When your neighbour is your enemy, what happens to European integration? Case C 364/10 Hungary v Slovak Republic [2012]

Egle Dagilyte

LLB, LLM, GCAP

PhD candidate at King’s College London and Senior Lecturer in Law at Bucks New University

 

In the judgment, delivered on 16 October 2012, the Court of Justice of the European Union (CJEU) had to resolve a conflict between two Member States that joined the Union in 2004.

What happened?

In this case, Hungary claimed that Slovakia infringed free movement of persons (in particular, Article 21(1) TFEU and the Citizenship Directive 2004/38) by not allowing Mr Sólyom, the Hungarian President, to enter its territory. Slovakia, for its part, stated that this prohibition was valid for one day only – the day of the 41st anniversary of the invasion of Czechoslovakia by Warsaw Pact troops, which included Hungarian troops. In short, the dispute was a conflict of a political nature relating to the soviet history of both Member States, which ended up before the Court as a matter of non-discrimination and free movement of persons under EU law.

Apart from the historical and political context, procedural aspects of the case were also interesting, as indirectly they reflected the European Commission’s attitudes towards current anti-democratic developments in Hungary. Initially, Hungary asked the Commission to bring infringement proceedings before the Court of Justice against the Slovak Republic under Article 258 TFEU.  The Commission considered, however, that the dispute was outside the scope of EU law. Hungary then decided to bring infringement proceedings before the Court of Justice on its own initiative against the Slovak Republic, as authorised by the Treaty (Article 259 TFEU). The Commission decided to intervene in the proceedings in support of the Slovak Republic.

On 6 March 2012 Advocate General AG Bot delivered his opinion, in which he came to the conclusion that the Slovak Republic did not infringe EU law.  The Advocate General considered that “it was indeed in the performance of his duties as the President of Hungary, and not simply as a citizen of the Union, that Mr Sólyom wished to visit the town of Komárno” (para 49). Therefore, the movements of the Heads of State, although made within the Union, fell within the sphere of diplomatic relations that remain within the competences of Member States and were governed by international law, and not by EU law (paras 51-57). The only restriction placed by EU law was the prohibition for Hungary and Slovakia to exercise their diplomatic relations “in a manner that might lead to a lasting break in diplomatic relations between two Member States” (para 58).

The ruling of the Court of Justice

The Court started with the famous statement based on its previous case law that “citizenship of the Union is intended to be the fundamental status of nationals of the Member States” (para 40) and that every person who is a national of an EU Member State is entitled to such a status (para 41), including Mr Sólyom, the Hungarian President. However, the Court stated that “EU law must be interpreted in the light of the relevant rules of international law, since international law is part of the European Union legal order and is binding on the institutions” (para 44). This is an interesting statement in relationship to the recent claims by the Court of the autonomy of the European legal order from international law, which generated extensive legal debates, especially in the context of the UN and EU terrorist lists. The Court went on to distinguish whether, at the time of the expected entry, Mr Sólyom was acting as the Head of State and concluded in the affirmative (paras 45-50). This “specific character” of the EU citizen acting as the Head of State was “capable of distinguishing the person who enjoys that status from all other Union citizens, with the result that that person’s access to the territory of another Member State is not governed by the same conditions as those applicable to other citizens” (para 50). Therefore, Mr Sólyom could rely neither on Article 21 TFEU nor on Directive 2004/38 to gain entry to Slovakia. The Court also rejected Hungary’s argument that Slovakia abused EU rights by relying, during diplomatic communications, on the same Directive when refusing Mr Sólyom’s entry (paras 53-61).

The second and fourth heads of complaint by Hungary related to the future (i.e. hypothetical) infringements of EU law (Article 3 TEU, Article 21 TFEU, Directive 2004/38) by Slovakia. These complaints were rejected as inadmissible. In doing so, the Court pointed to the purpose and nature of the EU law-enforcement procedure under Article 259 TFEU: “as the aim of the Treaty is to achieve the practical elimination of infringements by Member States and the consequences thereof… an action under Article 259 TFEU concerning future possible infringements or limited to seeking an interpretation of EU law is inadmissible.”

The outcome: what does it mean for European integration?

Even though Hungary’s claims on all accounts were dismissed in their entirety, this case was an important one: it was decided by the Court sitting as the Grand Chamber (15 judges). Two important observations could be made.

Firstly, this is only the sixth time in the history of European integration that one Member State has initiated an action for failure to fulfil obligations directly against another Member State.  The enforcement procedure under Article 259 TFEU is rarely used, as Member States generally prefer, for political reasons, to ask the Commission to act under Article 258 TFEU. Of the five earlier cases under Article 259 TFEU, none related to diplomatic relations of Member States and only three were closed by final judgment. These were 141/78 France v United Kingdom (regarding fishing boundaries and the notification of conservation measures), C-388/95 Belgium v Spain (whether the designation of origin “Rioja” wines was Spanish), and C-145/04 Spain v United Kingdom(whether the inhabitants of Gibraltar could participate the European Parliament elections).

Secondly, the use of Article 259 TFEU procedure in diplomatic relations between Hungary and Slovakia illustrates important dynamics for European integration, especially since the enlargements of 2004/2007. Whilst the Court did not refer to AG Bot’s Opinion in its judgment, the Advocate General emphasised that “a lasting break in diplomatic relations between two Member States … would, in fact, be incompatible with the integration process … and would constitute a barrier to the attainment of the essential objectives of the Union, including the aim of promoting peace” (para 58). Interestingly, Hungary and Slovakia are not the only neighbouring Member States that tried solving their diplomatic conflicts through litigation before the Court. One could point out to the recent highly-political Runevic-Vardyn litigation, which touched upon national sensitivities of Poland and Lithuania.

