective advantage on the beneficiary and that it distorted or threatened to distort competition, the present question concerned the first of those conditions only.
(see Case C‑677/11 Doux Élevage and Coopérative agricole UKL-ARREE [2013])

The Court reiterated that for it to be possible to classify advantages as State aid, first, they must be granted directly or indirectly through State resources and, secondly, that grant must be attributable to the State (see, Case C‑482/99 France v Commission [2002]). The Court held that it was clear that the offset mechanism at issue in the main proceedings was established by law and must therefore be regarded as attributable to the State. As regards, in the second place, the condition that the advantage must be granted directly or indirectly through State resources, the Court recalled that measures not involving a transfer of State resources might still fall within the concept of aid (see, to that effect, Case C‑387/92 Banco Exterior de España [1994]; and Case C‑6/97 Italy v Commission [1999]).

The Court stated that the concept of ‘intervention through State resources’ was intended to cover, in addition to advantages granted directly by the State, those granted through a public or private body appointed or established by that State to administer the aid (see, to that effect, inter alia, Case 78/76 Steinike & Weinlig [1977]).

The Court stressed that Article 107(1) TFEU covered all the financial means by which the public authorities might actually support undertakings, irrespective of whether or not those means were permanent assets of the public sector. Therefore, even if the sums corresponding to the measure in question were not permanently held by the Treasury, the fact that they constantly remained under public control, and therefore available to the competent national authorities, was sufficient for them to be categorised as State resources.

The Court found that Article 107(1) TFEU must be interpreted as meaning that a mechanism for offsetting in full the additional costs imposed on undertakings because of an obligation to purchase wind-generated electricity at a price higher than the market price that was financed by all final consumers of electricity in the national territory, constitutes an intervention through State resources.

Text of judgment

Joined Cases C‑214/12 P, C‑215/12 P and C‑223/12 P, Land Burgenland, Austria and Grawe

2013-12-16T22:06:00.000+01:00

Court further defines scope of private investor test and relevance tender procedure

>> By their appeals, Land Burgenland (Case C‑214/12 P) and Austria (Case C‑223/12 P) sought to have set aside the judgment of the General Court of the European Union of 28 February 2012 in Joined Cases T‑268/08 and T‑281/08 Land Burgenland and Austria v Commission [2012] (‘the Burgenland judgment’) dismissing their actions for annulment of Commission Decision 2008/719/EC of 30 April 2008 on State aid C 56/06 (ex NN 77/06) implemented by Austria for the privatisation of Bank Burgenland.

By its appeal (Case C‑215/12 P), Grazer Wechselseitige Versicherung AG (‘GRAWE’) sought to have set aside the judgment of the General Court of the European Union of 28 February 2012 in Case T‑282/08 Grazer Wechselseitige Versicherung v Commission [2012] dismissing its action for annulment of the contested decision.

Until its privatisation, HYPO Bank Burgenland AG (‘BB’) was a regional bank taking the form of a company limited by shares under Austrian law with its registered office in Eisenstadt (Austria). In 2005, BB had a balance sheet value of EUR 3.3 billion and was wholly owned by Land Burgenland (the Province of Burgenland).

Under Paragraph 4 of the Law on the mortgage bank of the Province of Burgenland (Landes-Hypothekenbank Burgenland-Gesetz, LGBl. No 58/1991), as amended by the law published in LGBl. No 63/1998, if BB defaulted, the Province of Burgenland was liable as deficiency guarantor under Paragraph 1356 of the Austrian Civil Code for all the bank’s liabilities. Under the provisions of that law, the creditors of that bank had direct rights against the guarantor, which was, however, only required to act when the assets of that bank were not sufficient to cover the debts.

That performance guarantee system for public credit institutions (called ‘Ausfallhaftung’), particularly the guarantee provided by that province in favour of BB and its predecessors, had existed in a virtually unchanged form since 1928. The system covered neither a specific period nor a specific amount.

Following an agreement between the Commission of the European Communities and Austria, on the basis of which Commission Decision C(2003) 1329 final of 30 April 2003, relating to aid E 8/02, was adopted (OJ 2003 C 175, p. 8), Ausfallhaftung had to be abolished by 1 April 2007. As a general rule, all liabilities existing on 2 April 2003 continued to be covered by Ausfallhaftung until their expiry. After that, Ausfallhaftung could be maintained between 2 April 2003 and 1 April 2007 for newly created liabilities provided that they would expire by 30 September 2017.

