Free Movement of Persons Flashcards
Seminar notes 1
Learning outcomes
Preparation for and participation in this tutorial should enable you to:
- analyse the problems associated with the exercise of establishment by companies and natural persons
- apply the rules relating to these freedoms to factual situations
- explain the Court of Justice’s case law on obstacles to these freedoms
- compare and contrast these freedoms with each other as well as from other Treaty concepts, such as goods and workers
- compare the notion of obstacles under Arts 45, 49 and 56 TFEU with restrictions under Art 36, 52 and 62 TFEU
Obstacles
Article 45 abolition of discrimination against workers.
• 45(2) – abolition of any discrimination on nationality between workers of MS as regards, employment, remuneration, and other conditions of work and employment.
• 45(3) – entails the right to accept offers of employment made, and to move freely within the territory of the MS for this purpose
• 45(4) – this article does not apply to employment in the public service.
Article 49 – free movement of services – I would classify as such.
• Prohibits restrictions on the freedom of establishment of nationals of a MS in another MS.
• Establishments include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings in companies.
o SO
o 1. There is an abolition of restrictions on freedom of primary and secondary establishment,
o 2. There is also a right to pursue self-employed activities on an equal footing with the nationals of the MS of establishment.
• Its effect
o In Reyners the ECJ ruled that this article was directly effective despite the fact that the conditions for direct effect set out in Van Gend en Loos were arguably not met.
♣ Reyners, a Dutch national who had obtained his legal education in Belgium, was refused admission to the Belgium Bar solely because he lacked Belgium nationality. The requirement of non-discrimination allowed him to invoke Article 49 directly, however, the ECJ acknowledge that the directives also aimed to make easier the effective exercise of the right of freedom of movement of establishment.
Article 56
• Prohibits the restriction on freedom to provide services within the Union.
• The Article indicates that in order to benefit from the right to provide services, the person in question, natural or legal must already have a place of establishment within the EU, and if a natural person, must possess the nationality of a MS.
• Free movement of services is very similar to that of establishment, except that the activity in question is pursued on a temporary rather than a permanent basis is a MS.
Restrictions
Article 36
• Article 36 provides the grounds on which it can be invoked – those are: public morality, public policy or public security, the protection of health and life of humans, animals or plants, the protection of national treasures possessing artistic, historic or archaeological value, or the protection of industrial and commercial property.
Article 52 – no right to invoke free movement after a criminal conviction or to be expelled without the right to appeal.
• Freedom of establishment does not give especial treatment to foreigners on grounds of public policy, public security or public health. The free movement to move and reside within the territory of the MS are circumstances which cannot be invoked as grounds for refusal of entry or expulsion, Directive 2004/38. According the Court, EU law precludes automatic expulsion without right of appeal of the national of a MS following a criminal conviction which takes account of the personal conduct of the person convicted nor of the risk he represents to public order (C-482/01).
Article 62
• States that the provisions of Article 51-54 shall apply to the matters covered by the right of establishment.
Alpine Investment, C-384/94, ECLI:EU:C:1995:126
Alpine Investment, C-384/94, ECLI:EU:C:1995:126
• Netherlands – freedom to provide services – Article 59 of the Treaty – Prohibition of cold calling by telephone for financial services.
• Facts
o Alpine Investments brought proceedings challenging the restriction imposed on it by the Netherlands Ministry of Finance prohibiting it from contacting individuals by telephone without their prior consent in writing in order to offer them various financial services.
• The Court’s ruling:
1. ‘On a proper construction, Article 59 of the EEC Treaty covers services which the provider offers by telephone to potential recipients established in other MSs and provides without moving from the MS in which he is established.’
2. ‘Rules of a MS which prohibit provides of services established in its territory from making unsolicited telephone calls to potential clients established in other MSs in order to offer their services constitutes a restriction on freedom to provide services within the meaning of Article 59 of the Treaty.
3. ‘Article 59 does not preclude national rules which, in order to protect investor confidence in national financial markets, prohibit the practice of making unsolicited telephone calls to potential clients resident in other MS to offer them services linked to investment in commodities futures.’
De Coster, C-17/00, ECLI:EU:C:2001:651
• Question raised in the proceedings between Mr De Coster and the College concerning the municipal tax on satellite dishes which he was charged for the year 1998.
• Belgium rules imposing tax on the satellite dishes of consumers and was impacting on the free movement of consumers.