While “my neighbour is my enemy” attitude is not uncommon in the history of European integration (take the initial membership of the UK and the French position as an example), it poses great problems for European project. If Jean Monnet’s vision of the future Europe and the recent Nobel Prize are to mean something, all 27 Member States need to find dialogue not only on political/historical issues, but also on many social and economic ones, which are central for the effective functioning of the Union. Otherwise, in addition to the current economic and Euro crises, we are to face uncertain times, indeed.

 

Note: This article was originally published on 15 November 2012 on the Bucks New University Law Blog (http://bucks.ac.uk/whoswho/school_of_applied_management_and_law/law/blog/c_364_10_hungary_v_slovakia/).

Are European elections truly European?

Nikolay Domanov

LLM, MA in International Relations, Sofia University; Post-Graduate Diploma candidate in EU Competition Law, King’s College London

One of the main criticisms against the European Union (EU) is related to its democratic legitimacy. This is the reason why the Treaty of Lisbon[i] introduced many new instruments aimed at lowering the democratic deficit in the EU, such as the ordinary legislative procedure[ii], the European citizens’ initiative[iii], the European political parties[iv], etc.

Nevertheless, the only European institution comprised of directly elected members remains the European Parliament (EP). If such a scenario is sufficient to establish a strong EU based on the principle of representative democracy is yet to be determined.

Whether the European elections are truly European is a rather difficult question the answer to which may be found by examining the voter turnout and several key aspects of EU electoral legislation.

1. Some history

European elections as they currently exist within the European Union are limited to the European Parliament elections. The construction of this democratic institute, however, evolved over a considerable amount of time.

The Treaty of Paris[v] of 18 April 1951 stipulates the establishment of the General Assembly of the European Coal and Steel Community. It was to consist of 78 members and to meet in Strasbourg. The Treaty of Rome[vi] from 1958 changed these provisions and transformed the General Assembly into Assembly of the European Communities, which was to have jurisdiction with respect to all three Communities. In 1958, this assembly was unofficially named European Parliament. Such title was legally established later by the Single European Act[vii] in 1986.

Until 1979, the Assembly was formed by national parliaments, and individual members exercised dual mandate. Such formation greatly diminished the importance of the Assembly.

The first direct elections to the European Parliament were held in 1979 under the provisions of the Act concerning the election of the members of the European Parliament by direct universal suffrage annexed to the Council decision of 20 September 1976, as amended[viii], in particular Article 14 thereof. This was a significant development in strengthening the only institution formally representing ‘the people of the countries of the European Community’.

2. The current state of play

Under the current legislation, the elections to the EP have been left entirely to individual countries and thus to national parties. Unfortunately, the national parties tend to consider the European campaign to be of secondary importance which decreases the European awareness of the voters in general. Additionally, the popularity of the political parties at European level decreases, too. The latter, however, is about to change as the EP and the Council are currently drafting a new Regulation on the Statute of European Political Parties[ix].

The awareness of Europeans on the European policy issues, on the other hand, is surprisingly low. The commitment of the European electorate to European elections is based mainly on national election platforms, which often focus on issues that are not relevant to the greater European political environment. In addition, national parties are bold enough to openly ignore EU affairs. In this way the European elections will never be able to properly address the EU dimension of politics.

Decisive steps must be taken in order to convince the electorate of the not so obvious fact that a shift in the balance of power among MEPs will result in a change of EU policies. In other words, the voters have to apprehend that it is them who can influence the development of the EU integration process. If achieved, this scenario shall at least in theory lead to an increase of the confidence in EU affairs, and in particular in European parties and politicians. The establishment of a strong and functioning EU must not in any case rely on national politics which may be complicated, but in fact tend to be narrow and quite comfortable to some domestically oriented politicians in comparison to the constantly changing political space at the broader European level.

3. EP elections under the Treaty of Lisbon and representation of EU citizens

According to Article 14, paragraph 2 of the Treaty on European Union (TEU) the number of MEPs shall not exceed 750, plus the President. There is a minimum threshold of 6 members per Member State and the Treaty requires that no Member State shall be allocated more than 96 seats.

Moreover, the TEU provides for a ‘degressively proportional’’ representation of citizens. This principle is an elegant federalist concept according to which the interests of the smaller states are protected by granting smaller countries relatively bigger representation. More precisely formulated, the requirement stipulates that a MEP from a large Member State on average represents more citizens than a MEP from a small Member State. The ‘weighted representation’ of the seats (i.e. the ratio of population to seats) is therefore greater in larger Member States than in smaller ones.

In the 2004 Parliament there were ten countries with too many or too few representatives. In the current Parliament, elected in June 2009, there were nine such countries. Even after the adoption of the 18 additional members of Parliament under the Lisbon Treaty, five ‘inconsistencies’ will remain.

It is important to recognise that the method currently used to allocate seats is actually a political adjustment and, as such, it is in a state of constant turmoil. The obvious major destabilizing factor is the diminishing population of Germany. In the coming decades the population differences will diminish as Germany’s population decreases and the populations of France, the UK and Italy continue to grow. If Germany remains with the maximum number of seats (96) despite its falling population, the next most populous states will have to be given a much larger number of seats than at present. Such an outcome will severely prejudice the interests of the medium sized states, thus jeopardising degressive proportionality. Obviously, this development will be detrimental to, mainly, the interests of medium-size countries.

In the light of those factors it is clear that a well functioning democratic system for allocation of seats in the European Parliament must be established.