After two unsuccessful attempts in 2003 and in 2005, the Province of Burgenland launched a third procedure for the privatisation of BB, with the investment bank HSBC being entrusted to carry it out. That procedure started in October 2005 with the publication in the press of a call for tenders.

Two bidders, one being GRAWE, an Austrian undertaking offering a range of insurance services, financial services and leasing which, in 2006, held significant direct stakes in two entities in the banking and investment sector, together with GW Beteiligungserwerbs- und -verwaltungs-GmbH, and the other being an Austro-Ukrainian consortium consisting of the Austrian undertakings SLAV AG and SLAV Finanzbeteiligung GmbH and the Ukrainian joint-stock companies Ukrpodshipnik and Ilyich (‘the Consortium’), made binding offers. Those offers subsequently formed the subject of an individual examination and of contractual negotiations which ended on 4 March 2006.

On 5 March 2006, the Province of Burgenland awarded BB to GRAWE despite the purchase price offered by GRAWE (EUR 100.3 million) being significantly lower than the price offered by the Consortium (EUR 155 million). The decision was based, in particular, on a written recommendation by HSBC, supplemented by oral explanations to the members of the Government of the Province of Burgenland on the day of the decision. HSBC’s recommendation essentially stated that, although on the basis of the proposed purchase price the decision should be made in favour of the Consortium, it was recommended that BB be sold to GRAWE, in view of the other selection criteria, namely the reliability of the purchase price payment, the continued operation of BB while avoiding the use of Ausfallhaftung, capital increases and transaction security.

The sale of BB, which was formally approved by the authorities of the Province of Burgenland on 7 March 2006, was closed on 12 May 2006. Before that closing, BB issued bonds, within the framework of Ausfallhaftung, in the amount of EUR 700 million, EUR 320 million of which had been foreseen under the terms of the privatisation, the ‘additional’ bonds of EUR 380 million not being included, according to point 35 of the contested decision, in the draft contracts with GRAWE and the Consortium.

On 4 April 2006, the Commission received a complaint from the Consortium claiming that Austria had infringed State aid rules during the privatisation of BB. The Consortium complained, inter alia, that the tender procedure, which had been unfair, untransparent and discriminatory towards it, had resulted in the sale of BB not to the highest bidder, namely the Consortium, but to GRAWE.

To determine whether GRAWE had received a selective advantage, the Commission examined whether the Province of Burgenland had behaved like any seller operating in a market economy (the ‘private vendor’ test). In that respect, the Commission observed that a private vendor might accept the lower bid instead of the higher bid in two situations.

The first was the situation in which it was obvious that the sale to the highest bidder was not realizable. According to the Commission, not only was there no reason to doubt that the Consortium could pay the purchase price of EUR 155 million that it offered, there was also no indication or any evidence that the FMA would have prohibited BB’s sale to the Consortium.

The second situation covered the case where consideration of factors other than the price was justified, subject to the proviso that only those factors which would have been taken into consideration by a private vendor were taken into account, which, according to the Commission, excluded risks stemming from potential liability to make payment under a guarantee which had to be classified as State aid, such as Ausfallhaftung.

In that respect, the Commission explained that it was apparent from the case-law that the role of the State as the seller of an undertaking and its obligations in its capacity as a public authority should not be mixed up. No private vendors would have entered into a guarantee that did not conform to market conditions and the decision relating to the abolition of Ausfallhaftung confirms that Ausfallhaftung was not granted on those conditions.

In those circumstances, the Commission concluded that Austria had unlawfully granted State aid in favour of GRAWE in relation to the privatisation of BB, in breach of Article 108(3) TFEU, and that that aid was incompatible with the common market.

Private investor test

In their first argument, the Province of Burgenland, Austria and GRAWE claimed, in essence, that the General Court failed to appreciate, in the light of Ausfallhaftung’s characteristics, both the role of the Province of Burgenland as owner and shareholder of BB and, therefore, the private investor test. However, the Court found that the General Court rightly concluded that Ausfallhaftung could not be taken into account when assessing the conduct of the Austrian authorities in the light of the private vendor test and that, consequently, the Commission could not be criticised for having rejected Ausfallhaftung’s relevance when evaluating the offers submitted by the Consortium and by GRAWE.

