LEC 2

Question 1

Single market

Answer 1

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

Question 2

freedom of establishment

Answer 2

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

Question 3

free movement of services

Answer 3

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

Question 4

Article 26 of the Treaty on the Functioning of the EU (TFEU)

Answer 4

(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

Question 5

article 26 states that: the things that should be allowed to move are…

Answer 5

goods, people, services (and establishment), capital.

Question 6

article 18 TFEU

Answer 6

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

Question 7

discrimination definition

Answer 7

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

Question 8

principle of proportionality

Answer 8

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

Question 9

article 5(4) proportionality

Answer 9

the content and form of union action shall not exceed what is necessary to achieve the objectives of the treaties

Question 10

structure (for purpose of assessments)

Answer 10

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)

Question 11

article 49 TFEU

Answer 11

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

Question 12

article 49 applies EXCEPT if article 51 TFEU applies to you. (very narrow)

Answer 12

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.

Question 13

article 49 covers:

Answer 13

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

Question 14

article 54 (TFEU) defines “companies or firms” as

Answer 14

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

Question 15

definition of establishment for individuals (natural legal people)

Answer 15

• 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

Question 16

what counts as self employed?

Answer 16

• those involved in setting up and running a business for themselves rather than on behalf of another

Question 17

articles related to freedom of establishment

Answer 17

• article 49 TFEU
• article 51 TFEU
• article 52 TFEU
• article 56 TFEU

Question 18

articles related to free movement for services

Answer 18

• article 56 TFEU
• article 52 TFEU
• article 51 TFEU

Question 19

what is a service (example)

Answer 19

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.

Question 20

definition of a service in contrast to an establishment

Answer 20

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

Question 21

what is the point in differentiating service and establishment

Answer 21

• 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)

Question 22

regularity, periodicity and continuity

Answer 22

1) all about how often you go somewhere
2) for how long
3) length of time you stay there for

Question 23

establishment or service example:
yum yum chocolate plc (Belgium) wants to open a factory in Romania

Answer 23

ESTABLISHMENT ISSUE
why?
it is a big investment- seems permanent

Question 24

establishment or service example:
a Portuguese security guard is offered 3 weeks work in Malta

Answer 24

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

Question 25

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.

Answer 25

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 .

Question 26

article 49, 56, 51 and 52

Answer 26

article 49: establishment
article 56: services
article 51 ans 52: applies to both

Question 27

derogations definition

Answer 27

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

Question 28

example of derogation

Answer 28

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

Question 29

article 52- derogations

Answer 29

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.

Question 30

example when public policy has been misused

Answer 30

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

Question 31

public security example

Answer 31

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

Question 32

previous convictions

Question 33

public health

Answer 33

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

Question 34

summary of derogations ( how you consider the question of derogations)

Answer 34

• 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)

Question 35

Direct discrimination (based on nationality)

Answer 35

• direct discrimination: explicit, on the face of it, deliberate discrimination

Question 36

direct discrimination establishment (art 49)

Answer 36

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

Question 37

case on direct discrimination: commission v UK Factortame

Answer 37

• 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)

Question 38

direct discrimination articles

Answer 38

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…”

Question 39

indirect discrimination

Answer 39

an apparently neutral measure which has the effect of disadvantaging nationals or businesses from non-domestic EU member states

Question 40

indirect discrimination case:
Gbhard v Milan Bar council

Answer 40

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.

Question 41

the only way that direct discriminations is ever ok

Answer 41

is through derogations in ART 52

Question 42

the only way indirect discrimination is ever ok

Answer 42

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.

Question 43

the test to determine if something is a neutral rule

Answer 43

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

Question 44

the object justification test

Answer 44

• Sager test - services (ART 56)
• the Gebhard test- establishment (ART 49)

Question 45

what is the object justification test (for establishment)

Answer 45

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?