European Business Law - Module 1 - Reading Materials

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Conferral and Subsidiarity The Effects of EU Law The Charter of Fundamental rights The Principle of Proportionality

The Principle of Non discrimination The Principle of Legal Certainty

Lecture: Conferral and Subsidiarity

C-210/03 Swedish Snus Case Establishes that any measure genuinely intended to remove any actual orpotential obstacles to the internal market can fall within the competence of theEU.

C-210/03 Swedish Match C-508/08 Vodafone C 376/98 Germany vs. Parliament and Council

Lecture: The Effects of EU Law

C-26/62 Van Gend en Loos



Establishes that provisions of the Treaty Establishing the European EconomicCommunity are capable of creating legal rights which can be enforced by bothnatural and legal persons before the courts of the Community's member states.This is called the principle of direct effect.

C-6/64 Costa vs. ENEL

Establishes the supremacy of European Union law over the laws of its memberstates. This principle requires EU law to have a higher normative value, and hasto be given effect even in the presence of conflicting national norms.

C- 106/89 Marleasing Establishes an obligation for national courts to interpret national law in light of EUlaw, and should, as far as possible, be given an interpretation which is inconformity with EU law (all EU law, not just the one which has direct effect).

Lecture: The Charter of Fundamental rights

C 399/11 Melloni

C-617/10 Åkerberg Fransson C-34/13

Lecture: The Principle of Proportionality

C-523/12 Dirextra Proportionality, appropriate measure

C-58/08 Vodafone C-356/12 Glatzel

Lecture: Non-Discrimination

C-127/07 Société Arcelor Atlantique et Lorraine and Others Principle of equal treatment, objective justification.

C-185/96 Commission vs. Hellenic Republic Direct discrimination on grounds of nationality.

C-25/02 Rinke Indirect discrimination on grounds of sex. Justification on objective requirements.

Lecture: The Principle of Legal Certainty

C-43/75 Defrenne Established that the principle of equal pay between men and women hadhorizontal direct effect. Legal certainty.



Lecture: Conferral and SubsidiaritySuggested Reading:

Basic overview Europa Guide to the Treaties: Division of Competences within the Union

(European Commission, 2010). Available at:http://europa.eu/legislation_summaries/institutional_affairs/treaties/lisbon_treaty/ai0020_en.htm

Europa Guide to the Treaties: The Principle of Subsidiarity (EuropeanCommission, 2010). Available at:http://europa.eu/legislation_summaries/institutional_affairs/treaties/lisbon_treaty/ai0017_en.htm

These pages has a number of links to Treaty articles and other resources whichthe student is encouraged to follow in order to get a basic overview of this topic.

Going deeper Thomas, M. Subsidiarity: assessing an EU Proposal. United Kingdom House of

Lords Select Committee publication, available at:http://www.parliament.uk/documents/lords-committees/eu-select/subsidiarity/apply-subsidiarity.pdf

S R Weatherill, 'The limits of legislative harmonisation ten years after Tobacco German Law Journal 827, available at:

http://www.germanlawjournal.com/index.php?pageID=11&artID=1344(theGerman Law Journal is an open access journal, free to all). Christoph Ritzer, Marc Ruttloff and Karin Linhart, How to Sharpen a Dull Sword

The Principle of Subsidiarity and its Control, 7 German Law Journal 733-760(2006), available athttp://www.germanlawjournal.com/index.php?pageID=11&artID=755

Lecture: The Charter of Fundamental rights Suggested Reading:

Opinion 2/13 (meddelas den 18 december 2014)

Lecture: The Principle of ProportionalitySuggested Reading: Koen Lenaerts och Piet van Nuffel, European Union Law, 3 rd ed, Sweet &

Maxwell, 2009.

Lecture: Non-DiscriminationSuggested Reading:



Basic overview: Eurofond Information Sheet on Discrimination (2014, European Commission)

available at:http://www.eurofound.europa.eu/areas/industrialrelations/dictionary/definitions/discrimination.htm

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order to get a basic overview of those other concepts.

Going deeper: De Schutter, Olivier, Three Models of Equality and European Anti-Discrimination

Law Northern Ireland Legal Quarterly, Vol. 57, no. 1, p. 1-56 (2006) . Available atSSRN: http://ssrn.com/abstract=2446901

Christopher McCrudden and Sacha Prechal The Concepts of Equality and Non-Discrimination in Europe: A practical approach; Report of the European Network

of Legal Experts in the Field of Gender Equality (European Commission, 2009). Available at: http://ec.europa.eu/social/BlobServlet?docId=4553&langId=en







The principle of subsidiarity

INTRODUCTION

The principle of subsidiarity is fundamental to the functioning of the European Union(EU), and more specifically to European decision-making. In particular, the principledetermines when the EU is competent to legislate, and contributes to decisions beingtaken as closely as possible to the citizen.

The principle of subsidiarity is established in Article 5 of the Treaty on European Union. Itappears alongside two other principles that are also considered to be essential toEuropean decision-making: the principles of conferral and of proportionality.

The Protocol on the application of the principles of subsidiarity and proportionality alsodefines the implementation of the principle of subsidiarity. In addition, the Treaty of Lisbon has considerably strengthened the principle of subsidiarity by introducing severalcontrol mechanisms in order to monitor its application.

DEFINITION

The principle of subsidiarity aims at determining the level of intervention that is mostrelevant in the areas of competences shared between the EU and the Member States.This may concern action at European, national or local levels. In all cases, the EU mayonly intervene if it is able to act more effectively than Member States. The Protocol on theapplication of the principles of subsidiarity and proportionality lays down three criteriaaimed at establishing the desirability of intervention at European level:

Does the action have transnational aspects that cannot be resolved by Member States?

Would national action or an absence of action be contrary to the requirements of the Treaty?

Does action at European level have clear advantages?

The principle of subsidiarity also aims at bringing the EU and its citizens closer by

guaranteeing that action is taken at local level where it proves to be necessary. However,the principle of subsidiarity does not mean that action must always be taken at the levelthat is closest to the citizen.

Complementarity with the principles of conferral and of proportionality

Article 5 of the Treaty on European Union defines the division of competences betweenthe Union and the Member States. It first refers to the principle of conferral according towhich the Union has only those competences that are conferred upon it by the Treaties.

Subsidiarity and proportionality are corollary principles of the principle of conferral. They

determine to what extent the EU can exercise the competences conferred upon it by theTreaties. By virtue of the principle of proportionality, the means implemented by the EU in

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order to meet the objectives set by the Treaties cannot go beyond what is necessary.

The Union can therefore only act in a policy area if:

the action forms part of the competences conferred upon the EU by the Treaties(principle of conferral);

in the context of competences shared with Member States, the European level ismost relevant in order to meet the objectives set by the Treaties (principle of subsidiarity);

the content and form of the action does not exceed what is necessary to achievethe objectives set by the Treaties (principle of proportionality).

MONITORING THE PRINCIPLE OF SUBSIDIARITY

Mechanisms to monitor the principle of subsidiarity were put in place by the Protocol onthe application of the principles of subsidiarity and proportionality. The Treaty of Lisbon

reformed the above Protocol in order to improve and reinforce monitoring.

The Protocol, introduced by the Treaty of Amsterdam, provided for compliance withcertain obligations during the actual drafting of legislation. Thus, before proposinglegislative acts, the Commission must prepare a Green Paper. Green Papers consist of wide-ranging consultations. They enable the Commission to collect opinions fromnational and local institutions and from civil society on the desirability of a legislativeproposal, in particular in respect of the principle of subsidiarity.

The Protocol also adds an obligation for the Commission to accompany draft legislativeacts with a statement demonstrating compliance with the principles of subsidiarity andproportionality.

The Treaty of Lisbon innovates by associating national Parliaments closely with themonitoring of the principle of subsidiarity. National Parliaments now exercise twofoldmonitoring:

they have a right to object when legislation is drafted. They can thus dismiss alegislative proposal before the Commission if they consider that the principle of subsidiarity has not been observed (see file “ National Parliaments ”);

through their Member State, they may contest a legislative act before the Court of

Justice of the EU if they consider that the principle of subsidiarity has not beenobserved.

The Treaty of Lisbon also associates the Committee of the Regions with the monitoring of the principle of subsidiarity. In the same way as national Parliaments, the Committee mayalso contest, before the Court of Justice of the EU, a legislative act that does not complywith the principle of subsidiarity.

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Division of competences within the European Union

INTRODUCTION

The Treaty of Lisbon clarifies the division of competences between the European Union(EU) and Member States. It introduces a precise classification for the first time in thefounding Treaties, distinguishing between three main types of competence: exclusivecompetences, shared competences and supporting competences.

This attempt at clarification does not result in any notable transfer of competence.However, this reform is important and vital for the proper functioning of the EU. Severalconflicts of competence have emerged in the past between the EU and Member States.Henceforth, the boundaries between the competences of each are clearly defined. Inaddition, this transparency facilitates the application of the fundamental principles relatingto the control and exercise of these competences.

ABOLITION OF THE PILLARS OF THE EU

One of the most notable changes resulting from the Treaty of Lisbon concerns theabolition of the three-pillar structure of the EU. These pillars were:

the European Community;

the Common Foreign and Security Policy (CFSP);

police and judicial cooperation in criminal matters.

Within this structure, several types of competence were superimposed. Acts adoptedunder the framework of the first pillar were adopted in accordance with the EU’slegislative procedures. In contrast, the other two pillars were based on intergovernmentalcooperation between Member States.

The Treaty of Lisbon puts an end to this complicated structure. The EuropeanCommunity disappears. It is replaced by the EU, which is endowed with legislativeprocedures enabling it to exercise the competences conferred upon it to the full extent.Moreover, the EU also acquires legal personality, which was previously reserved for the

old Community. It is therefore able henceforth to conclude treaties in the fields comingwithin its area of competence.

THE THREE MAIN TYPES OF COMPETENCE

The Treaty on the Functioning of the EU (TFEU) distinguishes between three types of competence and draws up a non-exhaustive list of the fields concerned in each case:

exclusive competences (Article 3 of the TFEU): the EU alone is able to legislateand adopt binding acts in these fields. The Member States’ role is therefore limitedto applying these acts, unless the Union authorises them to adopt certain acts

themselves;

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shared competences (Article 4 of the TFEU): the EU and Member States areauthorised to adopt binding acts in these fields. However, Member States mayexercise their competence only in so far as the EU has not exercised, or hasdecided not to exercise, its own competence;

supporting competences (Article 6 of the TFEU): the EU can only intervene to

support, coordinate or complement the action of Member States. Consequently, ithas no legislative power in these fields and may not interfere in the exercise of these competences reserved for Member States.

SPECIAL COMPETENCES

The EU has special competences in certain fields:

the coordination of economic and employment policies (Article 5 of the TFEU):the EU is responsible for ensuring the coordination of these policies. It is required todefine the broad direction and guidelines to be followed by Member States;

the CFSP (Article 24 of the Treaty on EU): the EU has competence in all fieldsconnected with the CFSP. It defines and implements this policy via, among others,the President of the European Council and the High Representative of the Union for Foreign Affairs and Security Policy , whose roles and status have been recognisedby the Treaty of Lisbon. However, the EU may not adopt legislative acts in this field.In addition, the Court of Justice of the EU does not have competence to give

judgment in this area;

the “ flexibility clause ” (Article 352 of the TFEU): this clause enables the EU to actbeyond the power of action conferred upon it by the Treaties if the objective

pursued so requires. However, this clause is framed by a strict procedure and bycertain restrictions in terms of its application.

THE EXERCISE OF COMPETENCES

The exercise of Union competences is subject to three fundamental principles whichappear in Article 5 of the Treaty on EU. The definition of EU competences greatlyfacilitates the proper application of these principles:

the principle of conferral: the Union has only the competences conferred upon it bythe Treaties;

the principle of proportionality: the exercise of EU competences may not exceedwhat is necessary to achieve the objectives of the Treaties;

the principle of subsidiarity : for shared competences, the EU may intervene only if itis capable of acting more effectively than the Member States;

TRANSFER OF COMPETENCES

The current division of competences between the EU and Member States is not set instone. However, the reduction or extension of EU competences is a delicate matter whichrequires the consent of all Member States and necessitates a revision of the Treaties .


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JUDG MEN T OF 14. 12. 2004 - CASE C 210/03

JUDGMENT OF THE COURT (Grand Chamber)

14 December 2004 *

In Case C-210/03,

REFERENCE for a preliminary ruling under Article 234 EC from the High Court ofJustice of England and W ales, Queen's Bench Division (Administrative Court), madeby decision of 17 April 2003, received at the Court on 15 May 2003, in theproceedings

The Queen on the application of:

Swedish Match AB

Swedish Match UK Ltd

v

Secretary of State for Health

* Language of the case: English.

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SWEDISH MATCH

THE COURT (Grand Chamber),

composed of: V. Skouris, President, P. Jann, C.W.A. Timmermans and K. Lenaerts,Presidents of Chambers, C. Gulmann, J.-P. Puissochet, N . Colneric, S. von Bahr andJ.N. Cunha Rodrigues (Rapporteur), Judges,

Advocate General: L.A. Geelhoed,Registrar: H. von Holstein, Deputy Registrar, and subsequently M.-F. Contet,

Principal Administrator,

having regard to the written procedure and further to the hearing on 8 June 2004,

after considering the observations submitted on behalf of:

— Swedish Match AB and Swedish Match UK Ltd, by G. Barling QC and M.Lester, Barrister, instructed by S. Kon, D. Roy and S. Turnbull, Solicitors,

— the United Kingdom Government, by C. Jackson, acting as Agent, and N. PainesQC and T. Ward, Barrister,

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JUDGMENT OF 14. 12. 2004 — CASE C 210/03

— the French G overnment, by G. de Bergues and R. Loosli-Surrans, acting asAgents,

— the Irish Government, by D.J. O'Hagan, acting as Agent,

— the Finnish Government, by T. Pynnä, acting as Agent,

— the Swedish Government, by A. Kruse, acting as Agent,

— the European Parliament, by J.L. Rufas Quintana and M . Moore, acting asAgents,

— the Council of the European Union, by E. Karlsson and J.-P. Hix, acting asAgents,

— the Commission of the European Communities, by I. Martinez del Peral andN. Yerrell, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 7 September2004,

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SWEDISH MATCH

gives the following

Judgment

1 Th is reference for a prelim inary ruling co nc ern s the validity of Article 8 of Directive2001/37/EC of the European Parliament and of the Council of 5 June 2001 on theapproximation of the laws, regulations and administrative provisions of the Member

States concerning the manufacture, presentation and sale of tobacco products (OJ2001 L 194, p. 26), the interpretation of Articles 28 EC to 30 EC, and thecompatibility with those provisions and with the general principles of Communitylaw of national legislation prohibiting the placing on the market of tobacco productsfor oral use.

2 Th e reference was m ade in the cou rse of proceed ings between Swedish M atch ABand Swedish Match UK Ltd (hereinafter referred to together as 'Swedish Match') andthe Secretary of State for Health concerning the prohibition of the marketing in theUnited Kingdom of tobacco products for oral use.

Legal background

Community legislation

3 Article 8a of Coun cil Directive 89/622/EE C of 13 No vem ber 1989 on theapproximation of the laws, regulations and administrative provisions of the MemberStates con cer nin g th e labelling of tob acc o p rod uc ts (OJ 1989 L 359, p. 1), asamended by Council Directive 92/41/EEC of 15 May 1992 (OJ 1992 L 158, p. 30),

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JUDGM ENT OF 14. 12. 2004 — CASE C 210/03

('Directive 89/622') provides that the Member States are to prohibit the placing onthe market of tobacco for oral use, defined in Article 2(4) of that directive as 'allproducts for oral use, except those intended to be smoked or chewed, made whollyor partly of tobacco, in powder or particulate form or in any combination of these

forms — particularly those presented in sachet portions or porous sachets — or in aform resembling a food product'.