4. The electoral right – a key aspect

The European Union has no single definition of citizenship. There is a large variety of national citizenship laws in the Member States. This inevitably reflects on the exercise of voting rights of every European.

However, over the years, significant efforts have been made to achieve a single European electoral act. Under the current rules elections in each Member State shall be held on the basis of universal, equal and direct suffrage by a secret ballot under the rules of the proportional system. General principles valid at European level include: duration of the parliamentary term and rules governing the beginning and the end of the legislature; time of the elections; incompatibility of parliamentary mandate.

The proportional system is applied via national, regional or mixed lists. Member States have the right to determine the threshold, which may not exceed 5% of the validly cast votes in the elections. Voting in Cyprus, Greece, Belgium and Luxembourg is compulsory. It is clear that overcoming the current regional differences and reaching a common European electoral reform will be a very demanding and rather complicated endeavour. It will, no doubt, require political determination.

It is the European Parliament that has every right to seek all possible means of strengthening its authority to the public, becoming the focus of the new European political space. Unfortunately, the search for political legitimacy is undermined by continuing decline in voter turnout, by poor media coverage, by the apathy of the political parties and even by the hidden envy of some national parliaments, driven by the growing powers of the European Parliament. It’s difficult to ignore the fact that turnout in elections is falling steadily from 63.0% in 1979 to 43.1% in 2009.

5. The electoral reform

During the seventh legislature the European Parliament has twice attempted to adopt a modification of the Act concerning the election of the members of the European Parliament by direct universal suffrage. The liberal Andrew Duff on behalf of the Committee of Constitutional Affairs drafted two reports. Finally, they were both rejected, mainly for political reasons. The main proposals included in the first Duff Report[x] are clearly aimed at the expansion of the democratic legitimacy of the European Parliament by strengthening the notion of European citizenship. The core of the proposed changes is, however, the system for seat allocation in the European Parliament.

The main idea of the compromise is to find a fair and legally indisputable method of allocating seats every five years, taking into account different factors such as migration, demographic changes and accession of new Member States. Realistically, and in accordance with its principles, it is the medium-sized states which would primarily lose mandates in the Parliament for the benefit of the larger ones, which will receive more seats. For instance, Bulgaria, Austria and Sweden will lose three seats, whereas Portugal, Czech Republic and Hungary – four. On the contrary, France would get 11 additional seats, UK – 8, Spain – 8 and Italy – 6.

The biggest challenge to be considered is the accession of new Member States. For example, if a country with a relatively small population joins the EU, it would not have such a big impact in comparison with the scenario of a larger country joining the EU. The impact will be twofold. First, the ‘price’ of a single seat will be changed, measured in a number of EU citizens and, second, since the total number of seats is fixed, the seats allocated to the new member must be taken from the current ones. Put simply: the better part of the existing members would lose seats.

In his second report[xi], Andrew Duff considerably reduced the scope of the proposals. The tactic of explicitly stating proposals was transformed into more general language. The second draft report does not mention anything about the ‘Cambridge Compromise’ or another formula for allocation of seats. But it does appeal to the Council to find a ‘common’ formula. Undoubtedly, the starting point would be precisely the formula presented in the ‘Cambridge Compromise’.

The solution – or how the parliamentary seats are allocated

The final decision to determine the number of seats allocated to each Member State shall be taken unanimously by the European Council. It shall act on a proposal adopted by the Parliament. The Lisbon Treaty provides the framework and the specific allocation should be done in accordance with a decision taken before the 2009 elections: the rule adopted in the Protocol № 36 to the Lisbon Treaty. Since the Treaty of Lisbon entered into force later than planned, the 2009 elections and the subsequent allocation of seats were carried out under the provisions of the Treaty of Nice[xii]. A total of 736 MEPs were elected. At its meeting on 18 and 19 June 2009 the European Council took a decision on constituting 18 additional seats. France, Austria and Sweden received two additional seats each. Spain got 4 extra seats and Bulgaria, Italy, Latvia, Malta, The Netherlands, Poland, Great Britain and Slovenia – one each. Under this approach, until the 2014 elections the number of MEPs will be 754.

Unless it comes to a general revision of the Treaty of Lisbon, sooner or later a new system for allocation of seats in the EP shall be established and it is clear that, as analyzed above, it will be aimed against the interests of medium-sized countries.

How exactly the electoral reform is going to take place is an issue with many question marks. It is clear, however, that some reform will take place. That is why both politicians and citizens must be aware of what is about to happen. How European Europe will ultimately be is completely up to the European citizens.

[i] It was signed on 13 December 2007 and entered into force on 1 December 2009.

[ii] Article 294 TFEU.

[iii] Article 11, paragraph 4 TEU.

[iv] According to Article 10(4) of the Treaty on European Union and Article 12(2) of the Charter of Fundamental Rights of the European Union political parties at European level contribute to forming European political awareness and to expressing the political will of citizens of the Union.

[v] Treaty establishing the European Coal and Steel Community (unofficially called the Treaty of Paris) was signed on 18 April 1951 and entered into force on 23 July 1952 and expired on 23 July 2002.

[vi] Treaty establishing the European Economic Community (unofficially called the Treaty of Rome) was signed on 25 March 1957 and entered into force on 1 January 1958.

[vii] It was signed on 17 February 1986 in Luxembourg and on 28 February 1986 in The Hague, and entered into force on 1 July 1987.

[viii] Council Decision 76/787/ECSC, EEC, Euratom (OJ L 278, 8.10.1976, p. 1) as amended by Council Decision 93/81/Euratom, ECSC, EEC (OJ L 33, 9.2.1993, p. 15) and by Council Decision 2002/772/EC, Euratom (OJ L 283, 21.10.2002, p. 1).