The Court held that concerning the examination carried out in that respect by the General Court, it was apparent from the Burgenland and GRAWE judgments that the General Court did not base its rejection of the arguments of the Province of Burgenland, Austria and GRAWE on the fact that Ausfallhaftung was established by law, contrary the what those parties claimed. The General Court examined whether Ausfallhaftung had to be taken into account when implementing the private vendor test and found that a private vendor would not have entered into such a guarantee.

The Court found that the Province of Burgenland, Austria and GRAWE did not put forward any argument liable to put that finding into doubt, but claimed themselves that Ausfallhaftung was a State aid, as the Commission had moreover found in Decision C(2003) 1329 final. In those circumstances, and since, by granting aid, a Member State pursued, by definition, objectives other than that of making a profit from the resources granted to an undertaking belonging to it, it must be held that those resources were, in principle, granted by the State exercising its prerogatives as a public authority.

The Province of Burgenland also claimed that the General Court had infringed Article 107(1) TFEU by holding that the Commission did not err by establishing BB’s market value on the basis of the Consortium’s bid, without taking into account the independent studies in its possession or having another study carried out.

The Court first of all reiterated that that the market price was the highest price which a private investor acting under normal competitive conditions was ready to pay for a company in the situation it was in (see Case C‑390/98 Banks [2001] and Case C‑277/00 Germany v Commission [2004]).

The Court added that for the purposes of checking the market price, the national authorities might take into consideration, in particular, the form of the transfer of company, for example public tendering, deemed to ensure that a sale took place under market conditions or any expert’s report prepared at the time of the transfer (see, to that effect, Case C‑214/07 Commission v France [2008], on which I wrote this post).

The Court thus concluded that the General Court was correct to find, that, where a public authority proceeded to sell an undertaking belonging to it by way of an open, transparent and unconditional tender procedure, it could be presumed that the market price corresponded to the highest offer, provided that it was established, first, that that offer was binding and credible and, secondly, that the consideration of economic factors other than the price was not justified.

According to the Court, the General Court was also correct in holding that the highest bid submitted in a tender procedure which was unlawful on account of the presence of unlawful conditions could nevertheless correspond to the market price where the deficiencies of the conditions of the call for tenders did not affect the amount of that bid by pushing it lower.

Since none of the other grounds raised by the Province of Burgenland, Austria and GRAWE in support of their appeals can succeed, those appeals were dismissed.

Text of judgment

Case C‑280/11 P, Access Info Europe

2013-12-15T21:25:00.001+01:00

Note on positions of Member States revision Regulation 1049/2001 subject to public access

>> By this appeal, the Council sought to have set aside the judgment of 22 March 2011 in Case T‑233/09 Access Info Europe v Council [2011] ECR II‑1073. The General Court annulled the Council’s decision of 26 February 2009 refusing to let Access Info Europe have access to certain information contained in a note of 26 November 2008 from the Secretariat General of the Council to the Working Party on Information, set up by the Council, concerning stating the positions of the Member States with regard to the revision of Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents.

By its first ground of appeal, the Council submitted that the General Court disregarded the balanced approach laid down both in primary law (Article 207(3) EC and Article 255 EC, applicable ratione temporis) and secondary law (recital 6 to Regulation No 1049/2001 and the first subparagraph of Article 4(3) thereof) between, on the one hand, the wider right of access to documents relating to the legislative activity of the institutions and, on the other, the need to preserve the effectiveness of the decision-making process. In particular, the General Court construed the first subparagraph of Article 4(3) in such a way as to attribute undue and excessive weight to the transparency of the decision-making process, without taking any account of the needs associated with the effectiveness of that process.

The Court first of all stressed that Regulation 1049/200 reflected the intention expressed in Article 1(2) TEU of marking a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions were taken as openly as possible and as closely as possible to the citizen. The Court held that the public right of access to documents of the institutions was related to the democratic nature of those institutions (see Case C‑506/08 P Sweden v MyTravel and Commission [2011] on which I wrote this post).

The Court held that to that end, Regulation No 1049/2001 was designed to confer on the public as wide a right of access as possible to documents of the institutions. However, that right was according to the Court none the less subject to certain limitations based on grounds of public or private interest. Nevertheless, as such exceptions derogate from the principle of the widest possible public access to documents, they must be interpreted and applied strictly. (see Case C‑266/05 P Sison v Council [2007], on which I wrote this post).

The Court found that if the institution concerned decided to refuse access to a document which it had been asked to disclose, it must, in principle, first explain how disclosure of that document could specifically and actually undermine the interest protected by the exception upon which it was relying. Moreover, the risk of the interest being undermined must be reasonably foreseeable and must not be purely hypothetical (Case C‑506/08 P Sweden v MyTravel and Commission [2011]).