• [6] Mr De Coster considers that such tax results in a restriction on the freedom to receive television programmes coming from other MS which is contrary to Community law and especially to Articles 59 of the Treaty.
• Ruling
o [26] In the context of freedom to provide services the Court has recognised that a national tax measure restricting that freedom may constitute a prohibited measure.
o [29] ‘according to the case-law of the Court, Article 59 of the Treaty requires not only the elimination of all discrimination on grounds of nationality against providers of services who are established in another Member State, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit or further impede the activities of a provider of services established in another Member State where he lawfully provides similar services.’
o [34] ‘Furthermore, as the Commission also observes, the introduction of such tax is liable to hinder the activities of operators in the field of satellite transmission by imposing a charge on the reception of programmes transmitted by such operations which does not apply to the reception of programmes transmitted by the national cable distributors.’
o
You must ensure you are familiar with the principles arising from the following cases
Van Binsbergen , 33/74, ECLI:EU:C:1974:131
• The Court is mainly asked whether Articles 59 and 60 of the Treaty are directly applicable and create individual rights which national courts must protect.
• The question was resolved with reference to the whole of the chapter relating to services, and the right of establishment to which reference is made in Article 66.
o ‘The provisions of Articles 59, the application of which was to be prepared by directives issue during the transitional period, therefore became unconditional on the expiry of that period.’
o ‘The provisions of that article abolish all discrimination against the person providing the service by reasons of his nationality or the fact that he is established in a Member State other than in which the service is to be provided.’
o ‘Accordingly the reply should be that that… Article 59 and…Article 60 have direct effect and may therefore be relied on before national courts, at least in so far as they seek to abolish any discrimination against a person providing a service by reason of his nationality or of the fact he resides in a Member State other than that in which the service is to be provided.’
♣ So – judgment
♣ 1. Articles 59 and 60 must not deny persons established in another MS the right to provide services, where the provision of services is not subject to any special condition under the national law applicable.
♣ 2. ‘The first paragraph of Article 59 and the third paragraph of Article 60 have direct effect and may therefore be relied on before national courts, at least in so far as they seek to abolish any discrimination against a person providing a service by reason of his nationality or of the fact that he resides in a MA other than that in which the service is to be provided.
• The Court here identified two reasons for the Treaty provisions on the adoption of directives:
o First: to abolish restrictions
o Second: to facilitate the freedom to provide services.
• The provider may rely on Article 56 as against the state in which he or she is established, so long as the services are provided for persons established in another MS.
• Facts
o A Dutch national acting as a legal adviser to Van Binbergen in respect proceedings before a Dutch social security transferred his place of residence from the Netherlands to Belgium during the course of the proceedings. He was told that he could no longer represent his client since, under Dutch law, only those established in the Netherlands could act as legal advisers.
o A reference was made to the Court to see whether Article 56 TFEU had direct effect, and whether the Dutch rule was compatible with it.
Vlassopoulou,-340/89, ECLI:EU:C:1991:193
• A Greek national who obtained a Greek law degree and a Doctorate in Germany and had practised German law for several years in Germany applied for admission to the German Bar. Her authorization was rejected on the ground that she lacked the necessary qualifications because she had not passed the relevant German examinations. The ECJ began by ruling that even the non-discriminatory application could hinder the exercise of freedom of establishment. Thus,
o Upon possession of a diploma or professional qualification, ‘must take into consideration the diplomas, certificates and other evidence of qualifications which the person concerned has acquired’
♣ If they are found to be equivalent, the state must recognize the qualification, and if they are not so found the state must assess whether any knowledge or practical training the person may have acquired in the host MS is sufficient to make up for what was lacking in the qualification.
o This case highlights the effectiveness of Article 49 which was bolstered by the Court following Reyners, where the Court held that in the absence of legislation only the core non-discrimination requirement of the Article was directly effective.
o ANALYSIS POINT
♣ The approach adopted in this case closely reflected the provisions of the Council Directive 89/48 on the mutual recognition of higher education diplomas which was adopted around that time, but was not applicable on the facts of V.
o The broad principles articulated in Vlassopoulou + Heylens continue to apply to situations which are not covered by secondary legislation.
• So long as some ‘EU element’ is present and the situation is not wholly internal, individuals can rely on Article 49 on their own state.