[ix] See Proposal for a Regulation of the European Parliament and of the Council on the Statute and funding of European political parties and European political foundations (COM(2012)0499)

[xii] It was signed on 26 February 2001 and entered into force on 1 February 2003.

Case Comment: C-40/11, Yoshikazu Iida [2012] – keeping father and daughter apart?

Adrienne Yong

LL.B (Hons), Dunelm; LL.M (Hons), Lond.


PhD Candidate, the Dickson Poon School of Law, King’s College London


8 November 2012 saw the judgment of an interesting case in the line of development of Union citizenship. Many cases in this area have been made relevant and indeed, been eagerly anticipated by scholars following the seminal C-34/09 Ruiz Zambrano case exactly 1 year and 8 months ago. The principles laid out in that case established an autonomous role for Article 21 TFEU, which sets out the right to free movement and residence. It appears that now it is no longer conditional upon proving a cross-border link with the Treaty but rather on a relatively vague ‘genuine enjoyment’ test. Iida could have played a potentially enlightening role in decrypting this elusive concept, but like its predecessors (see C-434/09 McCarthy and C-256/11 Dereci) the question was clearly distinguished from the facts at hand.

The facts

Mr. Iida is a Japanese national married to German national. They have a daughter who was born in America. She has German, Japanese and American nationality. The family moved to Germany from the USA, upon which Mr. Iida obtained a residence permit as spouse of a Union citizen. He works full-time on unlimited contract. Relations soured between Mr. Iida and his wife (though it is categorically noted not between Mr. Iida and his daughter) prompted by her move to Austria with their daughter where she worked full time. Currently, Mr. Iida and his wife enjoy joint custody though are permanently separated. After separation, however, Germany revoked Mr. Iida’s spousal residence permit. He currently has a work permit subject to discretionary renewal, but wants a residence card of family member of Union citizen. He applied for long-term residence as a third country national, but withdrew this application.

The questions referred relate to the meaning of ‘family member’ under the Citizenship Directive, 2004/38 especially where the applicant does not maintain the Union citizen, nor is the Union citizen accompanied or joined by him. The questions of applicability of the Charter of Fundamental Rights and the European Convention on Human Rights (ECHR) as regards to the national laws in question as well as interpretation of Art 21 TFEU are also in discussion.

The AG’s Opinion

AG Trstenjak provides a comprehensive review of this fairly unique situation, distinctive because the applicant is claiming rights not upon the Member State of his daughter’s residence, but rather her origin. Upon addressing first the application of the Directive, careful analysis of the wording suggests that the circumstances at hand do not, in fact, confer a right of residence on Mr. Iida. This also renders reliance on the Charter and ECHR inapplicable. Although Art 6 TEU guarantees Charter rights and accedes to the ECHR, Art 51(1) of the Charter does not allow recourse to these provisions if there is nothing to link EU law to the situation.

However, AG Trstenjak finds this link through the rights Mr. Iida’s daughter has under Art 20 and 21 TFEU (the citizenship provisions). Whilst it is ‘unclear’ that denial of the residence card would deprive Mr. Iida’s daughter of the genuine enjoyment of the substance of her free movement rights (the Zambrano test), AG Trstenjak states the it would interfere with her rights to free movement if her father were to move further away. This is supported by way of reliance of the rights under Art 8 ECHR and Article 7 Charter (right to privacy and family life) as well as Art 24(3) Charter (child’s rights to a personal relationship and contact with their parents). This interference with Mr. Iida’s daughter’s rights should allow him access to the residence card.

The judgment

The Court of Justice of the European Union (CJEU) is more comprehensive in their assessment of which provisions Mr. Iida cannot satisfy, beginning with rejecting the application of Directive 2003/109 on long-term residency for third country nationals because he withdrew his application.

They continue to then, like AG Trstenjak, to reject application of Directive 2004/38 clarifying that whilst his daughter and wife fall squarely within its remit having moved to Austria, Mr. Iida does not satisfy the definition of ‘dependent family member’ upon his daughter’s rights because she is not reliant on him, but he does come under the spouse definition because separation is not legally synonymous to divorce. However, as it is crucial for him to reside with the Union citizen to benefit, he may not rely on its provisions.

The Court then analyses the validity of the case under Arts 20 and 21 TFEU. It is held that despite not having the residence card Mr. Iida seeks, his family has not been discouraged from the genuine enjoyment of their rights to free movement – they have moved. Therefore, the Court finds that it is incorrect to rely on hypothetical situations of discouragement of movement and arbitrary links with EU law simply to find oneself within the scope of the Treaty. Without a link to the Treaty, there could be no recourse to fundamental rights under the Charter or the ECHR. The Court does not consider the daughter’s rights, thus holding that Mr. Iida did not have rights to the residence card.

Comment

The coherence between AG Trstenjak and the Court is striking, and fairly rational. The slightly unique situation because the dependent (Mr. Iida’s daughter) is not reliant on her father is dealt with in a reasonable manner interpreting the Directive’s provisions. The circumstances stand in contrast to previous case law, namely C-200/02 Zhu and Chen where a third country national mother did derive the right to reside from  her newborn Union citizen baby. However the distinction between this case and that is that Mr. Iida already has residency as a worker, and it is less imperative he “remain” with his daughter as she is not materially ‘dependent’  on him.

The Court also acknowledges there is an exceptional line of case law which allows third country nationals reliance on the rights conferred by the Treaty if the Union citizen would have to leave the EU territory altogether, the Dereci reasoning. The circumstances are not so severe here, thus no rights are conferred. It would insinuate a high threshold as to what constitutes deprivation of the genuine enjoyment of substance of Union citizenship rights.