The Court held that, far from disregarding the balance between the principle of transparency and the preservation of the effectiveness of the Council’s decision-making process, the General Court, examined the substance of all the arguments put forward by the Council to justify the application, in the circumstances, of the exception referred to in the first subparagraph of Article 4(3) of Regulation 1049/2001. Contrary to the assertions made by the Council, the Court found that the General Court did take account of the needs associated with the effectiveness of the decision-making process: as it carried out a detailed examination of the arguments adduced by the Council to justify the application, in the circumstances, of the exception concerning the protection of the Council’s decision-making process.

The Council also alleged that the General Court’s reasoning was inconsistent with the case-law of the Court of Justice which allows the institutions to rely on general considerations in order to refuse to disclose certain categories of document. The Court reiterated that in order to justify refusing access to a document, it was not sufficient, in principle, for the document to fall within an activity or an interest referred to in Article 4 of Regulation No 1049/2001, as the institution concerned must also explain how access to that document could specifically and actually undermine the interest protected by an exception laid down in that provision. The Court stresssed that it was nevertheless open to that institution to base its decisions in that regard on general presumptions which applied to certain categories of document, as similar general considerations were likely to apply to requests for disclosure relating to documents of the same nature (see Case C‑139/07 P Commission v Technische Glaswerke Ilmenau [2010], on which I wrote this post).

The Court held that in the present case, even if it were to be taken as established that the Council had argued at first instance that it was entitled to refuse access to a document, such as the requested document, by relying on a presumption based on the considerations concerning the need to protect the delegations’ room for manœuvre during preliminary discussions on the Commission’s legislative proposal, it was clear, first, that, the General Court examined those considerations and that it concluded that they were not a sufficient basis for application of the exception under the first subparagraph of Article 4(3) of Regulation No 1049/2001. Consequently, the Council could according to the Court not reasonably argue that it was entitled to refuse access to the requested document by relying on a presumption based on such considerations. The Court thus found that the arguments seeking to show that the General Court did not take into account the reasons why the Council had considered that those general considerations were applicable to the requested document were ineffective.

Text of judgment

Case C‑539/11, Ottica New Line di Accardi Vincenzo

2013-12-13T23:42:00.001+01:00

Regional law making establishment of new opticians’ practices subject to criteria based on population density and distance between practices likely to infringe freedom of establishment

>> This request for a preliminary ruling concerns the interpretation of Articles 49 TFEU and 56 TFEU. The request had been made in proceedings between Ottica New Line di Accardi Vincenzo (‘Ottica New Line’) and the Comune di Campobello di Mazara (pictured) concerning the latter’s decision to authorise Fotottica Media Visione di Luppino Natale Fabrizio e. C. s.n.c. (‘Fotottica’) to carry out the activity of optician, on a permanent basis, in the territory of that municipality.

By decision of 18 December 2009, the comune di Campobello di Mazara authorised Fotottica to establish an optician’s shop in its territory. It was not disputed that that establishment did not comply the limits relating to population density and on distance between opticians’ shops laid down in that provision. Ottica New Line contested that decision

The referring court asked, in essence, whether European Union law precluded regional legislation, such as that at issue in the main proceedings, which limited the grant of authorisation for the establishment of a new optician’s shop in providing that:
– in each geographical area, only one optician’s shop may be established, in principle, for every 8 000 residents, and
– each new optician’s shop must, in principle, be a minimum distance of 300 metres from an existing optician’s shop.

The Court first of all held that the legislation at issue in the main proceedings governed only the conditions for establishing an optician’s shop in a part of Italian territory. In those circumstances, the provisions concerning the freedom to supply services, which applied only if those relating to the freedom of establishment did not apply, were according to the Court not relevant (see, by analogy, Case C‑384/08 Attanasio Group [2010]).

The Court also found that pursuant to Article 2(2)(f) of Directive 2006/123, the activities of the opticians at issue in the main proceedings were excluded from the scope of that directive.The Court found that, accordingly, the restrictions at issue in the main proceedings need to be examined only with regard to their compatibility with the TFEU and, more specifically, with Article 49 thereof. The Court held that in accordance with Article 168(7) TFEU, as interpreted in its case‑law, European Union law did not detract from the power of the Member States to adopt provisions aimed at organising their health services. In exercising that power, however, the Member States must comply with European Union law, in particular the provisions of the TFEU on the freedom of establishment, which prohibited the Member States from introducing or maintaining unjustified restrictions on the exercise of that freedom in the healthcare sector (see, to that effect, Joined Cases C‑171/07 and C‑172/07 Apothekerkammer des Saarlandes and Others [2009]).