4 The 11th recital in the preamble to Directive 92/41 states that 'it has been provedthat smokeless tobacco products are a major risk factor as regards cancer and ...they should therefore carry a specific warning of that risk'. According to the 12threcital in that preamble, 'scientific experts are of the opinion that the addictioncaused by tobacco consumption constitutes a danger meriting a specific warning onevery tobacco product'.

5 According to the 13th recital in the preamble to Directive 92/41:

'... new tobacco products for oral use which have appeared on the m arket in certainMember States are particularly attractive to young people and ... the Member Statesmost exposed to this problem have already placed total bans on these new tobaccoproducts or intend so to do'.

6 The 14th recital in that preamble states:

',.. regarding such products, there are differences between the laws, regulations andadministrative provisions of the Member States and ... these products thereforeneed to be made subject to common rules'.

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SWEDISH MATCH

7 According to the 15th recital in the preamble:

'... there is a real risk that the new products for oral use will be used above all byyoung people, thus leading to nicotine addiction, unless restrictive measures aretaken in time'.

8 According to the 16th recital in the preamble:

'...in accordance with the conclusions of the studies conducted by the InternationalAgency for Research on Cancer, tobacco for oral use contains particularly largequantities of carcinogenic substances; ... these new products cause cancer of themouth in particular'.

9 According to the 17th recital in the preamble to that directive:

'... the sales bans on such tobacco already adopted by three Member States have adirect impact on the establishment and operation of the internal market; ... it istherefore necessary to approximate Member States' laws, regulations andadministrative provisions in this area, taking as a base a high level of healthprotection; ... the only appropriate measure is a total ban; ... however, such a banshould not affect traditional tobacco products for oral use, which will remain subjectto the provisions of Directive 89/622/EEC, as amended by this Directive, applicableto smokeless tobacco products'.

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10 Article 151(1) of the Act concerning the conditions of accession of the Republic ofAustria, the Republic of Finland and the Kingdom of Sweden and the adjustments tothe Treaties on which the European Union is founded (OJ 1994 C 241, p . 21, and OJ1995 L 1, p. 1, 'the Act of Accession') provides:

'The Acts listed in Annex XV to this Act shall apply in respect of the new MemberStates under the conditions laid down in that Annex.'

1 1 Chapter X, 'Miscellaneous', of Annex XV establishing the list provided for in Article151 of the Act of Accession, provides:

'(a) The prohibition in Article 8a of Directive 89/622/EEC, as amended ...,concerning the placing on the market of the product defined in Article 2(4) of[the] Directive ... shall not apply [in the Kingdom of Sweden . . . ] , with theexception of the prohibition to place this product on the market in a formresembling a food product.

(b) [The Kingdom of Sweden] shall take all measures necessary to ensure that theproduct referred to in paragraph (a) is not placed on the market in the MemberStates for which Directives 89/622/EEC and 92/41/EEC are fully applicable.

..

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SWEDISH MATCH

12 Directive 200 1/37 was ado pted o n the basis of Articles 95 EC and 133 EC andrecasts Directive 89/622 and Council Directive 90/239/EEC of 17 May 1990 on theapproximation of the laws, regulations and administrative provisions of the MemberStates concerning the maximum tar yield of cigarettes (OJ 1990 L 137, p. 36).

13 Acc ording to the 28th recital in the pream ble to Directive 200 1/37 :

'Directive 89/622/EEC prohibited the sale in the Member States of certain types oftobacco for oral use. Article 151 of the Act of Accession ... grants the Kingdom ofSweden a derogation from the provisions of that Directive in this regard.'

1 4 Article 2 of Directive 200 1/37 , hea ded 'Definitions', provides:

'For the purposes of this Directive:

1. tobacco pr od uc ts m ean s pro du cts for the pu rpo ses of sm okin g, sniffing,sucking or chewing, inasmuch as they are, even partly, made of tobacco,whether genetically modified or not;

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JUDGMENT O F 14. 12. 2004 - CASE C 210/03

4. tobacco for oral use means all products for oral use, except those intended tobe smoked or chewed, made wholly or partly of tobacco, in powder or inparticulate form or in any combination of those forms, particularly thosepresented in sachet portions or porous sachets, or in a form resembling a food

product;

...'

15 According to Article 5(4) of tha t directive:

'Tobacco products for oral use, where their marketing is permitted under Article 8,and smokeless tobacco products shall carry the following warning: This tobaccoproduct can damage your health and is addictive .

..'

16 Article 8 of the directive, 'Tobacco for oral use', provides:

'Member States shall prohibit the placing on the market of tobacco for oral use,without prejudice to Article 151 of the Act of Accession ...'

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SWEDISH MATCH

17 Under Article 13(1) of the directive:

'Member States may not, for considerations relating to the limitation of the tar,nicotine or carbon monoxide yields of cigarettes, to health warnings and otherindications or to other requirements of this Directive, prohibit or restrict the import,sale or consumption of tobacco products which comply with this Directive, with theexception of measures taken for the purposes of verifying the data provided underArticle 4.'

18 Article 15 of the directive provides inter alia that Directive 89/622 is repealed andthat references to it are to be construed as references to Directive 2001/37.

National legislation

19 In the United Kingdom, the prohibition provided for in Article 8a of Directive89/622 was transposed into domestic law by the Tobacco for Oral Use (Safety)Regulations 1992 ('the 1992 Regulations').

The main proceedings and the questions referred for a preliminary ruling

20 Swedish Match wished to market in the United Kingdom 'snus', which is finelyground or cut tobacco sold loose or in small sachet portions and intended to beconsumed by placing between the gum and the lip.

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21 Swedish Match wrote to the United Kingdom Department of Health on 18 March2002, setting out the reasons why it considered that the prohibition of the placing onthe market of tobacco products for oral use laid down by the 1992 Regulations wasunlawful. In its reply of 24 April 2002, tha t department stated tha t it considered theprohibition to be lawful. Swedish Match brought proceedings for judicial review on8 May 2002, submitting that the prohibition infringed various provisions ofCommunity law. The High Court of Justice of England and Wales, Queen's BenchDivision (Administrative Court), decided to stay the proceedings and refer thefollowing questions to the Court for a preliminary ruling:

1 . Are Articles 28 EC to 30 EC, applied compatibly with the general principles ofproportionality, non-discrimination and fundamental rights (in particular theright to property), to be interpreted as precluding national legislation whichprohibits any person from supplying, offering or agreeing to supply, exposingfor supply or possessing for supply any product made wholly or partly oftobacco which is either in powder or particulate form or any combination ofthose forms or is presented in a form resembling a food product and is intendedfor oral use other than smoking or chewing?

2. Is Article 8 of Directive 2001/37/EC invalid in whole or in part by reason of:

(a) infringement of the principle of non-discrimination;

(b) infringement of Article 28 EC and /or 29 EC;

(c) infringement of the principle of proportionality;

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SWEDISH MATCH

(d) the inadequacy of Article 95 EC and/or Article 133 EC as a legal basis;

(e) infringement of Article 95(3) EC;

(f ) misuse of powers;

(g) infringement of Article 253 EC and/or the duty to give reasons;

(h) infringement of the fundamental right to property?

3. In circumstances where:

(a) a national measure implementing Article 8a of Directive 89/622/EEC wasadopted in 1992;

(b) the said national measure was adopted pursuant to powers in domestic lawwhich do not depend on the existence of an obligation to implement thedirective;

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JUDGMEN T OF 14. 12. 2004 — CASE C 210/03

(c) Directive 89/622/EEC (as subsequently amended by the Act of Accession ...)is repealed and replaced by Directive 2001/37/EC, Article 8 of which re-enacts Article 8a of Directive 89/622/EEC; and

(d) Article 8 of Directive 2001/37/EC is invalid by reason of the principlesreferred to in questions 2(a), 2(c) or 2(h),

are those principles to be interpreted as also prohibiting the national measure inquestion?'

The applications for leave to submit observations in reply to the Opinion of theAdvocate General and in the alternative for reopening of the oral procedure

22 By act lodged at the Court Registry on 4 October 2004, Swedish Match requestedthe Court:

— to grant it leave to submit written observations following the Opinion of theAdvocate General;

— in the alternative, to order the oral procedure to be reopened, pursuant toArticle 61 of the Rules of Procedure.

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SWEDISH MATCH

23 Swed ish Mat ch wish es t o c om m en t o n the Advo cate Gene ral's suggestio ns relatingto the possibility of mai ntai nin g the effects of Directive 2001 /37 in the even t that theCourt declares it invalid.

24 O n this point, it mus t b e recalled tha t t h e Statute of the C our t of Justice and i t sRules of Procedure make n o provision for th e parties t o sub mit o bservations inresponse t o the Advocate Gen er als Op inio n (see the order in Case C-17/98 EmesaSugar [2000] ECR I-665, paragraph 2). The application for leave t o sub mit writte nobservations in reply t o the Advoc ate G eneral s Opini on is there fore dismissed.

5 Th e Co ur t may also, of its own mo tio n, o n a prop osal from the Advoc ate General, o rat t h e request o f th e parties, ord er t h e reopening of th e oral pro cedur e, inaccordance with Article 61 of the Rules of Procedure, if it considers that it lackssufficient information o r that th e case should be decided o n the basis of an arg um en twhich h a s n o t been debated betwe en t h e parties (see Case C -30 9/9 9 Wouters andOthers [2002] ECR I-1577, par agr aph 42, an d Case C-4 70/ 00 P Parliament v Ripa diMeana and Others [2004] ECR I-4167 , pa ragrap h 33). In th e pre se nt case, however,the Court, after hearing t h e Advoc ate G eneral, considers that i t h as all th einformation necessary for it to answer t h e quest ions referred for a preliminaryruling. T h e application for th e oral proce dure to be reop ened mu st therefore b edismissed.

The questions referred for a prelim inary ruling

Question 2

6 By its second question, which sh ould b e ex am in ed first, t h e natio nal co urt askswhether Article 8 of Directive 2001/37 is invalid in whole or in part by reason ofinfringement of the E C Treaty or of general principle s of Co mm un ity law, o r byreason of misuse of powers.

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JUDG MEN T OF 14. 12. 2004 - CASE C 210/03

The choice of Articles 95 EC and 133 EC as legal bases

7 The question is aimed at determining whether Article 95 EC constitutes anappropriate legal basis for Article 8 of Directive 2001/37, and if so whether recourseto Article 133 EC as a second legal basis for that provision is necessary or possible inthis case.

8 Article 95(1) EC provides tha t the Council is to adopt the measures for theapproximation of the provisions laid down by law, regulation or administrativeaction in Member States which have as their object the establishment andfunctioning of the internal market.

9 In this respect, it should be recalled that, while a mere finding of disparities betweennational rules is not sufficient to justify having recourse to Article 95 EC (see, to thateffect, Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419,paragraph 84), it is otherwise where there are differences between the laws,regulations or administrative provisions of the Member States which are such as toobstruct the fundamental freedoms and thus have a direct effect on the functioningof the internal market (see, to that effect, Germany v Parliament and Council,paragraph 95, and Case C 491/01 British American Tobacco (Investments) andImperial Tobacco [2002] ECR I-11453, paragraph 60).

3 It also follows from the Court's case-law that, while recourse to Article 95 EC as a

legal basis is possible if the aim is to prevent future obstacles to trade resulting fromthe heterogeneous development of national laws, the emergence of such obstaclesmust be likely and the measure in question must be designed to prevent them (see,to that effect, Case C-350/92 Spain v Council [1995] ECR I-1985, paragraph 35,

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Germany v Parliament and Council, paragraph 86, Case C-377/98 Netherlands vParliament and Council [2001] ECR I-7079, para grap h 15, and British AmericanTobacco (Investments) and Imperial Tobacco, paragraph 61).

31 The Cou rt has also held that, where the conditions for recourse to Article 95 EC as alegal basis are fulfilled, the Community legislature cannot be prevented from relyingon that legal basis on the ground that public health protection is a decisive factor inthe choices to be made {British American Tobacco (Investments) and ImperialTobacco, paragraph 62).

32 It shou ld also be no ted that the first sub par agra ph of Article 152(1) EC provide s thata high level of protection of human health is to be ensured in the definition andimplementation of all Community policies and activities, and that Article 95(3) ECexpressly requires that, in achieving harmonisation, a high level of protection ofhuman health should be guaranteed (British American Tobacco (Investments) andImperial Tobacco, paragraph 62).

33 It follows from th e foregoing tha t, whe re ther e are obstacles to trade or it is likelythat such obstacles will emerge in future because the Member States have taken orare about to take divergent measures with respect to a product or a class of productssuch as to ensure different levels of protection and thereby prevent the product orproducts concerned from moving freely within the Community, Article 95 ECauthorises the Community legislature to intervene by adopting appropriatemeasures, in compliance with Article 95(3) EC and with the legal principlesmentioned in the Treaty or identified in the case-law, in particular the principle ofproportionality.

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SWEDISH MATCH

38 As the market in tobacc o produc ts is one in which trade between M em be r Statesrepresents a relatively large part (see British American Tobacco (Investments) andImperial Tobacco, paragraph 64), those prohibitions of marketing contributed to aheterogeneous development of that market and were therefore such as to constitute

obstacles to the free movement of goods.

39 Having regard also to the public's grow ing aw arene ss of the dange rs to health of the

consumption of tobacco products, it was likely that obstacles to the free movementof those products would arise by reason of the adoption by the Member States ofnew rules reflecting that development and intended more effectively to discourageconsumption of those products (British American Tobacco (Investments) andImperial Tobacco, paragraph 67).

40 Article 8 of Directive 200 1/37 was ado pted in a con text which, from the poin t ofview of obstacles to the free movement of goods existing in the market for tobaccoprod ucts as a result of the hetero gene ous deve lopm ent of cond itions of ma rketing oftob acc o prod uc ts for oral use in the various Me m be r States, was no different fromthat which existed when Article 8a of Directive 89/622 was adopted. It should beadded that the Act of Accession cannot have any bearing on the assessment of thatcontext. That Act not only excluded the Kingdom of Sweden from the scope ofArticle 8a, it also required that Member State to take all necessary measures toensure that tobacco products for oral use were not placed on the market in the otherMember States.

4 1 Action by the C om m un ity legislature on th e basis of Article 95 EC was thereforejustified with respect to tobacco products for oral use.

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42 I t follows from th e foregoing tha t the prohi bit ion i n Article 8 o f Directive 200 1/3 7could b e adopted o n th e basis of Article 9 5 EC. I t will have t o b e exam ined belowwhether the adoption o f tha t mea su re c omp lie d with Article 95(3) EC and th e legalprinciples referred to in the nat ional court 's questi ons.

43 As regar ds th e que sti on wh eth er recou rse to Article 133 EC as a se co nd lega l basis ofArticle 8 was necessary o r possible i n the p res en t case, i t suffices t o recall that i nparagraph 97 of British American Tobacco (Investments) and Imperial Tobacco theCourt considered that Article 95 EC constituted the only appropriate legal basis forDirective 2001/37 and that i t was incorrect for it t o cite Articl e 133 EC a s well.