However, most problematic would be the rejection of the application of fundamental rights because the Court failed to establish a link to EU law. Unlike AG Trstenjak, they refused to stretch their conferral to rights of Mr. Iida’s daughter. The judgment may have turned differently on reasoning in C-148/02 Garcia Avello where hypothetical situations of free movement were invoked as a valid application of the Treaty to allow mutual recognition of double-barrelled surnames, or the more far-reaching C-60/00 Carpenter case where a tenuous link with potential services to be provided overseas prevented a family from being deported.  It is that statement of the judgment which is most puzzling for followers of the developments thus far. Perhaps it suggests a diverging line of reasoning, though is limiting for the scope of Union citizenship’s ‘fundamental status’.

 

Note: This article was originally published on November 9th, 2012 on the EUtopia law blog (http://eutopialaw.com/2012/11/09/case-comment-c-4011-yoshikazu-iida-2012-keeping-father-and-daughter-apart/#more-1604).

New Rules of Procedure of the European Union Court of Justice: what’s new?

dr. Agne Limante 

MA candidate in EU Law, King’s College London; PhD in EU law, Vilnius University; Post-Graduate Diploma in EU Law, King’s College London

 

On 1 November 2012 the New Rules of Procedure of the European Union Court of Justice[i] (“Rules”) will enter into force, introducing both, material and structural changes to the work of the Court. Below, a try is given to take a closer look at the changes. For ease of reference, the structure of analysis follows the new structure of the Rules.

Reasons for changes

According to the preamble of the Rules and the Press release of the Court, in recasting its Rules, the Court seeks primarily to adapt to the changes in its caseload. The former Rules of Procedure, the structure of which has remained fundamentally unchanged since their original adoption in 1953, reflected a preponderance of direct actions. However, the judicial reality revealed it is references for a preliminary ruling that nowadays form the main part of cases brought before the Court[ii].

A second reason relates to the Court’s intention to dispose of the cases within a reasonable period of time[iii]. The new Rules introduce a number of measures that should encourage cases to be dealt with swiftly and efficiently.

Furthermore, the Rules should clarify existing rules and practices and make it easier to use them. A clearer distinction is drawn between the rules that apply to all types of action and those that are specific to each type (references for a preliminary ruling, direct actions and appeals).

Finally, recasting of the Rules simplifies the existing rules, both on a substantive and formal aspect, either by repealing certain rules that are outdated or not applied, or by revising the procedure for dealing with certain cases.

Title I. Organisation of the Court

This Title has not introduced material changes and the main rules remain the same. There were some changes in relation to composition of the Grand Chamber and creation of the function of the Vice-President of the Court (Articles 8, 10 and 27), however, they just reflect recent amendments of the Statute of the Court[iv].

The Rules to some extend simplified the rules on the registry (Article18-22) and brought within a single chapter (Articles 36-42) the rules on languages.

Title II. Common procedural provisions

This is a new Title and it covers all stages of the procedure before the Court, starting from introduction of a case before the Court and until the adoption of Court’s final decision.

One of the new measures include the possibility of the Court to adopt a decision with a view to limiting the length of written pleadings or observations lodged before it. Such decision shall be published in the Official Journal (Article 58).

The new rules also contain several significant innovations in relation to the oral part of the procedure dedicating to it a special chapter (Articles 76-85). If the Court considers on reading the written pleadings or observations lodged by the parties that it has sufficient information, it will, as a rule, no longer be obliged to hold a hearing (saving time). Where a hearing is organised, the Court is given right to invite the parties to concentrate in their oral pleadings on one or more specific issues. Moreover, the Court may organise joint hearings for two or more cases due to their similarity.

The Title also lays down more specific rules on the measures of organization of procedure that can be prescribed by the Court, Judge-Rapporteur and the Advocate General (Article 61-62) as well as sets new rules on the content, signature and service of the orders of the Court (Articles 89-91).

It is interesting to note, that the new Rules kept an article on extension of procedural time limits on account of distance (Article 51, providing that the procedural time-limits shall be extended on account of distance by a single period of 10 days). Though the Court was eager to remove such provision, claiming that nowadays the distance within the EU loses its significance and procedural time limits should not take the distance into account, the Member States were of different opinion strongly supporting such extension.

Title III. References for a preliminary ruling

In relation to preliminary ruling proceedings a separate title was introduced recognising the significance of such type of cases.

The rules of procedure now include a provision setting out the minimum essential content of any request for a preliminary ruling (Article 94; previously contained in Information note on references from national courts for a preliminary ruling[v]) and a rule on anonymity (Article 95), which should assist national courts and tribunals in the formulation of references.

New provision simplifies the procedure leading to the adoption of reasoned order, particularly where the answer to the question referred for a preliminary ruling admits of no reasonable doubt (Article 99). In such cases the Court may at any time, on a proposal from the Judge – Rapporteur and after hearing the Advocate General, decide to rule by reasoned order.

Furthermore, the Rules provide for the possibility for the President of the Court to submit a reference for a preliminary ruling to an expedited procedure on his own motion, when the nature of the case requires that it be dealt with within a short time (Article 105). Expedited procedure until now was only possible at the request of the referring court or tribunal.

There also were some amendments to the urgent preliminary ruling procedure, related to assigning of the case which connected with a pending case to a Judge-Rapporteur (Article 108), and participation in a procedure of a Member State other than that from which the reference is made (Article 109).

In addition, Article 97 clarifies the concept of “party to the main proceedings”, while Articles 115-118 clarifies and simplifies the rules on legal aid.

