LEC 2 Flashcards
Single market
agreement between countries that there will be an area where things can move about as if they were one.
the point of the single market: The things that are needed for economies to grow and countries to be successful should be allowed to move freely as one without borders
freedom of establishment
the right of individuals or businesses to set up and operate their own businesses or professional activities in a country other than their own:
> allows for free movement of entrepreneurs and businesses across borders, promoting economic growth and competition
free movement of services
the principle within the EU that allows for the unrestricted provision of services across member states.
Means that service providers can offer their services in any EU country without facing discriminatory barriers or restrictions
Article 26 of the Treaty on the Functioning of the EU (TFEU)
(1) the union shall adopt measures with the aim of establishing or enduring the functioning of the internal market, in accordance with the relevant provisions of the treaties
(2) the internal market shall compromise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured with the provision for the treaties
article 26 states that: the things that should be allowed to move are…
goods, people, services (and establishment), capital.
article 18 TFEU
Discrimination on grounds of nationality shall be prohibited
- If you are a member of a European union member state, there should be no discrimination against you on grounds of your nationality by other member states
discrimination definition
in law, the concept of discrimination is about nationality BECAUSE if you’re in the EU trying to create one borderless market, nationality is the feature that you are most keen to have ignored. nationality cant be something that is divisive between countries
principle of proportionality
a fundamental requirement in any decision that the EU is taking on anything.
- all decisions taken by member states, by the EU must be proportionate
- the least onerous way of achieving a legitimate aim
article 5(4) proportionality
the content and form of union action shall not exceed what is necessary to achieve the objectives of the treaties
structure (for purpose of assessments)
1) the topic (establishment, services and goods)
2) what the articles are in the treaty (the rule)
4) principles e.g. proportionality ( how the rule should be applied)
5) cases (arguments that have been hatched in that area - add to our understanding of that it means and how it works)
article 49 TFEU
you cannot restrict people moving their businesses / starting up their businesses / working as self employed people on a permanent basis in other EU member states.
- anyone doing those things has to be treated equally to a national of the member state where they seek to establish themselves
article 49 applies EXCEPT if article 51 TFEU applies to you. (very narrow)
exemption for activities (very high level activities though) in connection with the state
case example: Reyners v Belgium
Reyner was a Dutch national and he wanted to work as a lawyer in Belgium and he was refused permission on the grounds that the role he wanted was in connection with the state.
The court said that “in connection with the state” doesn’t just mean any government job, it doesn’t mean nurses, teachers lawyers… it only means official authority at such a high level that we might think of it as state secret kind of territory e.g. national security risks, working with the queen, high level security intelligence.
article 49 covers:
ESTABLISHMENT:
- self employed people
- businesses
crossing borders to operate in EU member states
to establish yourself: pursue an economic activity through a fixed establishment in another member state aiming for some level of permanence
article 54 (TFEU) defines “companies or firms” as
a company is an operation that is perusing economic profit making, which excludes charities but it doesn’t exclude companies and businesses that make a loss if there intention is profit making
definition of establishment for individuals (natural legal people)
- individuals who want to be in business for themselves
includes professionals, trades people, crafts people - anybody self employed trying to work somewhere else on a permanent or close to permanent basis in another member state
what counts as self employed?
- those involved in setting up and running a business for themselves rather than on behalf of another
articles related to freedom of establishment
- article 49 TFEU
- article 51 TFEU
- article 52 TFEU
- article 56 TFEU
articles related to free movement for services
- article 56 TFEU
- article 52 TFEU
- article 51 TFEU
what is a service (example)
includes receiving services
e.g. somebody in France can receive a service from Germany without ever having themselves crossed a border, then they have engaged freedom to be provided with services across a border without moving.
definition of a service in contrast to an establishment
in contrast with establishment. –> test of regularity, periodicity, continuity.
if you are a service, you are providing services for money and you are temporary
but both an establishment and a service are provided with the intention of making money
what is the point in differentiating service and establishment
- to do with who regulates you
> in establishment cases we us the concept of a HOST member state that you are not a national of where you seek to reside or work, start s business in or move to. if you are trying to establish yourself as a business, what your asking is for your host member state to regulate you
> in service cases, it is the HOME member state who has primary responsibility (and any additional regulation by a host state will have to be carefully justified)
regularity, periodicity and continuity
1) all about how often you go somewhere
2) for how long
3) length of time you stay there for
establishment or service example:
yum yum chocolate plc (Belgium) wants to open a factory in Romania
ESTABLISHMENT ISSUE
why?
it is a big investment- seems permanent
establishment or service example:
a Portuguese security guard is offered 3 weeks work in Malta
SERVICE
why?
temporary (3 weeks) even if it was 3 years it would still be temporary because it is fixed and they would still be going home
establishment or service example:
Leonard is an organ builder from Estonia, Leonard goes to France to refurbish organs. it can take up to 3-6 months to refurbish one organ. Leonard hires a warehouse building in France.
having a warehouse indicates permanence because it is an investment but it doesn’t always exclude you from being a service.