44 However, th at inc orr ect reference t o Arti cle 133 EC a s a se co nd legal basis for t ha tdirective does n o t o f itself mea n th at t h e directive is invalid (British AmericanTobacco (Investments) and Imperial Tobacco, para grap h 98). Such a n error in thecitations o f a Com mun i ty act i s n o more than a pur ely form al defect, unl ess i t gaverise to irregularity in the procedure applicable to the adoption of that act (see, to thateffect, Case 165/87 Commission v Council [1988] ECR 5545, paragraph 19, andJoined Cases C 184/02 and C-223/02 Spain and Finland v Parliament and Council[2004] ECR I-7789, paragraph 44). The Court went on to hold, in paragraph 111 ofBritish American Tobacco Investments) and Imperial Tobacco, that recourse to thetwofold legal basis of Articles 95 EC and 133 EC did not give rise to irregularity inthe procedure for adopting the directive and that the directive was not invalid onthat account.

45 Accordingl y, Article 8 of Directive 2001 /37 is not invalid o n account o f lack of a nappropriate legal basis.

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SWEDISH MATCH

Article 95(3) EC and the principle of proportionality

46 Article 95(3) EC provi des tha t bo th th e Co mmi ss io n and also the Par lia ment and t heCouncil a r e t o take a s a base a high level of protect ion o f hu ma n health , takingaccount in particular of any new develo pmen t based o n scienti fic facts.

47 I t sho uld also be bor ne in mi nd that th e princ iple of prop ortio nalit y, w hic h is on e ofthe general principles of Co mm un it y law, requires that meas ures imp lem ent edthrough Community provisions are appropriate for atta inin g the objective pu rs ue dand must not go beyond what is necessary t o achieve it (see, in te r alia, Ca se 13 7/ 85Maizena [1987] ECR 4587 , par agr aph 15; Case C-3 39/ 92 ADM Ölmühlen [1993]ECR I - 6 4 7 3 , paragraph 15 ; a n d Case C-210/00 Käserei Champignon Hofmeister[2002] ECR I - 6 4 5 3 , paragraph 59).

48 Wi th regard t o judicial review o f th e cond ition s referred to in th e previousparagraph, the Community legislature must be allowed a broad discretion in an areasuch a s that co ncern ed in the pr ese nt case, whic h involves political, ec on om ic an dsocial choices o n i t s part, a n d i n which it is called o n t o under take comple xassessments. Only if a measure adopted in th is field is manifestly in appr opri ate inrelation t o th e objective whi ch the co mp et en t inst itut ion s are seekin g to purs ue canthe lawfulness of such a me as ur e be affected (see, to tha t effect, Case C-8 4/ 94 UnitedKingdom v Council [1996] ECR I-5755, par agr aph 58; Case C-2 33/ 94 Germany vParliament and Council [1997] ECR I-2405, par ag rap hs 5 5 an d 56; Case C-157/96National Farmers Union and Others [1998] ECR I - 2 2 11 , parag raph 61 ; and BritishAmerican Tobacco (Investments) and Imperial Tobacco, pa rag rap h 123).

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JUDGMENT O F 14. 12. 2004 - CASE C 210/03

49 With regard to Article 8a inserted in Directive 89/622 by Directive 92/41, it isapparent from the preamble to the latter directive that the prohibition of themarketing of tobacco products for oral use was the only measure that appearedappropriate to cope with the real danger that those new products would be used byyoung people, thus leading to nicotine addiction, with those products causing cancerof the mouth in particular.

50 Swedish Match essentially submits that, having regard to the state of the scientificinformation available to the Community legislature in 2001, when Article 8 ofDirective 2001/37 was adopted, on which it moreover relied in amending the rulesgoverning the warning referred to in Article 5(4) of that directive, maintenance ofthe prohibition of marketing tobacco products for oral use was disproportionate inrelation to the objective pursued and did not take account of the development ofthat scientific information.

51 The answer to that argument must be that, while some experts could from 1999 callinto question the assertion that, as the 16th recital in the preamble to Directive92/41 puts it, 'these new products cause cancer of the mouth in particular', allcontroversy on that point was not eliminated at the time of adoption of Directive2001/37. Moreover, while part of the scientific community accepted that tobacco

products for oral use could be used as substitute products for cigarettes, anotherpart challenged the correctness of such a position. From that situation it must beinferred that the scientific information which could have been available to theCommunity legislature in 2001 did not allow the conclusion that consumption ofthe products in question presented no danger to human health.

52 Moreover, like all other tobacco products, those for oral use contain nicotine, whichcauses addiction and whose toxicity is not disputed.

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SWEDISH MATCH

53 Now, first, it had not been shown at the time of adoption of Directive 2001/37 thatthe harmful effects of those products were lesser in that regard than those of othertobacco products. Second, it had been shown that they presented serious risks tohealth, which the Community legislature had to take into account.

54 In those circumstances, it cannot be maintained that, contrary to the provisions ofArticle 95(3) EC, the prohibition which follows from Article 8 of Directive 2001/37was laid down without account being taken of the development of scientificinformation.

55 Moreover, nothing that has been submitted to the Court allows the view to be takenthat tobacco products for oral use were not products new to the market of theMember States as it existed at the time of adoption of Directive 92/41.

56 To satisfy its obligation to take as a base a high level of protection in health matters ,in accordance with Article 95(3) EC, the Community legislature was thus able,without exceeding the limits of its discretion in the matter, to consider that aprohibition of the marketing of tobacco products for oral use was necessary, and inparticular that there was no alternative measure which allowed that objective to beachieved as effectively.

57 As the Advocate General observes in points 116 to 119 of his Opinion, no othermeasures aimed at imposing technical standards on manufacturers in order toreduce the harmful effects of the product, or at regulating the labelling of packagingsof the product and its conditions of sale, in particular to minors, would have thesame preventive effect in terms of the protection of health, inasmuch as they wouldlet a product which is in any event harmful gain a place in the market.

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58 I t follows from t he above consid erati ons that, with respec t bo th to the objective ofensuring a high level of protection of hu ma n health given t o t he Communitylegislature by Article 95(3) EC and to its obligation to comply with the principle o fproportionali ty, t h e contested pr ohibit ion cann ot b e regarded as manifestly

inappropriate.

Article 28 EC and /or Article 29 EC

59 It is settled case-law that t h e prohibit ion of quantitative restrictions a n d measur eshaving equivalent effect laid down by Articles 28 EC a nd 29 EC applies n o t only t onational measures but also to measu res adop ted by the Co mm un it y institutions (seein particular, to th at effect, Case 1 5/8 3 Denkavit Nederland [1984] ECR 217 1,

paragraph 15; Case C-51/93 Meyhui [1994] ECR I-3879, pa rag rap h 11; a n d CaseC-114/96 Kieffer and Thill [1997] ECR I-3629, pa ragraph 27).

6 Nevertheless, as Article 30 EC provides, the provisions of Artic les 28 EC an d 29 ECdo not preclude prohibitions o r restrictions o n imports, exports o r goods in transitjustified inter alia o n grounds of protection of th e hea lth an d life of humans.

61 Wh ile the pro hibi tion of marketing tobacco p roducts for oral use un de r Article 8 ofDirective 2001/37 constitutes on e of th e restrict ions referred to in Articles 28 ECand 29 EC , it is nevertheless justified, as indicated in paragraph 58 above, o ngrounds of the protection of hu ma n health. I t cannot therefore, in any event, b eregarded as having been a dopte d in breach of the provisions of Articles 28 EC an d29 EC.

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SWEDISH MATCH

62 M o r e o v e r, t h e p r o h i b i t i o n i m p o s e d o n t h e K i n g d o m o f S w e d e n o n p l a c i n g t o b a c c oproducts for oral use on the markets of the other Member States derives from theprovisions of point (b) of Chapter X of Annex XV to the Act of Accession, not thoseof Directive 2001/37.

Article 253 EC

63 It m ust be bo rne in m ind that, while the state m en t of reas ons required by Article253 EC must show clearly and unequivocally the reasoning of the Communityauthority which adopted the contested measure, so as to enable the personsconcerned to ascertain the reasons for it and to enable the Court to exercise judicialreview, it is not required to go into every relevant point of fact and law (see, interalia, Case C 122/94 Commission v Council [1996] ECR I-881, paragraph 29).

64 Furth erm ore, the question wh ethe r a statem ent of reasons satisfies the requ irem entsmust be assessed with reference not only to the wording of the measure but also toits context and to the whole body of legal rules governing the matter in question. Ifthe contested measure clearly discloses the essential objective pursued by theinstitution, it would be excessive to require a specific statement of reasons for eachof the technical choices made by the institution (see, in particular, Case C 100/99

Italy v Council and Commission [2001] ECR I-5217, para grap h 64, and, to that

effect, Spain and Finland v Parliament and Council, paragraph 79).

65 Th e recitals in the pream ble to Directive 92 /41 set out clearly the reason s why ameasure prohibiting the marketing of tobacco products for oral use was to beintroduced in Directive 89/622. In particular, after recalling that scientific expertswere of the opinion that all tobacco products entail dangers to health and that it hadbeen proved that smokeless tobacco products were a major risk factor as regardscancer, the pream ble further stated that new tobacco p rod ucts for oral use appearingon the m arket in certain M em be r States were particularly attractive to young p eople,

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with the risk of their developing an addiction to nicotine if restrictive measures werenot taken in time. It was also observed that the Member States most exposed to thatproblem had already placed total bans on those new products or intended to do so.

66 I t should also b e s ta ted tha t t h e p roh ib i t ion of marke t ing tobacco p rod uc t s fo r oraluse laid down in Art icle 8 of Di rec t ive 2001/37 is confined, i n t h e con tex t of th erecas t ing of ear l ier provision s wh ich co nst i tu tes on e o f t h e objects of th at directive,

to confirming t h e ident ica l me asu re ado pted i n 1992 . T he different t re at m en treserved in 1992 for t hose p roduc t s as o p p o s e d t o o ther smokeless tobacco productsw as t h e resu l t of c i rcum stanc es re la t ing t o t he novel ty o n t h e in te rna l market a t th et i m e o f th e products affected by t he p rohib i t ion , the i r a t t rac t ion for young people ,a n d t h e ex is tence of na t ional prohib i t ive measu res in cer ta in Me m be r S ta tes .

67 Those circumstances remained the same in 2001. Admittedly, it is common groundthat the marketing of tobacco products for oral use has a long tradition in Swedenand that those products could not be regarded as new to the m arket correspondingto the territory ofthat Member State on its accession in 1995. However, since Article151 of the Act of Accession precisely excluded the Kingdom of Sweden from thescope of the prohibition adopted in 1992, the territory ofthat State cannot be takeninto account for the determination of the market referred to in Article 8 of Directive2001/37 or, consequently, for the assessment with respect to that market of thenovelty of the products whose marketing is prohibited the re in accordance with thatarticle.

68 Since Directive 2001/37 specifies, in the 28th recital in its preamble, tha t Directive89/622 prohibited the sale in the Member States of certain types of tobacco for oraluse and that Article 151 of the Act of Accession granted the Kingdom of Sweden a

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SWEDISH MATCH

derogation from the provisions of the latter directive, it does not appear that theconfirmation of that prohibition in Article 8 of Directive 2001/37 required thatdirective to specify other relevant points of fact and law in order to satisfy theobligation to state reasons under Article 253 EC.

69 Accordingly, Article 8 of Directive 2001/37 complies with the obligation to statereasons set out in Article 253 EC.

The principle of non-discrimination

7 It is settled case-law that the principle of equal treatment requires that comparablesituations must not be treated differently and that different situations must not betreated in the same way unless such treatment is objectively justified (see, to thateffect, Case C 304/01 Spain v Commission [2004] ECR I-7655, paragraph 31).

71 Although tobacco products for oral use, as defined in Article 2 of Directive 2001/37,are not fundamentally different in their composition or indeed their intended usefrom tobacco products intended to be chewed, they were not in the same situationas those products. The tobacco products for oral use which are the subject of theprohibition laid down in Article 8a of Directive 89/622 and repeated in Article 8 ofDirective 2001/37 were new to the markets of the Member States referred to in thatmeasure. That particular situation thus authorised a difference in treatment, and itcannot validly be argued that there was a breach of the principle of non-discrimination.

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The principle of freedom to pursue a trade or profession and the right to property

72 Ac co rd ing t o t he case-law o f t he C our t , t h e f r eedom t o p u r s u e a t r ade o r profession,like t h e r igh t t o p roper ty, i s o n e of th e genera l pr inc ip les of Co mm un i ty law. Tho sepr inc ip les a r e n o t absolute r ights , however, b u t m u s t b e cons ide red in re la t ion t otheir social funct ion. Consequently, restr ict ions m a y b e i m p o s e d o n t h e exercise o fthe f reedom t o p u r s u e a t r a d e o r profession, a s on the exercise of the r igh t t oproper ty, provided tha t t h e res t r ic t ions in fac t cor respond t o objectives of generalin teres t a n d d o n o t cons t i t u t e , in re lat ion to th e a im p u r s u e d , a d i sp ropor t iona te a n din to lerable in ter ference , impai r ing t h e very subs tance o f th e r igh ts guaranteed (see ,inter al ia , Case 265/87 Schröder [1989] E C R 2237 , pa rag raph 15 ; Case C-2 80/9 3Germany v Council [1994] E C R I -4973, paragraph 78; Case C-293/97 Standley andOthers [1999] E C R I -2603, p a r a g r a p h 54 ; Joined Case s C-3 7/0 2 a n d C -38 /02 DiLenardo and Dilexport [2004] E C R I -6911, p a r a g r a p h 82 , an d Spain and Finland vParliament and Council, p a r a g r a p h 52 ) .

73 The prohibition on the marketing of tobacco products for oral use laid down inArticle 8 of Directive 2001/37 is indeed capable of restricting the freedom ofmanufacturers of such products to pursue their trade or profession, assuming thatthey have envisaged such marketing in the geographical region concerned by thatprohibition. However, the operators' right to property is not called into question bythe introduction of such a measure. No economic operator can claim a right toproperty in a market share, even if he held it at a time before the introduction of ameasure affecting that market, since such a market share constitutes only amomentary economic position exposed to the risks of changing circumstances (CaseC-280/93 Germany v Council paragraph 79). Nor can an economic operator claim

an acquired right or even a legitimate expectation that an existing situation which iscapable of being altered by decisions taken by the Community institutions withinthe limits of their discretionary power will be maintained (see Case 52/81 Faust vCommission [1982] ECR 3745, paragraph 27).

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SWEDISH MATCH

74 As s t a t ed abov e , Di rec t ive 20 01 /37 pu rsu es an ob jec t ive in the gen era l in te re s t byen su r in g a h igh l eve l o f p r o te c t io n o f hea l th in the con tex t o f th e ha rm on isa t io n o fthe provisions applicable to the placing on the market of tobacco products. It doesnot appear, as indicated in paragraph 58 above, that the prohibition laid down in

Article 8 of that directive is inappropriate to that objective. In those circumstances,the obstacle to the freedom to pursu e an econ om ic activity constituted by a m easureof such a kind cannot be regarded, in relation to the aim pursued, as adisproportionate interference with the exercise of that freedom or with the rightto property.

Alleged misuse of powers

75 As the Co urt has repeatedly held, a m eas ure is vitiated by misu se of pow ers only if itappears on the basis of objective, relevant and consistent evidence to have been

taken with the exclusive or main purpose of achieving an end other than that statedor evading a procedure specifically prescribed by the Treaty for dealing with thecircumstances of the case (see Case C 331/88 Fedesa and Others [1990] ECR I-4023,paragraph 24, and Case C 110/97 Netherlands v Council [2001] ECR I-8763,paragraph 137).