Title IV. Direct actions

The Title on direct actions mainly targets regulating infringement proceedings against Member States. However, it also applies to the other types of direct actions.

There are several changes and novelties in this area. Firstly, the new Rules from one to two months increased the time limit for lodging the defence (Article 124). Secondly, it granted the President of the Court with a right to specify the matters to which the reply or the rejoinder should relate (Article 126), as well as with a right in exceptional cases to decide on his own motion that a case is to be determined pursuant to an expedited procedure (Article 133). Moreover, as regarding disputes concerning the costs, the Rules provide for assigning of such disputes to a chamber of three or, if the Judge-Rapporteur is not a member of a Chamber of three judges, five judges (Article 145).

The Rules also simplified the provisions relating to the intervention of Member States and European Union institutions (Article 131), as well as clarified the rules on requests and applications relating to judgments and orders (Article 153-159).

Title V. Appeals against decisions of the General Court

In relation to appeals, the new Rules contain a number of new provisions seeking to clarify lodging of appeals and proceeding with such cases

The Rules draw a clearer distinction between the appeal and cross-appeals lodged in response to an initial appeal, and clarify the rules for cross-appeals (Article 176-178). Cross-appeals will now always have to be introduced by a separate document, which is expected to facilitate their subsequent handling by the Court. Furthermore, the Rules clarify that a cross-appeal shall be deemed to be devoid of purpose in case the appellant discontinues his appeal or an appeal is declared manifestly inadmissible due to listed grounds (Article 183):

Article 182, again, seeking to reinforce the efficiency of the Court, provides for a possibility to declare the appeal or cross-appeal is manifestly well founded. This relates to the situations where the Court has already ruled on one or more questions of law identical to those raised by the pleas in law of the appeal or cross-appeal and considers the appeal or cross-appeal to be manifestly well founded.

Additionally, the Rules clarify the conditions on submission of a reply or a rejoinder in appeals (Article 175) and cross-appeals (Article 180), and, as in other titles, rules on legal aid (Article 184-189).

Title VI. Review of decisions of the General Court

With the view to simplify the current review procedure, the Rules provide for the designation, for one year, of a Reviewing Chamber that will consist of a Chamber of five Judges responsible for review cases (Article 191). The proposal to review a decision of the General Court may be made by the First Advocate General (Article 192).

It is worth noting, that the Reviewing Chamber will decide both, on the proposal made by First Advocate General, as well as will rule on the substance of the case after the decision to review (Article 195).

Title VII. Opinions

Just two changes in respect of the requests for opinions under Article 218(11) TFEU (whether the envisaged agreement is compatible with the provisions of the Treaties and to whether the European Union or any institution of the European Union has the power to enter into certain agreement) should be noted here. Firstly, according to Article 197, one, instead of eight, Advocates General, assigned by the First Advocate General, will be taking part in proceedings. Secondly, opinions will be delivered not in closed session, but in open court (Article 200).

Title VIII. Particular forms of procedure

As regarding this last title one would note that all the particular forms of procedure that we previously regulated in separate titles, are now brought under single heading. This should serve for the ease of reference and help to simplify the Rules. The title also inserts a new provision, under the Article 206 – requests under Article 269 TFEU.

Conclusions

To what extend the new Rules will assist the Court to deal with case load and clarify existing rules and practices, shall be seen in the near future as new statistics on Court’s practice will be available. Present, as states the Press release of the Court, the Court nevertheless remains convinced that they offer the best means of enabling the Court to continue to fulfil its task of ensuring that the law is observed in the interpretation and application of the Treaties within a reasonable period of time.

In any case, as for clarification of rules and practice, we have to admit that the structure and organization of the new Rules is much more clearer and easier to use than its predecessor’s. The names were given to articles, provisions are grouped under umbrella headings, the importance of preliminary ruling procedure in the Court’s practice is highlighted by regulating it in separate title.

As regards the dealing with case load, however, the change of Rules of Procedure might not have any material impact. The procedural changes intended for less time consuming dealing with cases that were presented by the Rules are often just a codification of practices that the Court used and before revision of Rules. One might have noted, that the CJEU constantly calls for an increase of judges in the General Court, hoping that more people could handle work quicker and more effective. Thus, the structural, not only procedural changes are probably inevitable in the future – but let’s see what the time brings.

[i]  The Rules of Procedureof the Court of Justice were adopted on 25 September 2012 and published in the Official Journal of the European Union on 29 September 2012 (OL L 265/1).

[ii] In 2011, references for a preliminary ruling accounted for more than 60% of the Court’s caseload.

[iii] The average time taken to deal, for example, with references for a preliminary ruling was 16.4 months in 2011.

[iv] Regulation (EU, Euratom) No 741/2012 of the European Parliament and of the Council of 11 August 2012 amending the Protocol on the Statute of the Court of Justice of the European Union and Annex I thereto. OL L 228.

[v] OJ 2009/C 297/01.

Rethinking Keck and market access test once again. A vicious circle?

dr. Agne Limante 

MA candidate in EU Law, King’s College London; PhD in EU law, Vilnius University; Post-Graduate Diploma in EU Law, King’s College London

 

When in November 1993 the CJEU presented its ruling in Keck case[i], seeking, inter alia, ‘to clarify the law’, academic society reacted to it with a plethora of studies on how to ‘clarify the clarification’[ii]. In that ruling the Court held that French rules prohibiting reselling at loss were not caught by Article 34 TFEU since they related merely to indistinctly applicable ‘selling arrangements’ having no adequate effect on intra-EU trade.