The Court’s ruling
• Article 52 of the Treaty must be interpreted as requiring the national authorities of a Member State [with regard to the admission to the profession of a lawyer], who is already admitted as a lawyer in his country of origin, to examine the knowledge and qualifications attested by the diploma obtained by the person concerned in his country of origin correspond to those required by the rules of the host MS; if those diplomas correspond only partially, the national authorities in question are entitled to require the person concerned to prove that he has acquired the knowledge and qualifications which are lacking.
o [15] ‘national requirements concerning qualifications may have the effect of hindering nationals of the other MS in the exercise of their right of establishment guaranteed to them by Article 52…That could be the case if the national rules in question took no account of the knowledge and qualifications already acquired by the person concerned in another MS.’
Factortame II, 221/89, ECLI:EU:C:1991:320
The Court’s ruling
• ‘It is contrary to the provisions of Community law and, in particular, to Article 52 of the EEC Treaty for a MS to stipulate as conditions for the registration of a fishing vessel in its national register: (a) that the legal owners and beneficial owners and the charterers, managers and operators of the vessel must be nationals of that MS or companies incorporated in that MS, and that, in the latter case, at least 75% of the shares in the company must be owned by nationals of that MS or by companies fulfilling the same requirements and 75% of the directors of the company must be nationals of that MS; and (b) that the said legal owners and beneficial owners, charterers, managers, operators, shareholders and directors, as the case may be, must be resident and domiciled in that MS.’
Gebhard, C-55/94, ECLI:EU:C:1995:411
• The facts
o Authority for the four criteria for how a non-discriminatory measure must be assessed – repeated in De coster.
o Authority for rules that have something to do with hindering market access and to distinguish between Article 49/56.
♣ Distinguish establishments from services –
♣ ‘If you have your MS national taking part in the economic life in a stable economic establishment. Establishment is related to continuation.
• What this means is looking at the facts and making a decision on this basis.
• Identify the status under EU law –
o Mr Gebhard was accused of contravening his obligations on freedom for lawyers who are nationals of a MS of the EU Community to provide service on the ground that he pursued a professional activity in Italy on a permanent basis (which was not permitted unless it was temporary) in chambers set up by himself whilst using the title ‘avvocato.’
o This is because the Milan Bar Council had prohibited him from using the title avvocato.
o Mr Gebhard applied to the Milan Bar Council to be entered on the roll of members of the bar.
o The case also talks about rules that hinder market access of the exercise of market freedoms
♣ 1. The rule must be non-discriminatory
♣ 2. Must be justified by the requirement
♣ 3. Is it suitable for the objective
♣ 4. It must not go beyond what is necessary to achieve the objective
• Last 2 are proportionality
• The same in law and the same in fact – the key difference is where there is the creation of a differential impact? So if the rule is harsher for instance to immigrants, then it is INDISTINCTIVELY APPLICABLE MEASURE/ BUT IF THE RULE HINDERS MARKET ACCESS then it is market access.
•
• The Court’s ruling
o The Court rejected the Milan Bar’s argument that Mr Gebhard cannot be regarded for the purposes of the Treaty as being ‘established’ in a MS.
o ‘the possibility for a national MS to exercise his right of establishment, and the conditions for his exercise of that right, must be determined in the light of the activities which he intends to pursue on the territory of the MS;’
o A national of of any MS is entitled to establish himself on the territory and pursue those activities there. ‘However, the taking-up and pursuit of certain self-employed activities may be conditional on complying with certain provisions laid down by law, regulation or administrative action justified by the general good…Such provisions may stipulate in particular that pursuit of a particular activity is restricted to holders of a diploma, certificate or other evidence of formal qualifications, to persons belonging to a professional body or to persons subject to particular rules or supervision, as the case may be. They may also lay down the conditions for the use of professional title, such as Avvocato.
o ‘national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it; likewise, MS must take account of the equivalence of diplomas and, if necessary, proceed to a comparison of the knowledge and qualifications required by their national rules and those of the person concerned.’
Centros, C-212/97, ECLI:EU:C:1999:126
• Ruling
o ‘It is contrary to Articles 52 and 58 of the EC Treaty for a MS to refuse to register a branch of a company formed in accordance with the law of another MS in which it has its registered office but in which it conducts no business where the branch is intended to enable the company…to carry on with its entire business in the State in which that brand is to be created…
o That interpretation does not, however, prevent the authorities of the MS concerned from adopting any appropriate measure for preventing or penalising fraud…’
• The Court ruled that a company was lawfully established in the UK even though it had never traded there.