76 W ith regard in particu lar to the express exclusion of any ha rm on isatio n of the lawsand regulations of the Member States designed to protect and improve humanhealth laid down in the first indent of Article 129(4) of the EC Treaty (now, afteramendment, the first subparagraph of Article 152(4) EC), the Court has held thatother articles of the Treaty may not be used as a legal basis in order to circumventthat exclusion (Case C-376/98 Germany v Parliament and Council, paragraph 79).The Court has, however, stated that, provided that the conditions for recourse toArticle 95(1) EC as a legal basis are fulfilled, the Community legislature cannot beprevented from relying on that legal basis on the ground that the protection ofpublic health is a decisive factor in the choices to be made (Case C-376/98 Germanyv Parliament and Council, paragrap h 88, and British American Tobacco(Investments) and Imperial Tobacco, paragraph 190).

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77 First, t h e cond i t i ons fo r r e c o u r s e t o Ar t ic le 9 5 EC w er e fulfilled i n t h e case o f Ar t ic le8 of Di rec t ive 20 01/3 7 a n d , s econd , i t h a s n o t bee n sho wn tha t tha t p rovis ion w a sadop ted wi th t h e exclusive o r m a i n p u r p o s e o f ach iev ing a n object ive ot he r th an th atof e l imina t ing t h e bar r ie rs t o t r ade conn ec t ed w i th t h e h e t e r o g e n e o u s d e v e l o p m e n t

of nat ional laws o n t o b a c c o p r o d u c t s fo r oral u se .

78 Accordingly, Article 8 of Directive 2001/37 is not invalid by reason of misuse ofpowers.

The answer to Question 2 taken as a whole

79 The answer to Question 2, taken as a whole, must be that consideration of tha tquestion has not disclosed any factor of such a kind as to affect the validity of Article8 of Directive 2001/37.

Question 1

80 By its first question, the national court essentially asks whether Articles 28 EC and29 EC must be interpreted as precluding national legislation such as tha t at issue inthe main proceedings.

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SWEDISH MATCH

81 It should be borne in mind that, in a field which has been exhaustively harmonisedat Community level, a national measure must be assessed in the light of theprovisions of that harmonising measure and not of those of primary law (see CaseC-37/92 Vanackerand Lesage [1993] ECR I-4947, paragraph 9, and Case C-324/99

DaimlerChrysler [2001] ECR I-9897, paragraph 32).

8 Since the marketing of tobacco products for oral use is a question that is regulated ina harmonised manner at Community level, the national legislation at issue in the

main proceedings which, duly transposing the Community legislation, prohibits themarketing of those products may thus be assessed with regard only to the provisionsof that Community legislation, not to those of Articles 28 EC and 29 EC.

83 In the light of the above considerations, the answer to Question 1 must be that,where a national measure prohibits the marketing of tobacco products for oral usein accordance with the provisions of Article 8 of Directive 2001/37, there is no needto ascertain separately whether that national measure complies with Articles 28 ECand 29 EC.

Question 3

84 By its third question, the national court essentially asks whether, in the event thatArticle 8 of Directive 2001/37 is invalid, the principles of non-discrimination,proportionality and the protection of the right to property should be interpreted asprecluding a national measure prohibiting tobacco products for oral use.

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JUDGM ENT OF 14. 12. 2004 - CASE C 210/03

85 There is no need to answer this question, since, as stated in paragraph 79 above,consideration of Question 2 has not disclosed any factor of such a kind as to affectthe validity of Article 8 of Directive 2001/37.

Costs

86 Since these proceedings are, for the parties to the main proceedings, a step in theaction pending before the national court, the decision on costs is a matter for thatcourt. Costs incurred in submitting observations to the Court, other than the costsof those parties, are not recoverable.

On those grounds, the Court (Grand Chamber) rules as follows:

1. Consideration of the second question has not disclosed any factor of such akind as to affect the validity of Article 8 of Directive 2001 37 EC of theEuropean Parliament and of the Council of 5 June 2001 on theapproximation of the laws regulations and administrative provisions ofthe Member States concerning the manufacture presentation and sale oftobacco products.

2. Where a national measure prohibits the marketing of tobacco products fororal use in accordance with the provisions of Article 8 of Directive 2001 /37there is no need to ascertain separately whether that national measurecomplies with Articles 28 EC and 29 EC.

Signatures.

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JUDGMENT OF THE COURT (Second Chamber)

28 October 2010 (*)

(Failure of a Member State to full obligations – Freedom to provide maritime transportservices – Regulation (EEC) No 3577/92 – Articles 1 and 4 – Cabotage services within aMember State – Obligation to conclude public service contracts on a non-discriminatory

basis – Conclusion of an exclusive contract, without a prior call for tenders, before the dateof accession of a Member State to the European Union)

In Case C!508/08,

ACTION under Article 226 EC for failure to full obligations, brought on 20 November2008,

European Commission , represented by J. Aquilina and K. Simonsson, acting as Agents,with an address for service in Luxembourg,

applicant,

v

Republic of Malta , represented by S. Camilleri, L. Spiteri and A. Fenech, acting as Agents,

defendant,

THE COURT (Second Chamber),

composed of J.N. Cunha Rodrigues, President of the Chamber, A. Arabadjiev, U. Lõhmus(Rapporteur), A. Ó Caoimh and P. Lindh, Judges,

Advocate General: E. Sharpston,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 11 May 2010,

after hearing the Opinion of the Advocate General at the sitting on 1 July 2010,

gives the following

Judgment

1 By its application, the Commission of the European Communities has asked the Court todeclare that, by signing an exclusive public service contract with Gozo Channel Co. Ltd(‘GCCL’) on 16 April 2004, without having undertaken a prior call for tenders, the Republicof Malta has failed to full its obligations under Council Regulation (EEC) No 3577/92 of

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7 December 1992 applying the principle of freedom to provide services to maritimetransport within Member States (maritime cabotage) (OJ 1992 L 364, p. 7), in particularArticles 1 and 4 thereof.

Legal context

Act of Accession

2 Article 2 of the Act concerning the conditions of accession of the Czech Republic, theRepublic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, theRepublic of Slovenia and the Slovak Republic and the adjustments to the Treaties on whichthe European Union is founded (OJ 2003 L 236, p. 33; ‘the Act of Accession’) provides:

‘From the date of accession, the provisions of the original Treaties and the acts adopted bythe institutions and the European Central Bank before accession shall be binding on the new

Member States and shall apply in those States under the conditions laid down in thoseTreaties and in this Act.’

Regulation No 3577/92

3 Article 1(1) of Regulation No 3577/92 provides:

‘As from 1 January 1993, freedom to provide maritime transport services within a MemberState (maritime cabotage) shall apply to Community shipowners who have their shipsregistered in, and ying the ag of, a Member State, provided that these ships comply withall conditions for carrying out cabotage in that Member State, including ships registered in

Euros, once that Register is approved by the Council.’4 Article 4(1) of that regulation states:

‘A Member State may conclude public service contracts with or impose public serviceobligations as a condition for the provision of cabotage services, on shipping companiesparticipating in regular services to, from and between islands.

Whenever a Member State concludes public service contracts or imposes public serviceobligations, it shall do so on a non!discriminatory basis in respect of all Communityshipowners.’

Background to the dispute and the pre-litigation procedure

5 During the negotiations for the accession of the Republic of Malta to the European Union,on 26 October 2001 the European Union adopted a common position (Conference onaccession to the European Union – Malta – doc. 20766/01 CONF!M 80/01) in relation to thechapter on transport policy. The common position stated: ‘the EU notes that Malta intends toconclude explicit public service obligation contracts both with Sea Malta Co. Ltd and [withGCCL] of 5 years’ duration each by 30 June 2002 and that upon termination of thesecontracts tendering procedures will apply in line with the relevantacquis ’.


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6 By letter of 7 March 2005, in response to a request for information to it from theCommission, the Republic of Malta conrmed that the Maltese Government had on 16 April2004 concluded two six-year exclusive public service obligation contracts with GCCL andwith Sea Malta Co. Ltd for the provision of maritime transport services between the islandsof Malta and Gozo.

7 The Commission therefore decided to initiate the procedure under Article 226 EC. By letterof formal notice dated 10 April 2006, that institution stated that the contracts, which hadbeen concluded without a prior call for tenders, were not in compliance with Communitylaw since, rst, they had not been concluded by means of a non!discriminatory procedureand, second, it had not been demonstrated that they were either necessary or proportionate.

8 On 12 June 2006, the Republic of Malta replied to that letter of formal notice.

9 Since it was not satised with that reply, the Commission issued a reasoned opinion on15 December 2006, stating that, by signing an exclusive contract with GCCL on 16 April2004 for the provision of the maritime transport service between the islands of Malta andGozo, without having undertaken a prior call for tenders, the Republic of Malta has failed tofull its obligations under Regulation No 3577/92, in particular Articles 1 and 4 thereof. TheCommission called on the Republic of Malta to adopt, within two months of receiving thereasoned opinion, the measures necessary to comply with it.

10 The Republic of Malta replied to the reasoned opinion by letter of 15 June 2008, in which itinformed the Commission that preparations had been commenced for the issuing of a call fortenders for the provision of maritime transport services between the islands of Malta andGozo, which was to take place no later than October 2008.

11 In those circumstances, the Commission brought the present action.

The action

12 In support of its action, the Commission submits that, rst, it follows from the secondsubparagraph of Article 4(1) of Regulation No 3577/92 that the conclusion of a publicservice maritime cabotage contract must be preceded by a tendering procedure conducted ona non!discriminatory and open basis at Community level, whereas the contract concluded on16 April 2004 between the Maltese Government and GCCL did not result from such aprocedure.

13 Second, it is apparent from Case C-205/99 Analir and Others [2001] ECR I-1271 that apublic service contract complies with the requirements of Regulation No 3577/92 only if areal public service need can be demonstrated. However, with regard to the contractconcluded with GCCL, the Republic of Malta did not demonstrate sufciently either thatthere was such a need or that an exclusive contract was necessary and proportionate.

14 The Republic of Malta argues, as its principal plea in defence, that Regulation No 3577/92was not applicable to that contract, since it was concluded before 1 May 2004, the date of the Member State’s accession to the European Union.

15 In its reply, the Commission does not dispute that that regulation was not applicable to the


3 sur 5 06/01/15 21:37



Republic of Malta on the date on which the contract at issue was signed, that is to say, on 16April 2004. However, it contends that it is precisely from 1 May 2004 that, as regards thatcontract, the Member State was not in compliance with its obligations under the regulation.At the hearing, the Commission further stated that that non!compliance consists in havingmaintained the contract in force after the date of accession of the Republic of Malta to theEuropean Union.

16 In that regard, it should be borne in mind that it is clear from Article 38(1)(c) of the Rules of Procedure of the Court of Justice and from the case-law relating to that provision that anapplication must state the subject-matter of the proceedings and a summary of the pleas inlaw on which the application is based, and that that statement must be sufciently clear andprecise to enable the defendant to prepare his defence and the Court to rule on theapplication. It is therefore necessary for the essential points of law and of fact on which acase is based to be indicated coherently and intelligibly in the application itself and for theheads of claim to be set out unambiguously so that the Court does not ruleultra petita orindeed fail to rule on an objection (see Case C!412/04Commission v Italy [2008] ECR

I!619, paragraph 103, and Case C!211/08 Commission v Spain [2010] ECR I!0000,paragraph 32 and case-law cited).

17 In the present case, it is quite clear both from the wording of the reasoned opinion and fromthe form of order sought in the Commission’s application that the failure of the Republic of Malta to full obligations arising under Regulation No 3577/92, alleged by the Commission,consists in having signed the contract at issue on 16 April 2004.

18 It follows that the contention that the Republic of Malta was not in compliance with itsobligations under that regulation as from 1 May 2004 does not correspond to the form of order sought in the application.

19 Consequently, after examining its merits, the Court cannot adjudicate on such a contentionwithout rulingultra petita .

20 As regards the subject-matter of the infringement as set out in the Commission’sapplication, it must be observed that, pursuant to Article 2 of the Act of Accession,Regulation No 3577/92 was applicable to the Republic of Malta, as the Commissionacknowledges, only as from 1 May 2004, the date of the accession of that State to theEuropean Union (see, by analogy, Case C-168/08 Hadadi [2009] ECR I!6871, paragraph26).

21 In those circumstances, as the Advocate General stated at point 57 of her Opinion, theCommission’s action could succeed only if Regulation No 3577/92 nevertheless required theRepublic of Malta to comply with certain obligations before that date. In the context of thepresent case, such obligations would require, in particular, that the Member States refrainfrom concluding a public service contract in a manner inconsistent with Articles 1 and 4 of Regulation No 3577/92 during the period before which that regulation was applicable tothem.

22 It is, however, clear that the Commission in no way based the pleas put forward in supportof its action on the possible existence of such obligations. On the contrary, as observed at

paragraph 15 above, it stated, both in its reply and at the hearing, that it was from 1 May2004, the date on which Regulation No 3577/92 entered into force in respect of the Republic


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of Malta because of its accession to the European Union, that that Member State was not, inthe Commission’s view, in compliance with its obligations under that regulation.

23 In the light of the foregoing, and without there being any need to rule on the alternativepleas of the Republic of Malta in its defence, the Commission’s action must be dismissed.

Costs

24 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to paythe costs if they have been applied for in the successful party’s pleadings. Since the Republicof Malta applied for costs and the Commission has been unsuccessful, the Commission mustbe ordered to pay the costs.

On those grounds, the Court (Second Chamber) hereby:

1. Dismisses the action;

2. Orders the European Commission to pay the costs.

[Signatures]

* Language of the case: Maltese.


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JUDGMENT OF 5. 10. 2000 — CASE C-376/98

JUDGM ENT OF THE COURT

5 October 2000 *

In Case C-376/98,

Federal Republic of Germany represented by C.-D. Quassowski, Regierungsdir-ektor in the Federal Ministry of Finance, acting as Agent, assisted byJ. Sedemund, Rechtsanwalt, Berlin, Federal Ministry of Finance, Referat EC2Graurheindorfer Straße 108, D-53117 Bonn,

applicant,

v

European Parliament, represented by C. Pennera, Head of Division in the LegalService, and N. Lorenz, of the same service, acting as Agents, with an address forservice in Luxembourg at the General Secretariat of the European Parliament,Kirchberg,

and

Council of the European Union represented by R. Gosalbo Bono, Director in theLegal Service, A. Feeney and S. Marquardt, of the Legal Service, acting as Agents,

* Language of the case: German.