It was clear that the judgement signalled contradiction in the scope of application of EU rules on free movement of goods. As noted by prof. Weatherill, Keck was doubtless intended to empower national courts to dismiss far-fetched attempts to deploy internal market law which was clogging up the EU judicial system with the minutiae of purely local affairs[iii]. However, the borders of such limitation and its content remain blurred until today.

The analysis below will re-think Keck from the position of market access test. It firstly shortly examine the nature of ‘selling arrangements’ introduced by Keck, and later will turn to the discussion on the market access test as an alternative approach to Keck.

Restrictive measures falling under Keck

According to the settled case-law, all trading rules enacted by the Member States which are capable of hindering, directly or indirectly, actually or potentially, trade within the EU are to be considered as measures having an effect equivalent to quantitative restrictions and are, on that basis, prohibited by Article 34 TFEU[iv]. However, according to Keck, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements, within the Member State of importation, is not such as to hinder trade between Member States so long as, first, those provisions apply to all relevant traders operating within the national territory and, secondly, they affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States.

Following the above, while retaining the prohibition of hindrance to market access set in Dassonville and the general non-discrimination requirement, Keck made a distinction between:

(i)    ‘rules that lay down requirements to be met by goods’, related to inherent characteristics of products, and per se are considered to fall under Article 34 TFEU;

(ii)  ‘selling arrangements’, regulating questions extrinsic to goods. They are covered by Article 34 TFEU only if they discriminate against imports;

(iii) ‘residual rules’, as a separate group named in subsequent case-law and doctrine. They fall under Dassonville as affecting intra-EU trade.

Identifying selling arrangements, however, appeared to be a puzzle. Although they seem to cover restrictions on when[v], where and by whom[vi] the goods may be sold, as well as advertising restrictions[vii] and price controls[viii], these general elements hardly allow predicting outcomes in individual cases.

It should also be noted that during last decades the Court increasingly adopted a broad interpretation of indirect discrimination bringing the rules on marketing within the scope of Article 34 TFEU. Indeed, as stated by prof. Spaventa, aside from Sunday-trading type of rules, during the period of 1997-2008, there were only two cases – Burmanjer and A-Punkt – where selling arrangements were found to be non-discriminatory and thus fell outside the scope of Article 34 TFEU[ix].

Market access test as an alternative to Keck

Since Keck received a lot of criticism, there were considerable attemps to reformulate it and to suggest alternatives. The majority suggested market access test to be the panacea.

As  Oliver and Enchelmaier[x] note the most authoritative assault ever mounted against the reasoning in Keck was that of AG Jacobs in Leclerc-Siplec[xi]. He considered that it was inappropriate to make such a rigid distinction between “rules that lay down requirements to be met by goods” and ‘selling arrangements’, and that the test of equality is not in line with the objectives of the Treaty[xii], namely, the establishment of a single market. At the same time AG Jacobs suggested a test aimed at checking whether a measure exerts a substantial restriction on the market access[xiii]. Since Leclerc-Siplec related to partial ban on advertisement (TV advertising), he came to a conclusion that this did not amount to substantial restriction of the market access. However, he also offered an example of direct TV marketing: here prohibition of TV advertising would mean substantial restriction. Comparably, in his opinion in Alpine Investments[xiv] dealing with restriction on ‘cold calling’ potential clients offering financial services, AG Jacobs argued that a question whether a national rule restricts freedom to provide services “should be determined by reference to a functional criterion, that is to say, whether it substantially impedes the ability <…> to provide services”.

Prof. Weatherill[xv] chose another direction stating that prohibition to resale at loss in Keck escaped Article 34 TFEU not because these were rules affecting selling arrangements applied equally in law and in fact, but because they were measures applying equally in law and in fact and exercising no direct impediment to access to market of a Member State. There was no obstruction to the realization of economies of scale and wider consumer choice. Going further, prof. Weatherill also sugests refining Keck test along the following wording: measures introduced by a Member State which apply equally in law and in fact to all goods or services without reference to origin and which impose no direct or substantial hidrance to the access of imported goods or services to the market of that Member State escape the scope of application of Articles 34 and 66 TFEU. Following such suggestion, complete bans on sale of goods or services (as in Schindler[xvi]), even if equally applied, would still have to be justified for having direct and substantial hidrance to market access.

AG Maduro in Alfa Vita[xvii] also stressed market access. He brought to the attention three criteria to be used when deciding on application of Article 34 TFEU. First, discrimination based on nationality must be prohibited. Second, the imposition of supplementary costs on cross-border activity has to be justified. Lastly, the measure will be a hidrance to market access if it impedes to a greater extent access to the market and putting into circulation of products from other Member States than trade on national market.

However, other authors do not see much use in notions such as ‘substantial barrier’ or in introducing other types of treshold. They claim that this would introduce an unwanted de minimis test, while ‘barrier to market access’ criterion is inherently nebulous[xviii]. Even if it is possible to distinguish restrictive rules that have minor effects on intra-EU trade, such as ‘modest effect on sales’,‘purely hypothetical and totally uncertain and indirect effect on market access’[xix], a large grey area is left between ‘minor’ and ‘substantial’.

Use restrictions, Keck and market access

Following Moped trailers[xx] and Mickelsson & Roos[xxi], the contours of Keck seem even more blurred and, again, subject to various interpretations. Both cases were related to the limits of market access and restriction of use – prohibition of towing the motor trailers and prohibition on use of personal watercrafts respectively.

These cases reveal the complexity of the question. AG Bot in Moped trailers case argued that the extension of Keck to measures regulating the use of goods would run against the aims of the internal market. AG Kokot, on the opposite, in Mickelsson & Roos suggested to extend Keck criteria to the use arrangements due to comparable characteristics.