Article 49 covers the freedom to establish yourself, which means operating as a business or a self employed person on a continuous and stable basis, contributing to the economic life of a host member state. CONVERSELY, if this was a service, this would be covered under article 56 as a more temporary operation .
article 49, 56, 51 and 52
article 49: establishment
article 56: services
article 51 ans 52: applies to both
derogations definition
derogation is a legal word for when a law doesn’t apply to your certain situation. it is an allowance to deviate from the law
example of derogation
whenever there is a rule like article 49 of 56 saying freedom of movement is prohibited, there are derogations saying “except in certain circumstances where other things are happening” –> article 52
article 52- derogations
limits on establishing yourself or being a service or receiving a service might be restricted by a member state, in certain circumstances where there is a concern about headline state issues, public policy, public security, and public health.
so if you’re going to tell someone they cant open a business in your EU member state the treaty says it has to be under one of these headings: public policy, public security, and public health.
example when public policy has been misused
an attempt to use public policy by the Greek government who tried to deport a tourist who was arrested for possession because they had a rule that anybody from another member state who committed an offence had to be deported as a matter of public policy. the court said no., that they cant have a rule like that. you can have a rule that deports people but it has to be based on an individuals conduct. although we have derogations, they have to be proportionate and the least onerous way of doing something legitimate (least discriminatory)
- so if you get into trouble, the state has to consider your individual circumstance to apply such an extreme rule. you have to be really dangerous to get yourself deported
public security example
a member of a church of scientology was refused entry on the basis of their links with the church of scientology on the grounds that the country believed it to be unsafe as a matter of public security.
- The court at the time permitted the derogation on the grounds of public security because they agreed that it was a sufficient worry. BUT they have to think about a persons individual conduct, as it is not just a question of being a member of an organisation, you have to be closely linked to the things that they are doing
previous convictions
public health
you can stop movement across borders in situations where there is a serious public health threat. e.g. illnesses with an epidemic - so serious that they are of national importance.
you need evidence of all derogations every time you are trying to stop anything from happening in the single market. what’s the problem with this? things develop v quickly in these situations and people don’t always know. sometimes there hasn’t been enough time. HOWEVER… you can take a precautionary approach
summary of derogations ( how you consider the question of derogations)
- article 52 TFEU for derogations for establishment and services cases
derogations
> must not be used to serve economic ends of the state
> must be based exclusively on personal conduct of the individual (Van Duyn)
> must be genuine, based on sufficiently serious threat (Bouchereau)
> previous criminal convictions shall not, in themselves, constitute grounds for expulsion (Bouchereau)
> all measures must also me proportionate (necessary in pursuit of a legitimate aim)
Direct discrimination (based on nationality)
- direct discrimination: explicit, on the face of it, deliberate discrimination
direct discrimination establishment (art 49)
ships could only fish in UK waters if uk owned and with 75% British crew
court ruled:
- direct discrimination
- on grounds on nationality
- no treaty derogation applied
- restriction could not be justified
case on direct discrimination: commission v UK Factortame
- an establishment case
- Mr Reynes (dutch) was told he couldn’t work in Belgium because not Belgian. the court stated that this kind of rule is explicitly about nationality and it is designed to disadvantage people who are not Belgian.
- within the context of the single market, it cannot be allowed because putting obstacles in the way of these free movement principles.
- in eyes of EU, direct discrimination = offensive to the project
the only way it might be ok is if article 51 applies- as you could say it is in the interest of official activities in connection with the state at the highest levels or if a derogation applies. (public health, security, policy)
direct discrimination articles
direct discrimination on the grounds of nationality is prohibited
- article 49 TFEU - establishment by individuals
- article 54 TFEU - establishment of businesses
- direct discrimination can only be saved by express derogations - in article 52
- or of article 51 exception applies
- article 18 TFEU - generally equal treatment provision that “…any discrimination on grounds of nationality shall be prohibited…”
indirect discrimination
an apparently neutral measure which has the effect of disadvantaging nationals or businesses from non-domestic EU member states
indirect discrimination case:
Gbhard v Milan Bar council
a German qualified lawyer set up a second practice in Italy. He was suspended from practice by the Italian authorities because he used the term “avoccato” without Italian qualifications/registration
court found: this restriction was indirect discrimination that could not be justified in the national interest.
if it was direct discrimination, they would be excluding everyone who is not Italian, however it WOULD be possible for a non Italian person to comply with that rule because you could move from one member state to another and you could become registered and you could do the qualification together. (would be hard but not difficult) Therefore it is indirect discrimination
this is a rule that is intended to exclude people without saying it excludes people.
the only way that direct discriminations is ever ok
is through derogations in ART 52
the only way indirect discrimination is ever ok
all the same rules about direct discrimination apply (“is there a derogation that says for public health / security reasons we must have this rule…”)
- because indirect discrimination is not as offensive as to directly discriminate against people on the grounds of nationality, there are more ways that its ok to have a rule that was more difficult for certain nationalities of people to comply with than for home member state citizens or businesses
- indirect discrimination tends to disadvantage people and is therefore the most damaging kind of discrimination.
- it can exist through all sorts of accidents, mis thinking or deliberately BUT because indirect discrimination is always about there are lots more things that meet the definition of indirect discrimination.
the test to determine if something is a neutral rule
1) ask yourself if it is possible to comply with the rule, even if it is difficult:
yes: indirect discrimination
no: indirect discrimination
2) is there any derogation that’s allowed or a treaty exception (article 52 or 51)
3) if none of these things apply, there is a third avenue which is often where the biggest arguments are had in EU law of the single market: JUSTIFICATION
the object justification test
- Sager test - services (ART 56)
- the Gebhard test- establishment (ART 49)
what is the object justification test (for establishment)
if you do have a truly discriminatory rule that isn’t discriminating against people but it is argued it has a negative impact on people who are not home member state nationals or businesses of goods, a government rule might be allowed if it is impetrative in the general interest. (is there something so important that it would be considered reasonable to impose restriction)
1) is it direct or indirect discrimination - discount it if it is direct discrimination only if derogations apply
2) does the country say it is justified as being imperative in the general interest
3) is what they are doing suitable for securing the objective they pursue (least onerous thing you could do to solve this problem, and has to be effective)
- is what they are doing going to solve the whole problem? what evidence do you have of this being the only way? what are the other options?