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GERMANY V PARLIAMENT AND COUNCIL

with an address for service in Luxembourg at the office of A. Morbilli, GeneralCounsel, Directorate for Legal Affairs of the European Investment Bank, 100Boulevard Konrad Adenauer,

defendants,

supported by

French Republic, initially represented by J.-F. Dobelle, Assistant Director in theLegal Affairs Directo rate of the M inistry of Foreign Affairs, and R. Loosli-Surrans, Chargé de Mission in the same Direc torate, and then by K. Rispal-Bellanger, Head of Subdirectorate in the same directo rate, and R. Loosli-Surrans,acting as Agents, with an address for service in Luxembourg at the FrenchEmbassy, 8 b Boulevard Joseph II,

y

Republic of Finland, represented by H. Rotkirch and T. Pynnä, Valtionasiamie-het acting as Agents, with an address for service in Luxembourg at the FinnishEmbassy, 2 Rue Heinrich Heine,

by

United Kingdom of Great Britain and Northern Ireland, represented byM . Ewing, of the Treasury Solicitor's Department, acting as Agent, and N . PainesQC, with an address for service in Luxembourg at the British Embassy, 14

Boulevard Roosevelt,and by

Commission of the European Communities, represented by I. Martínez del Peraland U. Wölker, of its Legal Service, acting as Agents, with an address for servicein Luxembourg at the office of C. Gómez de la Cruz, also of its Legal Service,Wagner Centre, Kirchberg,

interveners,

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APPLICATION for the annulment of Directive 98/43/EC of the EuropeanParliament and of the Council of 6 July 1998 on the approximation of the laws,regulations and administrative provisions of the Member States relating to theadvertising and sponsorship of tobacco products (OJ 1998 L 213, p. 9),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.C. M oitinho de Almeida(Rapporteur), D .A.O . Edw ard, L. Sevón and R. Schintgen (Presidents ofChambers), P.J.G. Kapteyn, C. Gulmann, A. La Pergola, J.-P. Pu issochet,P. Jann, H . Ragnemalm M . Wathelet and F. Macken, Judges,

Advocate General: N. Fennelly,Registrar: H. von Holstein, Deputy Registrar, and L. Hewlett, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 12 April 2000, atwhich the Federal Republic of Germany was represented by C.-D. Quassowski,assisted by J. Sedemund, the Parliament by C . Pennera and N . Lorenz, theCouncil by R. Gosalbo Bono, A. Feeney and S. Marquardt, the French Republicby R. Loosli-Surrans, the Republic of Finland by T. Pynnä, the United Kingdomof Great Britain and Northern Ireland by G. Amodeo, of the Treasury Solicitor'sDepartment, acting as Agent, and Professor R. Cranston QC, MP, Her Majesty'sSolicitor General for England and Wales, and N. Paines, and the Commission byI. Martínez del Peral and U. Wölker,

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after hearing the Opinion of the Advocate General at the sitting on 15 June 2000 ,

gives the following

Judgment

1 By application lodged at the Registry of the Court on 19 Oc tober 1998, theFederal Republic of Germany brought an action under Article 173 of the ECTreaty (now, after amendment, Article 230 EC) for the annulment of Directive98/43/EC of the European Parliament and of the Council of 6 July 1998 on theapproximation of the laws, regulations and administrative provisions of theMember States relating to the advertising and sponsorship of tobacco products(OJ 1992 L 213, p. 9, hereinafter 'the Directive').

2 By orders of the President of the Court of 30 April 1999 , the French Republic, theRepublic of Finland, the United Kingdom of Great Britain and Northern Irelandand the Commission of the European Communities were granted leave tointervene in support of the European Parliament and the Council of the EuropeanUnion.

3 The Directive was adopted on the basis of Article 57(2) of the EC Treaty (now,after amendment, Article 47(2) EC), Article 66 of the EC Treaty (now Article 55EC) and Article 100a of the EC Treaty (now, after amendment, Article 95 EC).

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4 Article 2 of the Directive provides:

'For the purposes of this Directive, the following definitions shall apply:

1. tobacco pro ducts : all products intended to be smoked, sniffed, sucked orchewed inasmuch as they are made, even partly, of tobacco;

2. advertising : any form of comm ercial com munication with the aim or thedirect or indirect effect of promoting a tobacco product, including advertisingwhich, while not specifically mentioning the tobacco product, tries tocircumvent the advertising ban by using brand names, trade-marks, emblemsor other distinctive features of tobacco products;

3. sponso rship : any public or private con tribution to an event or activity withthe aim or the direct or indirect effect of promoting a tobacco product;

4. tobacco sales ou tlet : any place where tobacco products are offered forsale.'

5 According to Article 3 of the Directive:

1 Without prejudice to Directive 89/552/EEC, all forms of advertising andsponsorship shall be banned in the Community.

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2. Paragraph 1 shall not prevent the Member States from allowing a brand namealready used in good faith both for tobacco products and for other goods orservices traded or offered by a given undertak ing or by different undertak ingsprio r to 30 July 1998 to be used for the advertising of those other goods or

services.

However, this brand name may not be used except in a manner clearly distinctfrom that used for the tobacco product, without any further distinguishing markalready used for a tobacco product.

3. (a) Member States shall ensure that no tobacco product bears the brandname, trade-mark, emblem or other distinctive feature of any otherproduct or service, unless the tobacco product has already been tradedunder that brand name, trade-mark, emblem or other distinctive featureon the date referred to in Article 6(1);

(b) the ban provided for in parag raph 1 may not be circumvented, in respectof any product or service placed or offered on the market as from the datelaid down in Article 6(1), by the use of brand names, trade-m arks ,emblems and other distinguishing features already used for a tobaccoproduct.

To this end, the brand name, trade-mark, emblem and any otherdistinguishing feature of the product or service must be presented in amanner clearly distinct from that used for the tobacco product.

4. Any free distribution having the purpose or the direct or indirect effect ofpromoting a tobacco product shall be banned.

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proceedings against such advertising or bring such advertising to the attention ofan administrative body competent to give a ruling on complaints or to institutethe appropriate legal proceedings.'

7 Article 5 of the Directive provides:

'This Directive shall not preclude Member States from laying down, inaccordance with the Treaty, such stricter requirements concerning the advertisingor sponsorship of tobacco products as they deem necessary to guarantee thehealth protection of individuals.'

8 Pursuan t to Article 6 of the Directive:

1 Member States shall bring into force the law s, regulations, and administrativeprovisions necessary to comply with this Directive not later than 30 July 2001.They shall forthwith inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to thisDirective or shall be accompanied by such reference on the occasion of theirofficial publication. The methods of making such reference shall be laid down byMember States.

2. Member States shall communicate to the Commission the text of the mainprovisions of domestic law which they adopt in the field covered by thisDirective.

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3. Member States may defer the implementation of Article 3(1) for:

— one year in respect of the press,

— two years in respect of sponsorship.

In exceptional cases and for duly justified reasons, Member States may continueto authorise the existing sponsorship of events or activities organised at worldlevel for a further period of three years ending not later than 1 October 2006,provided that:

— the sums devoted to such sponsorship decrease over the transitional period,

— volun tary-restraint m easures are introduced in order to reduce the visibilityof advertising at the events or activities concerned.'

9 In supp ort of its applica tion, the Federal Republic of Germ any puts forwardseven pleas in law alleging, respectively, that Article 100a of the Treaty is not anappropria te legal basis for the Directive, infringement of Article 57(2) and

Article 66 of the Treaty, breach of the principles of proportionality andsubsidiarity, breach of fundamental rights, infringement of Articles 30 and 36of the EC Treaty (now, after amendm ent, Articles 28 EC and 30 EC) andinfringement of Article 190 of the EC Treaty (now Article 253 EC).

I - 8506




10 The app licant and the defendants state that their arguments regarding Arti-cle 100a also apply to the interpretation of Articles 57(2) and 66 of the Treaty.

1 1 It is therefore appropriate to consider the pleas alleging that Articles 100a, 57(2)and 66 of the Treaty do not constitute the proper legal basis for the Directivetogether.

The pleas alleging that the legal basis is incorrect

Arguments of the parties

12 The app licant, relying both on the characteristics of the tobacco productsadvertising market and on its analysis of Article 100a, considers that Article 100aof the Treaty is not the proper legal basis for the Directive.

1 3 As regards , first, the characteristics of the market, the app licant submits tha ttobacco products advertising is essentially an activity whose effects do not extendbeyond the borders of individual Member States.

1 4 Whilst tobacco products advertising is often conceived by the manufacturer, thespecific presentation of advertising media to consumers is the result of a strategybased on the particular features of each market. The decision regarding thespecific form of the advertising, musical background, colours and other features

I - 8507




of advertising products is taken at national level so that they conform with thecultural idiosyncracies of each Member State.

15 Trade in so-called 'sta tic' advertising media (such as posters , cinema advertisingand advertising for the hotel and catering sector, for example, via parasols andash-trays) between Member States is practically non-existent and has to date notbeen subject to any restrictions. For tax reasons, advertising involving freedistribution is also limited to national markets.

1 6 The applicant submits that the press is the only significant form of 'non-static'advertising media in economic terms. Admittedly, advertising magazines anddaily papers serve as media for tobacco products, but intra-Community trade insuch products is very limited. Considerably less than 5% of magazines areexported to other Member States and daily newspapers are used to a much lesserextent than magazines for carrying tobacco advertising. In Germany, in 1997, theshare of total advertising revenue of daily papers accounted for by tobaccoproducts advertising was 0.04%.

17 The limited extent of cross-frontier trade in newspapers accounts for the fact tha tthey are not subject to restrictions by Member States which prohibit theirnational press from accepting advertisements for tobacco products. Belgian andIrish law expressly au thorise im ported press carrying such advertising and actionsbefore French courts seeking to prohibit such imports have been unsuccessful.

18 As regards 'diversifica tion' products covered by Article 3(2) of the Directive, theapplican t claims th at, as a result of its imprecise na ture , different interpretationsof that provision may give rise to new restrictions on trade. In any event, the

I 8508




Directive does not contain any free-trade clause preventing Member States whichdo not take advantage of the oppo rtunity offered by tha t provision from objectingto the marketing of products from other Member States which have availedthemselves of that opportunity.

19 The app licant claims tha t the development of centralised advertising strategiesand the intellectual work inherent in advertising services provided by advertisingagencies do not fall within the scope of the Directive. Article 2(2) of the Directivedefines advertising merely as the actual use of advertising facilities directedtowards consumers.

20 The applicant also submits that the relationship between the sponsor and theorganiser largely operates at national level since both are normally established in

the same Member State. Moreover, even where that is not the case, there is nobarrier to sponsorship under national legislation since arrangements for makingadvertising space available at event venues are made locally. Nor is televisionbroadcasting of sponsored events subject to any restrictions.

21 As regards distortion of com petition as a result of differences between nationallaws, the applicant claims that, in view of the first recital in the preamble, theDirective does not purport to eliminate such distortion in the tobacco sector.

22 As regards competition between manufacturers of advertising products , theapplicant argues that they operate only to a negligible extent beyond nationalborders and there is no competitive relationship between them because tobaccoadvertising strategies are primarily nationally orientated. As far as the press is

I - 8509






26 That is a l so t h e case wi th d ivers i f ica t ion p ro du cts re fer red to in Ar t ic le 3( 2) of th eDirec t ive , wh ich imposes such r e s t r i c t i ve cond i t i ons tha t unde r t ak ings manufac -tu r ing those p roduc t s mus t e i t he r c lo se the i r e s t ab l i shmen t s o r bea r h eavyadditional costs, with the possible loss of substantial market shares to

competitors.

27 Admit tedly, as is c lear f rom t h e c a se - l aw o f the C o u r t , t h e h a r m o n i s a t i o n of l awsmay leg i t imate ly a i m t o p r e v e n t t h e e m e rg e n c e o f fu ture ob s tac les t o t r adere su l t i ng f rom he te rogeneous deve lopmen t o f na t iona l l aws . However, t h e

Direc t ive h a s t h e sole resul t o f i n t r o d u c i n g n e w p e r m a n e n t o b s t a c l e s t o t r ade ,w h e t h e r i m m e d i a t e l y o r in the future.

28 Other directives based on Article 100a of the Treaty which prohibit certainactivities, in the applicant's contention, differ from the Directive. Thus, theprohibition of misleading advertising is intended to promote cross-border tradeby guaranteeing fair advertising across the Community; similarly, the prohibitionon using product components, manufacturing processes or forms of marketingwhich are harmful to health is intended to create an internal market for theproducts concerned by allowing them to be manufactured, marketed orconsumed without risk to health.

29 The app licant also contends tha t Article 100a should be available as a legal basisonly in cases where obstacles to the exercise of fundamental freedoms anddistortion of competition are considerable. The case-law of the Court onArticles 30 and 36 of the Treaty to the effect that those provisions prohibit evenminimal obstacles to trade cannot be transposed to an area where it is necessaryto define the respective powers of the Community and the Member States. If theCommunity legislature were permitted to harmonise national legislation evenwhere there was no appreciable effect on the internal market, it could adoptdirectives in any area whatsoever and judicial review of the legislation'scompliance with Article 100a would become superfluous.

I-8511






mental policy a n d a t t a inment o f the internal mark et were pursu ed a t t h e samelevel a n d each of those Com mu ni ty objectives h a d i ts o w n legal ba sis, na me lyArticle 130r o f t h e E C Treaty ( n o w, af ter amendment, Article 1 7 4 E C ) a n dArticle 100a, o f the Treat y respectively, ena blin g natio na l laws t o be har mon ise d.

However, that is not the case here: public health policy is the 'c entre of gravi ty ' o fthe Directive y e t harmo nis ing measures in that field a r e expressly pro hibi ted b yArticle 129( 4) first inde nt , o f t h e E C Treaty ( n o w, af ter am en dm en t, Arti-cle 152(4), first paragraph, EC).

36 Th e Parl iam ent , the Cou ncil an d the parti es interv ening in su pp or t, relying , first,on the existence of a n in ternal ma rke t in the toba cco p rodu cts advert ising sectorand, second, o n a n analysis of Article 100 a, con side r tha t t h e Directive w a svalidly adopted o n t h e basis of Article 100 a o f th e Treaty .

37 Th e Par lia men t, the Cou nci l an d the Co mm is sio n co nt en d th at there is a n internal

m ar ke t in the toba cco pr odu cts advert ising sector in whi ch advert ising cam pai gnsare often centralised a n d designed b y agencies es tablish ed in th e Communi ty.Although the chosen advertising strategies and the advertising themes are put intoeffect a t nat ion al level, t h e choice o f themes a n d t h e selection of sym bol s, lo gosand other elements are decided upon and offered a t cro ss-b ord er level a n d reac hconsumers in several M em b e r States .

38 A s regards t h e hote l a n d cate ring sector, t h e Council co nten ds th at , even if theeffect of such advert ising is l imited t o t h e local pop ula t io n, identical advert isingmedia c a n b e used in several Me mb er States since t h e langua ge used is oftenEnglish.

39 T h e Par l iament a n d t h e Council d ra w atten tion t o t h e cross- borde r aspects ofadvert ising v ia free distrib utio n, whi ch forms p art o f a unifo rmly defined

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44 In their view, t h e Directive, which, a s a result o f the approx imat ion of laws,creates a uniform framework for th e advert ising of tobacco products in th einternal market, could validly be adopted o n t h e basis of Article 10 0a of th eTreaty.

45 In tha t con nect ion , the Parl iamen t, the Coun cil an d the Com mis sio n conte nd th atthe power conferred o n the Cou ncil by that pro vision is not necessarily conc erne dwith t h e l iberalisation of t r ade b u t rather with m ark et regulation. Th at explainswhy i t has been possib le fo r directives con tain ing certain proh ibit ions to be

adopted o n t h e basis of Article 10 0a.

46 Th us , Coun cil Directive 92/ 41/ EE C of 15 M a y 1992 am endin g Directive 89 /622 /EEC o n the approxi mat io n of the laws , regul ations and adm inis trativ e provisi onsof t h e Me mb er States concerning t h e labelling of tobacco products (OJ 19 92L 158, p . 30 ) prohibi ted th e marke t ing of certain types of tobacco fo r oral useand Council Directive 91 /339/EEC of 18 Jun e 1991 amen ding for th e 11t h tim eDirective 76/769/EEC on t he approx imat ion of th e laws, regulations a n dadministrat ive provisions of the M em be r States relating t o restrictions o n themarket ing a n d use of certain dange rous s ubstances a n d preparat ions (O J 1991L 186, p . 64 ) imposed a total prohibit ion o n use of the listed sub sta nce s.