In Moped trailers CJEU re-defined the notion of barriers to intra-EU trade underlining the market access. It stated that “any other measure which hinders access of products originating in other Member States to the market of a Member State is also covered by the [measures having equivalent effect] concept“. The Court reaffirmed this market access formula in Mickelsson & Roos.

Some authors guessed that with this case law the Keck selling arrangements doctrine might have been consigned to history books: though the Court did not openly overrule Keck, the market access formula might suggest, in fact if not in law, the end of the Keck dichotomy[xxii]. The Court made clear that any measure which may impede access to the market falls under Article 34 TFEU. Although distinguishing product-related rules remains necessary, delimitation of selling arrangements looses significance.

It is, however, a bit suprising that the suggested test established no type of threshold or qualifiers to be met by national measure. On the other hand, as noted by prof. Snell, the CJEU seems to focus on the significance of the impact of the measure with all the uncertainties this approach entails, though at the same time refusing to clearly state that rules with insignificant effect fall outside the Treaty[xxiii].

Concluding remarks

Looking from the other side, confronting Keck and market access test, we might be looking for opposition where it does not exist. Keck is about market access. As stated by Wenneras & Boe[xxiv], the CJEU in Moped trailers and Mickelsson & Roos has just consolidated and clarified what was implicit in Keck, namely that Article 34 TFEU prohibits measures that discriminatorily, in law or in fact, restrict market acess for imported products or which prevent/hinder market access.

Nevertheless, it is often hard to identify, which of the elements plays the decisive role in CJEU judgements – market access, discrimination and protectionism, economic freedom. One can have an impression that those tests remain elusive and are often used in an intuitive way, after firstly looking whether discrimination could be established, having in mind the possible justification in certain case and combining this intuition with the general feeling of what is reasonable and logical.

 

[i] Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I‑6097.

[ii] Weatherill. After Keck: Some thoughts on how to clarify the clarification. (1996) 33 CMLRev, p. 885-906.

[iii] Ibid.

[iv] Case 8/74 Dassonville [1974] ECR 837.

[v] Case C-401/92 and C-402/92 Tankstation ’t Heukskeand Boermans [1994] ECR I-2199, Case C-69/93 and C-258/93 Punto Casa and PPV [1994] ECR I‑2355.

[vi] Case C-391/92 Commission v Greece [1995] ECR I‑1621, Case C-387/93 Banchero [1993] ECR I-1085. It is worth noting, that restrictions related to where the product might be sold are captured by selling arrangements if they relate to restrictions on physical location of selling place (pharmacy-shop-district). Selling by internet is given a different treatment. In DocMorris (C-322/01, [2003] ECR I-14887), case concerning prohibition of selling medicines by virtual pharmacies, the CJEU hold the restriction to be de facto discrimination against imports. Internet provided a “more significant way” to market access for sellers established in other Member States.

[vii] Case C-292/92 Hünermund and Others [1993] ECR I-6787; Case C-412/93 Leclerc-Siplec [1995] ECR I-179; Cases C-34/95 to C-36/95 De Agostini [1997] ECR I-3843, Case C-405/98 Gourmet [2001] ECR I-1795. However, often advertising restrictions might have discriminatory aspect. As AG Jacobs insisted in Leclerc-Siplec, “measures that prohibit or severely restrict advertising tend inevitably to protect domestic manufacturers and to disadvantage manufacturers located in other Member States“.

[viii] Case C-63/94 Belgapom [1995] ECR I-2467.

[ix] Spaventa. Leaving Keck behind? The free movement of goods after the rulings in Commission v. Italy and. Mickelsson and Roos. (2009) 34 ELRev. 914-932.

[x] Oliver & Enchelmaier. Free Movement of Goods: Recent Developments in the Case Law. (2007) 44 CMLRev. 649–704.

[xi] Case C-412/93 Leclerc-Siplec [1995] ECR I-179.

[xii] In AG Jacobs words: “If an obstacle to inter-State trade exists, it cannot cease to exist simply because an identical obstacle affects domestic trade”.

[xiii] It is interesting to note, that AG Jacobs in general tends to analyse measures in the light of the scope of their effect. Criticizing locus standi in annulment actions (UPA case), he also suggested a test of “substantial negative effect” for interpretation of individual concern.

[xiv] Case C-384/93 Alpine Investments [1995] ECR I-1141.

[xv] Weatherill. After Keck: Some thoughts on how to clarify the clarification. (1996) 33 CMLRev, p. 885-906.

[xvi] Case C-275/92 Schindler [1994] ECR I‑1039.

[xvii] Joined Cases C-158/04 and C-159/04 Alfa Vita [2006] ECR I‑8135.

[xviii] Oliver & Enchelmaier. Free Movement of Goods: Recent Developments in the Case Law. (2007) 44 CMLRev. 649–704.

[xix] Joined Cases C-418/93, etc Semeraro Casa Uno [1996] ECR I‑2975.

[xx] Case C‑110/05 Commission v Italy [2009] ECR I‑519.

[xxi] Case C‑142/05 Mickelsson and Roos [2009] ECR I‑4273.

[xxii] Spaventa. Leaving Keck behind? The free movement of goods after the rulings in Commission v. Italy and. Mickelsson and Roos. (2009) 34 ELRev. 914-932.

[xxiii] Snell, The Notion of Market Access: A Concept or a Slogan? (2010) 47 CMLRev, p. 437-472.

[xxiv] Wenneras & Boe Moen. Selling arrangements, Keeping Keck. (2010) 35 ELRev. 387 -400.