Whether there was a restriction on the freedom of establishment

The Court reiterated that any national measure which, albeit applicable without discrimination on grounds of nationality, was liable to hinder or render less attractive the exercise by European Union nationals of the freedom of establishment guaranteed by the Treaty constitutes a restriction within the meaning of Article 49 TFEU (Case C-140/03 Commission v Greece (2005)).

The Court stressed that a national rule which made the establishment of a service provider from another Member State conditional upon the issue of prior authorisation fell within that category, since it was capable of hindering the exercise by that service provider of the freedom of establishment by preventing it from freely pursuing its activities through a fixed place of business. (Case C‑169/07 Hartlauer [2009]).

In so far as concerns the dispute in the main proceedings, the Court notes, firstly, that the regional legislation concerned made the establishment of new opticians’ shops subject to prior administrative authorisation. Secondly, that legislation took account of the ratio between population density and the number of opticians’ shops, with a view to distributing supply throughout the given territory in a rational manner. The Court found that, in authorising the establishment of only a limited number of opticians’ shops in a given territory, that legislation thus restricted the access of opticians to their economic activity in that territory. Thirdly, that legislation was capable of preventing opticians from freely choosing where to exercise their independent activity, in so far as those seeking to establish shops were required to observe a minimum distance of 300 metres from existing opticians’ shops.

The Court thus found that the effect of such rules was thus to hinder and render less attractive the exercise by opticians from other Member States of their activities in Italian territory through a fixed place of business. Consequently, the regional legislation amounted to a restriction on the freedom of establishment within the meaning of Article 49 TFEU.

Justification for the restriction on the freedom of establishment

The Court held hat restrictions on the freedom of establishment which were applicable without discrimination on grounds of nationality might be justified by overriding reasons relating to the general interest, provided that the restrictions were appropriate for securing attainment of the objective pursued and did not go beyond what was necessary for attaining that objective.

The Court reiterated that restrictions on the freedom of establishment may be justified by the general objective of the protection of public health (see: Joined Cases C‑171/07 and C‑172/07 Apothekerkammer des Saarlandes and Others [2009]). That general objective might seek, more specifically, to ensure even distribution of healthcare providers throughout the national territory.
case C-570/07, Blanco Pérez en Chao Gómez (2010).

The Court held that in pursuing such an objective, the establishment of service providers, such as pharmacies, might be subject to planning, including prior authorisation for the establishment of opticians’ shops, where that planning proved indispensable for filling in possible gaps in access to public health services and for avoiding the duplication of structures, in so far as the opticians at issue provided services aimed at assessing, maintaining or restoring the state of health of patients, with the result that those services were encompassed by the protection of public health.

The Court found that the legislation concerned was, in principle, appropriate for securing attainment of the general objective pursued of protecting public health and, in particular, the objectives of ensuring even distribution of opticians’ shops throughout the national territory and ensuring rapid access to such establishments. None the less, it was also necessary that the way in which the legislation pursued those objectives was coherent. The Court reiterated that it was required that the national legislation as a whole and the various relevant rules were appropriate for ensuring attainment of the objective relied upon only if they genuinely reflected a concern to attain that objective in a consistent and systematic manner.

The Court held that it was ultimately for the national court to determine whether and to what extent Regional Law No 12/2004 satisfied those conditions (see Case 171/88 Rinner-Kühn [1989], and Joined Cases C-4/02 and C-5/02 Schönheit and Becker [2003]). However, the Court points out, first of all, that the legislation laid down conditions which differed for municipalities with fewer than 8 000 residents and those with more than that number. The Court found that it was not inconceivable that the municipalities which fell within the first category were largely free to authorise the establishment of two opticians’ shops in their territory, whereas those in the second category could grant such authorisation only if ‘the existence of territorial needs has been substantiated’ and if those municipalities had gained the prior and mandatory opinion of a committee.The Court concluded that such legislation risked bringing about unequal access to the establishment of opticians’ shops in the various areas of the region concerned. The Court found that the legislation also risked, as of its implementation, failing to ensure an even distribution of opticians’ shops throughout the entire territory concerned and, consequently, an equal level of protection of public health throughout that territory.

Text of judgment