47 In th e adver tisin g field, d irectives s uch a s Directive 97/ 55/E C of th e EuropeanPar l iament a n d o f th e Council of 6 Oct obe r 1 997 amendin g Directive 84 /450 /EEC concerning misleading advertising so as to include com par ati ve advertis ing(OJ 1997 L 290 , p . 18) a n d Counci l Directive 92/28 /EE C of 31 Mar ch 1992 o nthe advertising of medicinal prod ucts fo r hu ma n use (OJ 199 2 L 113, p . 13) werelikewise n o t designed t o l iberalise trade. T h e latter directive , in particular,imposed wide-ranging prohibit ions o n advertising, especially that of medicinalproducts fo r which a market ing author isa t ion complying wi th Community l awhad n o t been issued (Article 2(1 )) a n d medicin al prod uct s which can b e su ppliedonly o n pres crip tion (first inde nt of Article 3(1)).

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48 The Parliament, the Council and the Commission also mention other directives,which impose partial prohibitions, such as that of television advertising oftobacco products (Council Directive 89/552/EEC of 3 October 1989 on thecoordination of certain provisions laid down by law, regulation or administrativeaction in Member States concerning the pursuit of television broadcastingactivities (OJ 1989 L 29 8, p. 23)) and measures displaying an indirect link tofundamental freedoms, such as those concerning summ er time (Seventh Directive94/21/EC of the European Parliament and of the Council of 30 May 1994 onsummer-time arrangements (OJ 1994 L 164, p. 1)) or access to the internationaltelephone network in the Community (Council Decision 92/264/EEC of 11 May1992 on the introduction of a standard international telephone access code in theCommunity (OJ 1992 L 137, p. 21)).

49 Recourse to Article 100a of the Treaty is no t limited to cases where legislativedifferences actually give rise to obstacles to the exercise of fundamental freedomsor distortion of com petition. As the C ourt held in Case C-350/92 Spain v Council[1995] ECR 1-1985 paragraph 33, it is sufficient if the disparities between thelaws of the Member States are liable to hinder the free movement of goods.

Recourse to Article 100a is even possible in order to prevent the heterogeneousdevelopment of national laws leading to further disparities (ibid., paragraph 35).

50 As regards the applicant's argument that recourse to Article 100a as a legal basisshould be possible only in cases where differences in legislation give rise to

appreciable obstacles to trade or appreciable distortion of competition, theCouncil contends that that distinction, which is based on competition law, cannotbe used within the sphere of Article 100a. Objective and universal criteria mustbe used to define the scope of powers.

51 The C omm ission also contends that, in this case, there is real distortion ofcompetition. Because of existing differences in legislation, the potential profit ofadvertising agencies differs according to the place where they are established orthe market in which they carry on business. Where newspapers or periodicals

I-8516




from other Member States are simply tolerated, despite restrictive legislationaffecting the press in the Member State in question, there is distortion ofcompetition in that State.

52 A s reg ards spon sor sh i p , such d i ffe rences hav e a n i m p a c t o n t h e cho ice o f venuefor events sponsored b y t o b a c c o m a n u f a c t u r e r s , w h i c h h a s s ign i f icant e co no m icr e p e r c u s s i o n s in the case o f spor t s events such a s F o r m u l a 1 rac ing .

53 Final ly, pr od uc er s a n d sel lers o f t o b a c c o p r o d u c t s d o n o t enjoy t h e s amec o n d i t i o n s o f c o m p e t i t i o n w h i c h h a v e a n in f luence o n t he i r marke t pos i t i on . InMember S ta t e s w i th r e s t r i c t i ve l eg i s l a t i on , economic ope ra to r s c a n on ly ma in t a ino r improve the i r marke t pos i t i on b y p r i ce c om pe t i t i on .

54 In response to the applicant's argument that public health protection is the 'centreof gravity' of the Directive, the Parliam ent, the Council and the Commission statethat it is clear from the case-law of the Court that the essential factor to be reliedon in assessing the choice of the legal basis for a measure is the text of themeasure in question. It is clear from the wording of the third and fourth recitals inthe preamble to the Directive and the place occupied by them that the protection

of human health is one of its objectives, pursued in the context of the provisionsof Article 100a(3) and (4) of the Treaty, but that it is not the principal one.

55 Similarly, the second recital and Article 5 of the Directive, by recognising theright of Member States to adopt provisions more stringent than those laid downin the Directive to ensure public health protection, also clearly demonstrate thatthe concern for the protection of human health is an incidental and subordinateone.

I-8517




56 The Comm ission observes, in tha t connection, tha t the emphasis on public healthprotection in the Directive can be explained by the fact that it constituted themain, or indeed even the sole, objective of the national measures beingharmonised, but, in the context of that harmonisation, it became a secondary

objective.

57 The Parliament, the Council and the Commission state, finally, that the fact thatthe Directive imposes a broad proh ibition on tobacco advertising derives from theobligation imposed by Article 100a(3) of the Treaty to take as a base a high levelof human health protection and from the need to prevent circumvention of theprohibition.

58 The United Kingdom Government challenges the applicant's assertion tha t the

Directive is incorrectly based on Article 100a of the Treaty because its principalobjective is not the elimination of obstacles to trade in advertising media andassociated services but the protection of human health.

59 According to the case-law of the Court, the choice of the legal basis for a measuremust be guided by objective factors which are amenable to judicial review,including, in particular, the aim and content of the measure.

60 Objectively, the Directive pursues objectives wh ich are inseparably linked with

the protection of human health and others linked with elimination of disparitiesin conditions of competition and liberalisation of trade. The applicant's approachof seeking to determine which of those objectives is most important is not onlycontrary to the objective test propounded by the Court but also unworkable.

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66 W ith regard to the applicant's argum ent that recourse to Article 100a of theTreaty should be possible only where there are appreciable restrictions on theexercise of fundamental freedoms or appreciable distortion of competition, theUnited Kingdom Government observes that no specific criterion is capable of

being used to draw such a distinction.

67 It emphasises that its suggested interpre tation of Article 100a is confirmed by thecase-law of the Court according to which a directive which confines itself to

prohibiting certain activities with a view to eliminating distortion of competitionmay be adopted on the basis of that article (Titanium Dioxide, cited above).

68 The French Government considers tha t the Directive was validly adopted on the

basis of Article 100a of the Treaty. It bases that view on arguments drawn fromlegislative precedents relating to harmonisation in the area of public health, thecase-law of the Court on Article 129 of the Treaty and, finally, the legal basischosen for new harmonising measures now in the process of being adopted.

69 As legislative precedents, it refers to the directives on pharm aceu tical produc ts,from Council Directive 65/65/EEC of 26 January 1965 on the approximation ofprovisions laid down by law, regulation or administrative action relating toproprietary medicinal products (OJ, English Special Edition 1965-66, p. 20) toCouncil Directive 90/220/EEC of 23 April 1990 on the deliberate release into theenvironment of genetically modified organisms (OJ 1990 L 117 , p. 15) andCouncil Directive 76/768/EEC of 27 July 1976 on the approximation of the lawsof the Member States relating to cosmetic products (OJ 1976 L 262, p. 169). Inthose directives, the aims of public health protection co-exist with the objective offree movement of products and the removal of distortion of competition, and thevalidity of the provisions thereof which harmonise national laws on public healthhas not been challenged.

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70 As regards the case-law of the Court on Article 129 of the Treaty, the FrenchGovernment cites Case C-180/96 United Kingdom v Commission [1998] ECRI-2265 and Case C-269/97 Commission v Council [2000] ECR I-2257, in whichthe Court made it clear that human health protection requirements are a

constituent part of other Community policies, in particular the internal marketpolicy.

71 Finally, the legal basis of the proposal for a directive on the approxim ation of

provisions laid down by law, regulation or administrative action relating to themanufacture, sale and presentation of tobacco products is Article 100a of theTreaty. Moreover, negotiations have been started under the auspices of the WorldHealth Organisation with a view inter alia to concluding a protocol on theadvertising of tobacco products. The legal basis of the authority vested in theCommission to participate in those negotiations is Article 228 of the EC Treaty(now, after amendment, Article 300 EC).

The Finnish Government states that, in view of the obstacles to trade anddistortion of competition caused by disparate national legislation, the Directivewas validly adopted on the basis of Article 100a the Treaty.

It draws attention to the cross-border features of the advertising market and ofsponsorship of tobacco products referred to by the Parliament, the Council andthe Commission, and adds that the internationalisation of that market isintensified by electronic communications, in particular advertising on theInternet. With the benefit of media such as television, the advertising of tobaccoproducts penetrates Member States where such advertising is prohibited. Thus, in

a Member State like Finland, where direct advertising of tobacco products hasbeen prohibited since 1976, studies show that in 1996, for example, sportsprogrammes broadcast on the three national television channels over a period ofone month included four hours of advertising for such products.

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74 The Finnish Government also refers to distortion of competition in the tobaccoproducts and sponsorship sectors. Sponsorship, which is not available to smallundertakings, creates inequality which is incompatible w ith the comm on market.

75 As regards the importance of health protec tion in the Directive, the argumentsput forward by the Finnish Government are the same as those expounded by theParliament, the Council and the Commission, which are summarised inparagraphs 54 to 57 of this judgment.

The Court s analysis

The choice of Articles 100a, 57(2) and 66 of the Treaty as a legal basis andjudicial review thereof

76 The Directive is concerned with the approxim ation of laws, regulations andadministrative provisions of the Member States relating to the advertising andsponsorship of tobacco products. The national measures affected are to a largeextent inspired by public health policy objectives.

77 The first indent of Article 129(4) of the Treaty excludes any harmonisation oflaws and regulations of the Member States designed to protect and improvehuman health.

78 But tha t provision does not mean tha t harmonising measures adop ted on the basisof other provisions of the Treaty cannot have any impact on the protection of

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human health. Indeed, the third paragraph of Article 129(1) provides that healthrequirements are to form a constituent part of the Community's other policies.

79 Other articles of the Treaty may not, however, be used as a legal basis in order tocircumvent the express exclusion of harmonisation laid down in Article 129(4) ofthe Treaty.

so In this case, the approxim ation of national laws on the advertising andsponsorship of tobacco products provided for by the Directive was based onArticles 100a, 57(2) and 66 of the Treaty.

81 Article 100a(1) of the Treaty empowers the Council, acting in accordance withthe procedure referred to in Article 189b (now, after amendment, Article 251 EC)and after consulting the Economic and Social Committee, to adopt measures forthe approximation of the provisions laid down by law, regulation or adminis-trative action in Member States which have as their object the establishment andfunctioning of the internal market.

82 Under Article 3(c) of the EC Treaty (now, after am endment, Article 3 1 ) c) EC),the internal market is characterised by the abolition, as between Member States,of all obstacles to the free movement of goods, persons, services and capital.Article 7a of the EC Treaty (now, after am endment, Article 14 EC), whichprovides for the measures to be taken with a view to establishing the internalmarket, states in paragraph 2 that that market is to comprise an area withoutinternal frontiers in which the free movement of goods, persons, services andcapital is ensured in accordance with the provisions of the Treaty.

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83 Those provisions, read together, make it clear tha t the measures referred to inArticle 100a(1) of the Treaty are intended to improve the conditions for theestablishment and functioning of the internal market. To construe that article asmeaning tha t it vests in the Community legislature a general power to regulate the

internal market would not only be contrary to the express wording of theprovisions cited above but would also be incompatible with the principleembodied in Article 3b of the EC Treaty (now Article 5 EC) that the powers ofthe Community are limited to those specifically conferred on it.

84 Moreover, a measure adopted on the basis of Article 100a of the Treaty mustgenuinely have as its object the improvement of the conditions for the

establishment and functioning of the internal market. If a mere finding ofdisparities between national rules and of the abstract risk of obstacles to theexercise of fundamental freedoms or of distortions of competition liable to resulttherefrom were sufficient to justify the choice of Article 100a as a legal basis,judicial review of compliance with the the proper legal basis might be renderednugatory. The Court would then be prevented from discharging the functionentrusted to it by Article 164 of the EC Treaty (now Article 220 EC) of ensuringthat the law is observed in the interpretation and application of the Treaty.

85 So, in considering whether Article 100a was the prope r legal basis, the Courtmust verify whether the measure whose validity is at issue in fact pursues theobjectives stated by the Community legislature (see, in particular, Spain vCouncil, cited above, paragraphs 25 to 41, and Case C-233/94 Germany vParliament and Council [1997] ECR I-2405, paragraphs 10 to 21).

86 It is t rue , as the C ou rt observed in pa ra gr ap h 35 of i ts judg m ent in Spain vCouncil, cited ab ov e, th at reco urse to Article 100 a as a legal basis is possible ifthe aim is to prevent the emergence of future obstacles to trade resulting frommultifarious development of national laws. However, the emergence of suchobstacles must be l ikely and the measure in question must be designed to preventthem.

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87 The foregoing considerations apply to interpretation of Article 57(2) of theTreaty, read in conjunction with Article 66 thereof which expressly refers tomeasures intended to make it easier for persons to take up and pursue activitiesby way of services. Those provisions are also intended to confer on the

Community legislature specific power to adopt measures intended to improve thefunctioning of the internal market.

88 Furtherm ore, provided tha t the conditions for recourse to Articles 100a, 57(2)and 66 as a legal basis are fulfilled, the Community legislature cannot beprevented from relying on that legal basis on the ground that public healthprotection is a decisive factor in the choices to be made. On the contrary, the thirdparagraph of Article 129(1) provides that health requirements are to form aconstituent part of the Community's other policies and Article 100a(3) expresslyrequires that, in the process of harmonisation, a high level of human healthprotection is to be ensured.

89 It is therefore necessary to verify whether, in the light of the foregoing, it waspermissible for the Directive to be adopted on the basis of Articles 100a, 57(2)and 66 of the Treaty.

The Directive

90 In the first recital in the preamble to the Directive, the Community legislaturenotes that differences exist between national laws on the advertising andsponsorship of tobacco products and observes that, as a result of such advertisingand sponsorship transcending the borders of the Mem ber States, the differences inquestion are likely to give rise to barriers to the movement of the products whichserve as the media for such activities and the exercise of freedom to provideservices in that area, as well as to distortions of competition, thereby impedingthe functioning of the internal market.

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91 According to the second recital, it is necessary to eliminate such barriers, and, tothat end, approximate the rules relating to the advertising and sponsorship oftobacco products, whilst leaving Member States the possibility of introducing,under certain conditions, such requirements as they consider necessary in order to

guarantee protection of the health of individuals.

92 Article 3(1) of the Directive prohibits all forms of advertising and sponsorship of

tobacco p roducts and Article 3(4) prohibits any free distribution having thepurpose or the effect of promoting such products. However, its scope does notextend to communications between professionals in the tobacco trade, advertis-ing in sales outlets or in publications published and printed in third countrieswhich are not principally intended for the Community market (Article 3(5)).

93 The Directive also prohibits the use of the same names both for tobacco productsand for o ther products and services as from 30 July 1998 , except for productsand services marketed before that date under a name also used for a tobaccoproduct, whose use is authorised under certain conditions (Article 3(2)). Witheffect from 30 July 2001, tobacco products must not bear the brand name, trade-mark, emblem or other distinctive feature of any other product or service, unlessthe tobacco product has already been traded under that brand name, trade-mark,emblem or other distinctive feature before that date (Article 3(3)(a)).