• A company has a right of secondary establishment only if it already has its principal place of business or central or registered office within the EU.
• Facts
o Centros, a company was registered and had its primary establishment in the UK, but had never traded there. The main purpose of establishing in the UK was to trade in Denmark.
o The Danish Board of Trade and Companies refused to register the branch on the ground that Centros was not in fact seeking to establish a branch in Denmark. However, the Court found this to be contrary to Article 52.
Pfeiffer C-255/97, ECLI:EU:C:1999:240
• Summary
o Freedom of movement for persons – freedom of establishment – provision of national law prohibiting, where there is a risk of confusion use of a trade name as the specific designation of an undertaking – whether permissible – conditions.
• Facts
o Pfeiffer brought proceedings against Löwa restraining it from using a particular trade name.
o Pfeiffer has operated a large supermarket in Austria using its own trade name registered in the Austrian Patentamt.
o Löwa also operates in Austria selling goods of the same type as those displayed in Pfeiffer’s supermarket. It also has its own trade name. However, Löwa adopted a similar trade name to Peiffer which seeks to avoid its use by its competitor.
• Questions to be asked:
o The national court is asking whether Article 30 and 52 of the Treaty preclude a provision of national law which does not allow a trade name to be used as the specific designation of an undertaking where there is a risk of confusion.
• [24] ‘Article 52 of the Treaty does not preclude a restraining order such as that which may be made against Löwa in the main proceedings’
• Ruling
o ‘Articles 30 and 52 of the EC Treaty do not preclude a provision of national law which prohibits, where there is a risk of confusion, the use of a trade name as the specific designation of an undertaking.’ BASICALLY DOES not stop you from using a similar trade name.
Uberseering C-208/00, ECLI:EU:C:2002:632
• Centros was followed by the ruling here which confirmed and extended the Centros approach.
• Facts
o Uberseering was a company incorporated in the Netherlands under Dutch law, where it had its registered office. It then sought to transfer its centre of administration to Germany, and its entire share capital was bought by German shareholders. However, Germany would not recognised the company’s legal capacity unless it re-incorporated again under German law.
• The case established that
o Despite the lack of harmonization of the laws set out in Daily Mail, the connecting factor for incorporating a company in one MS and then moves its centre of administration to another MS cannot be denied the its legal personality by the latter MS. Although the German rules aimed to protect creditors, the denial of freedom of establishment was disproportionate.
o Where a company is formed in accordance with the law of one MS in which it has registered office, and then moves its registered office to another MS. The latter MS is precluded from denying the company legal capacity and the capacity to bring legal proceedings before its national courts for the purpose of enforcing rights under a contract with a company established in the latter MS.
• This ruling did not overturn Daily Mail but limited its scope and impact significantly.
Gräbner AND Deutsche Paracelsus Schulen, C-294/00, ECLI:EU:C:2002:442
• Deutsche Paracelsus Schulen is a company established in Germany which offers training courses in the profession of Heilpraktiker. It also organises courses in Austria.
• Mr Gräbner signed a contract for the first two levels of training. Mr G had no further contact with D. He did not exercise his right of withdrawal within the prescribed period of one week and did not give written notice of termination of the agreements he had concluded.
• Before Austrian courts, D sought payment on the basis of the contract for training as a Heilpraktiker concluded with Mr G. Mr G claimed that the contract was void because it infringed the Austrian training law. D responded by claiming that under Community law training as a Heilpraktiker must be permitted in Austria, and that in any event it must be possible to advertise training in Austria for professionals.
• The court asks:
o 1. The national courts ask whether any provision of Community law precludes a MS from restricting an activity such as that of a Heilpraktiker within the meaning of German legislation to holders of a doctor’s qualification.
♣ ‘no provision of Community law, as it presently stands, precludes a MS from restricting the exercise of an activity such as that of a Heilpraktiker within the meaning of the German legislation to holders of a doctor’s qualification.’
o 2. Articles 52 and 59 of the EC Treaty do not preclude:
♣ ‘a Member State which prohibits in its territory the exercise of the activity of a Heilpraktiker within the meaning of the German legislation by persons other than those with a doctor’s qualification from likewise prohibiting the organisation in its territory of training in that activity by unauthorised institutions’ provided that it is related to training that causes confusion.