94 Pursuan t to Article 5, the Directive is not to preclude Mem ber States from layingdown, in accordance with the Treaty, such stricter requirements concerning theadvertising or sponsorship of tobacco products as they deem necessary toguarantee the health protection of individuals.

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95 I t therefore necessary t o verify whether t h e Directive actually co ntri bute s t oeliminating obstacles t o t he free mo ve me nt of goods an d t o t he freedom t oprovide services, a n d t o removing distort ions of competi t ion.

Elimination of obstacles t o t he free m ove me nt of goods a n d t h e freedom t oprovide services

96 It is clear t hat , a s a result of disparities between n atio nal laws o n the advertisin gof tobacco products, obstacles t o t he free mo vem ent of goods o r the freedom t oprovide services exist o r ma y well ar ise .

97 In the c ase, fo r example , of periodi cals, magaz ines and news pap ers which cont ainadvert ising fo r tobacco p roducts , it is t rue , a s the appl icant h a s demonstra ted,tha t n o obstacl e exists a t present t o their im por tat ion into M em be r States whichprohibit such advertising. However, in view of the t rend in nati onal legislationtowards ever greater restrictions o n advertising of tob acc o prod uct s, reflectingthe belief that such advertising gives rise to an appreciable increase in tobaccoconsumpt ion , it is prob able that obstacles t o the free mov em ent of press p rod uct swill arise in the future.

98 In principle, theref ore, a Directive prohibiting the advertising of tobac co produ ctsin periodicals, magazines a n d newsp apers could be adopted on t he basis ofArticle 10 0a o f th e Treaty with a view t o ensuring th e free m ov em en t of pressproduc ts , on t he lines of Directive 89/552, Article 13 of whic h prohi bits

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television advertising of tobacco products in order to promote the free broad-casting of television programmes.

99 How ever, for numerous types of advertising of tobacco prod ucts , the prohibitionunder Article 3(1) of the Directive cannot be justified by the need to eliminateobstacles to the free movement of advertising media or the freedom to provideservices in the field of advertising. That applies, in particular, to the prohibition ofadvertising on posters, parasols, ashtrays and other articles used in hotels,restaurants and cafés, and the prohibition of advertising spots in cinemas,prohibitions which in no way help to facilitate trade in the products concerned.

100 Adm ittedly, a measure adopted on the basis of Articles 100a, 57(2) and 66 of theTreaty may incorporate provisions which do not contribute to the elimination of

obstacles to exercise of the fundamental freedoms provided that they arenecessary to ensure that certain prohibitions imposed in pursuit of that purposeare not circumvented. It is, however, quite clear that the prohibitions mentionedin the previous paragraph do not fall into that category.

101 Moreover, the Directive does not ensure free movement of products which are inconformity with its provisions.

102 Contrary to the contentions of the Parliament and Council, Article 3(2) of theDirective, relating to diversification products, cannot be construed as meaningthat, where the conditions laid down in the Directive are fulfilled, products ofthat kind in which trade is allowed in one Member State may move freely in theother Member States, including those where such products are prohibited.

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103 Under Article 5 of the Directive, Member S tates retain the right to lay down, inaccordance with the Treaty, such stricter requirements concerning the advertisingor sponsorship of tobacco products as they deem necessary to guarantee thehealth protection of individuals.

104 Furthermore, the Directive contains no provision ensuring the free movem ent ofproducts which conform to its provisions, in contrast to other directives allowingMember States to adopt stricter measures for the protection of a general interest(see, in particular, Article 7(1) of Council Directive 90/239/EEC of 17 May 1990

on the approximation of the laws, regulations and administrative provisions ofthe Member States concerning the maximum tar yield of cigarettes (OJ 1990L 137, p. 36) and Article 8(1) of Council Directive 89/622/EEC of 13 November1989 on the approximation of the laws, regulations and administrative provisionsof the Member States concerning the labelling of tobacco products (OJ 1989L 359, p. 1)).

105 In those circumstances, it must be held that the Community legislature cannotrely on the need to eliminate obstacles to the free movement of advertising mediaand the freedom to provide services in order to adopt the Directive on the basis ofArticles 100a, 57(2) and 66 of Treaty.

Elimination of distortion of competition

106 In examining the lawfulness of a directive adopted on the basis of Article 100a ofthe Treaty, the Court is required to verify whether the distortion of competitionwhich the measure purports to eliminate is appreciable {Titanium Dioxide, citedabove, paragraph 23).

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107 In the absence of such a requirement, the powers of the Community legislaturewould be practically unlimited. National laws often differ regarding theconditions under which the activities they regulate may be carried on, and thisimpacts directly or indirectly on the conditions of competition for the under-

takings concerned. It follows that to interpret Articles 100a, 57(2) and 66 of theTreaty as meaning that the Community legislature may rely on those articles witha view to eliminating the smallest distortions of competition would beincompatible with the principle, already referred to in paragraph 83 of thisjudgment, that the powers of the Community are those specifically conferred onit.

108 It is therefore necessary to verify whether the Directive actually contributes toeliminating appreciable distortions of competition.

109 First, as regards advertising agencies and producers of advertising media,undertakings established in Member States which impose fewer restrictions ontobacco advertising are unquestionably at an advantage in terms of economies ofscale and increase in profits. The effects of such advantages on competition are,however, remote and indirect and do not constitute distortions which could bedescribed as appreciable. They are not comparable to the distortions ofcompetition caused by differences in production costs, such as those which, inparticular, prompted the Community legislature to adopt Council Directive89/428/EEC of 21 June 1989 on procedures for harmonising the programmes forthe reduction and eventual elimination of pollution caused by waste from thetitanium dioxide industry (OJ 1989 L 201 , p . 56).

110It is true that the differences between certain regulations on tobacco advertisingmay give rise to appreciable distortions of competition. As the Commission and

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the Finnish and United Kingdom Governments have submitted, the fact thatspon sorship is proh ibited in some Me m be r States and autho rised in others givesrise, in particular, to certain sports events being relocated, with considerablerepercussions on the condit ions of competi t ion for undertakings associated withsuch events.

1 1 1 However, such distortions, which could be a basis for recourse to Article 100a ofthe Treaty in order to prohibit certain forms of sponsorship, are not such as tojustify the use of that legal basis for an outright prohibition of advertising of thekind imposed by the Directive.

112 Second, as regards distort ions of com peti t ion in the m arke t for tob acc o pro du cts,irrespective of the applicant 's contention that such distortions are not covered bythe Directive, it is clear that, in that sector, the Directive is likewise not apt toeliminate appreciable distort ions of competi t ion.

1 1 3 Admittedly, as the Commission has stated, producers and sel lers of tobaccopro duc ts are obliged to resort to price com peti t ion to influence their ma rket sharein Member States which have restr ict ive legislat ion. However, that does notconstitute a distortion of competition but rather a restriction of forms of

competi t ion which applies to al l economic operators in those Member States. Byimposing a wide-ranging prohibit ion on the advert ising of tobacco products, theDirective would in the future generalise that restriction of forms of competitionby l imit ing, in al l the M em be r States, the me ans available for econo mic op erato rsto enter or remain in the market.

1 1 4 In those circum stances, i t mu st be held that the C om m un ity legislature can no trely on the need to eliminate distortions of competition, either in the advertising

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Costs

119 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been applied for in the successful party'spleadings. Since the Federal Republic of Germany has applied for costs to beawarded against the Parliament and the Council, and the latter have beenunsuccessful, they must be ordered to pay the costs. The French Republic, theRepublic of Finland, the United Kingdom and the Commission must bear theirown costs pursuant to Article 69(4) of the Rules of Procedure.

On those grounds,

THE COURT

hereby:

1. Annuls Directive 98 /43 /EC of the European Parliament and of the Council of

6 July 1998 on the approximation of the laws, regulations and administrativeprovisions of the Member States relating to the advertising and sponsorshipof tobacco products;

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2. Orde rs the European Parliament and the Council of the European Un ion topay the costs, and the French Republic, the Republic of Finland, the UnitedKingdom of Great Britain and Northern Ireland and the Commission of theEuropean Communities to bear their own costs.

Rodriguez Iglesias M oitinho de Almeida Edw ard

Sevón Schintgen Kapteyn

Gulmann La Pergola Puissochet Jann

Ragnemalm Wathelet Macken

Delivered in open court in Luxembourg on 5 October 2000.

R. Grass

Registrar

G.C. Rodríguez Iglesias

President

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(2014), Vol. 12 No. 1, 165–188 doi:10.1093/icon/mou007

© The Author 2014. Oxford University Press and New York University School of Law.All rights reserved. For permissions, please e-mail: [email protected]

Sophie Robin-Olivier*

VanGend en Loos

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-

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- Van Gend

en Loos

1. IntroductionNo account of the development European Law misses the reference to .This is not because the facts are exciting, captivating, or memorable: who would enjoy

recounting the facts in ? Nor is it because the case addressed a cause, asocially sensitive issue. Rather, the reason for all this attention is because the EuropeanCourt of Justice (ECJ) named and shaped a “new legal order,” which can still be char-acterized by “the direct effect of a whole series of provisions which are applicable to

* Ecole de droit de la Sorbonne (University of Paris I). Email:[email protected].

b y g u e s t on J a n u a r y 6 ,2 0 1 5

h t t p : / / i c on . oxf or d j o ur n a l s . or g /

D o wnl o a d e d f r om



166 12 (2014), 165–188

their nationals and to the Member States themselves.”1 For that reason, the decision isconsidered a moment of “passage,” one of these turning points that marked the historyof European legal and political integration.2 Combined with .3 and the

principle of primacy, has allowed a considerable expansion of EU laweffects, in national courts, an evolution that was fostered by the dialogue between thesecourts and the ECJ, through the channel of preliminary ruling.4

But what is the signicance of the decision today? To be sure, the doctrine of “directeffect,” as af rmed in the decision, remains a powerful instrument through which EUlaw penetrates national legal systems. And the effectiveness of European treaties’ pro-visions owes a lot to the role assigned to national courts in the “new legal order” of theEuropean Community (EC), namely to protect individual rights conferred by the treaty.

However, EU law has evolved in so many different ways since was

decided, and the “transformation of Europe”5

has been so profound, that one maydoubt that the case can be of any help to face today’s challenges concerning the effectsof EU law in national courts. To be sure, the doctrine of direct effect has not beencalled into question: it remains true, and it is an essential feature of the EU legal order,that some provisions of EU law can be relied on in national courts to claim subjectiverights. But the effects of EU law in national courts have diversied and grown morecomplex to such an extent that seems to grasp only a thin fragmentof EU law enforcement issues. It seems, rather, that no longer gives anaccurate idea of the ways through which EU law penetrates member states through its

enforcement in national courts. And it would be an error, I believe, to cling too rigidlyto its doctrine, in trying to address the new challenges that the evolution of EU lawhas created.

The approach taken in this paper focuses on the case law developed by the ECJ. It is,indeed, a narrow angle: it looks at one particular scene, on which EU law is expressed,and developed, as if it could be isolated from the other “sources” of law development.Of course, I do not pretend that analyzing the court’s discourse and, in particular, thedepartures from expected repetitions and the moments when improvization occurs,thus making change possible, can be properly done without taking into account ele-ments of legal, social, or political context. However, because the purpose of this reec-tion is to revisit a case decided by the ECJ fty years ago, the choice to focus mainly oncase law, existing and prospective, seems appropriate.

When I started to reconsider , I asked myself the following question:what would be today’s version of that case? Or, rather, what situation(s), involvingthe effects of EU law in national courts, would be as challenging for the ECJ todayas was, in its time? The answer, I believe, is that the Court of Justice

1 CJEU Opinion 1/09, Mar. 8, 2011, E.C.R. I-1137, ¶ 65.2 LUUK VAN MIDDELAAR, THE PASSAGE TO EUROPE (2013).3 Case 6/64 Costa v. E.N.E.L., 1964 E.C.R. 1141.4 On the contribution of preliminary ruling to the effectiveness of direct effect, Joseph H.H. Weiler,

Van Gend en Loos , 12(1)INT’L J. CONST. L. 96 (2014).

5 . Joseph H.H. Weiler, , 100 YALE L.J. 2403 (1991).






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would have to rule in a case, or a series of cases, that would be substantially differentfrom . Three important shifts would characterize the action(s) before anational court as compared to the situation in . First, the claim would

be based, not on one particular provision of the Treaty on EU (TEU) or the Treaty onthe Functioning of the European Union (TFEU) which satis es the conditions to begiven direct effect, but rather on a combination of norms, regardless of their respectivedirect effect. Second, instead of involving an individual requesting the bene t of a pro-vision of the Treaty, the action would challenge an obligation imposed by the Treatyon a private actor, not the state, or contest a coercive measure applied to an individual,on the basis of EU law: the effects of the Treaty would be contested, not requested.Lastly, the case would imply a prior question on the applicability of the primary law.More precisely, the CJEU would be questioned on the applicability of the Charter of

Fundamental Rights to the situation before it, and would have to consider, at the sametime, the possibility for a national court to enforce fundamental rights protected by theconstitution of the member state to which the court belongs.

Imagining in detail this abstract case is not the purpose of this article. But sketch-ing out the kind of situations that are most problematic allows us to shed light onthree essential outcomes of that no longer constitute the majorchallenges concerning EU law enforcement in national courts: the existence of a par-ticular category of (“direct effect”) EU norms, which implies a process of selectionamong EU law provisions; the possibility for individuals to claim (subjective) rights

on the basis of the treaty; and the duty for national courts to apply EU law provisionsdirectly (direct enforcement). That triad (selection, rights, application) has lost mostof its mystery. As far as selection of direct effect norms is concerned, uncertaintieshave been reduced to a minimum. To be sure, not all questions on that matter havevanished in the course of EU law evolution, but they are somehow overshadowed bya phenomenon that had ignored: comparison and combination ofnorms in judicial reasoning. Concerning subjective rights, without denying the factthat individuals have, since , gained new rights from the treaty, andfrom other sources of EU law, there is more to say, today, on the obligations imposedby the Treaty on individuals, and more generally, on the methods through which thishorizontal effect occurs (or does not occur). Lastly, the duty of national courts to applyEU law—the enduring importance of that function assigned to national courts—isnow coupled with one prior question that these courts have to address, and which hasbecome much more sensitive than before in view of the growing centrality of funda-mental rights’ protection in the EU system: the question of the applicability of EU andnational (constitutional) law.

Thus, following , a dialectical approach can be constructed using aseries of pairs: selection–combination (of norms); (individual) rights–obligations; andapplication–applicability of EU law. This article intends to use these dialectic pairs,successively (Sections 2 to 4), in order to examine the new questions concerning EUlaw enforcement in national courts. Unsurprisingly, the conclusions of these analysesare not straightforward. On the one hand, it is quite clear that there are more opportu-nities than before to mobilize EU law in national courts. This conrms what has been






168 12 (2014), 165–188

a constant evolution since the narrow concept of “direct effect” has been extendedto allow a much larger variety of claims based on EU law: new forms of invoc abilityof EU law have emerged and to some extent have transformed the notion of EU law

effectiveness in national courts. On the other hand, the rigor of direct effect, in itsoriginal purity, has become problematic in some particular instances. This is the casewhen obligations binding on individuals stem from horizontal application of provi-sions of primary law—in particular, free-market rules which were not meant to applyto private actors. More broadly, the effectiveness of European Union law is too simplean answer, it seems, in cases, more numerous than before, in which EU law imposesobligations or constraints on individuals, rather than states. In 2013, the power of EUlaw to impose transformations of national policies should not be af rmed at all costs,without consideration to the impact of EU policies on individual rights and freedoms

protected by national Constitutions. That is an important matter that “revisiting ” also invites us to think about, in guise of conclusion (Section 5).

2. From selection to combinationAmong the various ways in which EU law norms are invoked before national courts,there is one which contrasts sharply with the concept of direct effect:the combination of norms emanating from different sources of law. Indeed, in somecases, it seems as if effectiveness of European law depended not on the respective legalforce of the norms invoked before the court, but on the relationship that they enter-tain. To be sure, this phenomenon is not specic to EU law,6 but it takes on specicforms in EU law, in light of the specic system of norms of that legal order.

implied identication by judges of EU law norms possessing directeffect: such norms could be the basis for subjective rights. The case led to distinctionsamong, and the constitution of, different categories of norms, depending on theircapacity to produce direct effect. Although this is not coming to an end, and the taxo-nomic enterprise must go on, since many new provisions of EU law come to life withan uncertain nature,7 the power accorded to normative combinations has made it lessimportant than before to ascertain the exact effect of each provision of the law.

2.1. Direct effect as a process of a selection raised the question whether a provision of the treaty (art. 12 TEU)

could be a source of individual rights that national courts should protect. To answerthis question, the Court of Justice insisted on the nature of the Community legal order,a nature justifying the capacity of provisions mentioned in the treaty to create rights6 For an analysis of the phenomenon in the case law of the Court of Human Rights, Francoise Tulkens,

SebastienVan Droogherbroeck, & Frederic Krenc, soft law , REVUE TRIMESTRIELLE DE DROIT HUMAIN 433 (2012). For an example in Canadian labor

law, Jane Fudge, , 37 INDUS. L.J. 25 (2008).

7 the provisions of the Charter of Fundamental Rights of the European Union, 2010 O.J. C83/02 [hereinafter Charter of Rights].






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and obligations for individuals, and not only for member states. At the same time, theCourt clearly embraced the idea that not all treaty provisions had such effect: onlyunder certain conditions, it indicated, can treaty provisions be invoked by individuals

in national courts, in order to claim subjective rights. Since then, the Court of Justicehas presided over the process of selection of direct-effect norms.In , the Court already mentioned the criteria to be taken into

account in order to distinguish among EU law norms: to produce direct effect, theprovisions concerned must be clear, precise, and unconditional. As the subsequentcase law showed, these criteria were given extensive interpretation, particularly whentreaty provisions were concerned, and the only true requirement became the possibil-ity of effective enforcement, the “justiciability” of the law.8 This led, for example, togranting all free movement provisions direct effect.9

As was already mentioned, the issue of selection, i.e. the identication of directlyapplicable norms, is not an outdated question. The question of selection has re-emergedwith great force concerning the provisions of the Charter of fundamental rights of theEuropean Union. The distinction between “rights” and “principles” contained in thatinstrument resembles a modern and explicit version of the distinction among EU lawprovisions that was implicit in the TEU, and that the Court unveiled in .As Advocate-General Cruz Villalón synthesized: the “principles,” in the Charter, deter-mine the missions assigned to public authorities and are different from “rights,” thepurpose of which is to protect the legal situation of individuals—a situation directly

dened by the text itself.10 Public authorities, Cruz Villalón added, must respect thelegal situation of individuals guaranteed by “rights,” but, as far as “principles” areconcerned, their function is much more open: “principles” dene not individual situ-ations, but rather general matters and outcomes that condition the action of publicauthorities.11

There is a high chance that, in a number of future cases, national courts will turn to theCourt of Justice to identify the Charter’s provisions which are a source of subjective rightsthat they have to protect. The French Cour de Cassation did exactly that, not too long ago:12 in the case of , it questioned the Court of Justice, through thepreliminary ruling procedure, on the direct effect of article 27 of the Charter.13

8 DAMIAN CHALMERS, GARETH DAVIES AND GIORGIO MONTI, EUROPEAN UNION LAW 271 (2d ed. 2010);MARC BLANQUET, DROIT GÉNÉRAL DE L’UNION EUROPÉENNE 281 (10th ed. 2012).

9 On this expansion, Bruno de Witte, Van Gend en Loos, THE PAST AND FUTURE OF EU LAW 11 (Miguel Poiares Maduro & Loïc Azoulai ed, 2010).

10 CJEU Opinion C-176/12 Association de médiation sociale, July 18, 2013.11 On the complexity of the taxonomy implied by the Charter, and more generally, on the ambiguous nature

of “principles” in European Law, Sophie Robin-Olivier, , 1EUR. J. HUM.

RTS. 109 (2013).12 Case C-176/12 Association de médiation sociale v. Union locale des syndicats CGT, Hichem Laboubi,

Union départementale CGT des Bouche-du-Rhône, Confédération générale du travail (CGT), Referencelodged Apr. 16, 2012, pending.

13 Charter of Rights, note 7, art 27 (concerning “workers’ right to information and consultationwithin the undertaking”).






170 12 (2014), 165–188

However, even if the identication of direct effect norms remains important, action(or defense) before national courts can also rest on a combination of legal references.Precisely this method is what Advocate-General Cruz Villalón relied on in

,14

once he had reached the conclusion that article 27 of the Charterbelonged to the category of “principles” and was, on its own, deprived of direct effect.

2.2. Legal effects of normative combination

The rise of fundamental rights, which, in EU law, has been from the outset narrowlytied to the existence of a category of general principles, has shown—as has becomemore obvious with the Charter of Fundamental Rights—that seeking direct effect wasnot always the most appropriate, or the most effective, method of sustaining claimsin situations covered by EU law. In comparison, normative combination could bedescribed as a shift from application of the law to the interpretation of the law, if weset aside the fact that the two operations are tightly intertwined. Direct effect wouldlie on the side of “application,” where normative combination belongs to the realm of“interpretation.” Put differently, some references produce effects directly, while othersare only “considered” or “taken into account” to construe other norms. Besides the factthat this does not correspond to all types of combinations that have emerged in the caselaw of the Court of Justice, the distinction, if any, between application and interpreta-tion of the law is not the point I want to discuss in the following lines. What I would liketo insist on, instead, is the legal force that the Court of Justice accords to different sortsof combination of norms, inasmuch as this solution differs radically from the processof selection of direct-effect norms that was the outcome of .

To begin with, I must admit that “normative combination” is a very synthetic con-cept for a phenomenon including a large variety of cases, which only have in commonthat the solution derives from the use of a series of references, and that these refer-ences, taken separately, would be powerless. However, because what I want to showand question is the shift from direct effect to a radically different way to ensure EU laweffectiveness, I am convinced that various types of combination should be mentioned.They differ according to the source of the norms combined (primary and secondarylegislation; soft and hard law; and EU law, international or national law); the relation-ships between these norms; and the different effects produced by their interaction. Tosimplify, I will conne my remarks to a basic typology, distinguishing between twocategories of combinations.

In therst one, all norms combined belong to EU law: a general principle or a funda-mental right is coupled with a provision of derived legislation. Using such a combina-tion, judges were able to satisfy individual claims, whereas neither of the norms, takenseparately, could produce such effect.

In the more classical version of this association of norms, provisions of the Charterof Fundamental Rights, notwithstanding the uncertainty concerning their directeffect (in the language of the Charter, their identication as “rights” or “principles”)were used to interpret directives in such a way as to allow the rights to be protected14 Case C-176/12 Association de médiation sociale.






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by national courts to emerge. A good illustration is the case,15 in whichthe Court of Justice relied on the aim to ensure a decent existence for all those wholack suf cient resources, as dened in article 34(3) of the Charter, to decide that a

third-country national should have the right to equal treatment in obtaining housingbene ts, according to Directive 2003/109. Similarly, in ,16 the Court decided,referring to the “principle of equal treatment, which is one of the general principlesof European Union law, and whose fundamental nature is af rmed in Article 20 ofthe Charter of Fundamental Rights,” that clause 2.1 of the Framework Agreementon Parental Leave17 “read in the light of the principle of equal treatment” obliges thenational legislature to establish a parental leave regime which, according to the situ-ation in the Member State concerned, ensures that the parents of twins receive treat-ment that takes due account of their particular needs.” It is incumbent upon national

courts, the court added, to determine whether the national rules meet that require-ment and, if necessary, to interpret those national rules, so far as possible, in con-formity with European Union law.”18 To be sure, following , the claim broughtto court may not prove immediately successful; however, the reasoning, which reliedon a combination of norms, implied that the national court and the legislator mustensure that the legitimate demand for equal treatment is satis ed.

This type of case, in which judges use fundamental rights to construe legislative pro-visions, is not uncommon, of course, in other legal orders. To take just one example,German courts do not hesitate to resort to the German Constitution to interpret gen-

eral provisions of the civil code. In a famous case, the Federal Labor Court decided thatthe interpretation of § 315 of the German Civil Code concerning the specication ofperformance by one party, and requiring that this specication be “equitable,” hadto be consistent with article 4. I of the German Constitution, concerning freedom ofthought. As a result, an employer was deprived of the right to oblige his employee toperform a duty con icting with his freedom of thought (producing books glorifyingwar).19 In this case, as in the cases decided by the Court of Justice, the effect of funda-mental rights does not depend on their direct effect, but it is the result of the interpre-tation of other norms, according to the doctrine of consistent interpretation.20

More original, and specic to EU law, are cases in which a directive and a generalprinciple are combined to produce effects, the former being considered a mere “con-cretization” of the latter. This combination, as a method of compensating for the lackof implementation, or defective implementation, of directives, is an instrument spe-cic to EU law that requires transposition in national law. A couple of well-knowncases decided by the Court of Justice demonstrate, in particular, that derived legislation15 C-571/10 Kamberaj, Apr. 24, 2012, unreported.16 C-149/10 Chatzi, Sept. 16, 2010, unreported.17 Framework agreement on parental leave concluded on 14 December 1995, which is set out in the annex

to Council Directive 96/34/EC of 3 June 1996 on the framework agreement on parental leave concludedby UNICE, CEEP and the ETUC, 1996 O.J. (L 145) at 4.

18 C-149/10 Chatzi, ¶ 75.19 Bundesarbeitsgericht [Federal Labor Court] Dec. 20, 1984, 2 AZR 436/83, NZA 1986, p. 21 (Ger.).20 Consistent interpretation raises other issues, in terms of effectiveness of EU law in national courts, which

we will address in Section 3.






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gains force when it can be considered as implementing a general principle of law orfundamental rights. In 21 and ,22 quite remarkably, the generalprinciple of non-discrimination compensates for the absence of horizontal direct

effect of Directive 2000/78/EC on Equal Treatment in Employment and Occupation.23

Conversely, the directive is necessary because the jurisdiction of EU law—and theapplicability of the general principle in a given case—depends on it. The outcome ofthis clever duo, as the Court pointed out in , is that,

European Union law, more particularly the principle of non-discrimination on grounds of ageas given expression by Directive 2000/78, must be interpreted as precluding national legisla-tion, such as that at issue in the main proceedings, which provides that periods of employmentcompleted by an employee before reaching the age of 25 are not taken into account in calculat-ing the notice period for dismissal.24

Thus, coupled with the provisions of a directive, general principles of law can, eventu-ally, have the same effect as rights that individuals can claim in national courts againstother individuals. This method is the one that Advocate-General General Cruz Villalónsuggests in its recent opinion in :25 the principle con-tained in article 27 of the Charter, concretized in article 3 of Directive 2002/14,26 precludes, he contends, national legislation that excludes some workers from beingtaken into account when calculating the number of employees of the company inorder to ensure information and consultation.

The virtue of the association of a general principle and the provisions of a direc-tive can also lie in an extension of theeld of application of the derived legislation. In

,27 for instance, the scope of application of directives on equal treatment of menand women was extended to include a person whose status as a worker was uncertain.Referring to the principle of non-discrimination of men and women, and article 23 ofthe Charter of Rights, the Court decided that:

[I]t is of no consequence, whether Ms Danosa falls within the scope of Directive 92/85 or ofDirective 76/207, or—to the extent that the referring court categorises her as “a self-employedperson”—within the scope of Directive 86/613, which applies to self-employed person. . . .

And it added: , it is important to ensure, for the person concerned, the protection

granted under EU law to pregnant women in cases where the legal relationship linking her toanother person has been severed on account of her pregnancy.28

21 C-144/04 Mangold, 2005 E.C.R. I-09981.22 C-555/07 Kücükdeveci, 2010 E.C.R. I-00365.23 Council Directive 2000/78/EC of Nov. 27, 2000 Establishing a General Framework for Equal Treatment

in Employment and Occupation, 2000 O.J. (L 303) 16.24 C-555/07 Kücükdeveci, ¶ 43.25 Case C-176/12 Association de médiation sociale.26 Directive 2002/14/EC of the European Parliament and of the Council of Mar. 11, 2002 Establishing

a General Framework for Informing and Consulting Employees in the European Community—JointDeclaration of the European Parliament, the Council and the Commission on Employee Representation,2002 O.J. (L 80) 29.

27 C-232/09 Danosa, 2010 E.C.R. I-11405.28 § 70 of the Danosa case, note 7, § 70.






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Eventually, it remained a mystery which directive should apply, but that did not matterto the Court: the claimant obtained the right to equal treatment.

Another category of combinations covers a variety of sources that do not all belong

to the EU legal order. In the

eld of fundamental rights’ protection, this phenomenonreaches beyond the borders of EU law and, again, it is not our objective to demonstratethat EU law is singular in this respect. In terms of normative combination and theuse of a variety of instruments that do not belong to its own legal order, the ECJ takesa path that a number of other courts sometimes follow. At the European Court ofHuman Rights, for example, the decision in 29 is a perfectillustration of a reasoning involving a series of sources of different origin and nature.30

Most striking, in this category of cases, is the recourse to international law (bywhich I mean norms other than the European Convention on Human Rights (ECHR),

which has a very specic status in EU law31

). Of course, international law is oftenrelied on, alongside EU norms, because in a number of instances it is binding on EUinstitutions. One recent example is .,32 where the Court of Justice relied on “theduty of the Member States” to interpret and apply Regulation 343/2003 in a mannerthat ensures due respect of the Geneva Convention of July 28, 1951 and the Protocolof January 31, 1967 relating to the status of refugees, and other relevant treaties(as required by art. 78 of the TFEU). The more recent33 and cases34 are other examples. In these cases, the Court of Justice decided that Directive2000/78 on equal treatment in employment and occupation35 had to be construed

according to the UN Convention on the Rights of Persons with Disabilities ratied bythe EU.36 Taking into account the UN Convention has led to an extension of the scopeof EU legislation, and as a result, in , rights could be claimed under the Directive.But as also shows, even when international law is binding on the EU, the combi-nation of EU and International law, is not at all a simple story.37 Without entering toomuch into this thorny problem, the case gives an idea of this complex relationship

29 Demir and Baykara v. Turkey, App. no. 34503/97, Eur. Ct. H.R., Nov. 12, 2008.30 To interpret art. 11 of the European Convention, the Court referred to the Right to Organise and

Collectively Bargaining Convention (ILO No. 98), 96 U.N.T.S. 257, entered into force July 18, 1951, andto the interpretation of this convention by the ILO’s Committee of Experts. It also mentioned LabourRelations (Public Service) Convention (ILO No. 151), 1218 U.N.T.S. 87, entered into force Feb. 25, 1981.Among European instruments, the Court used art. 6(2) of the European Social Charter, Oct. 18, 1961,529 U.N.T.S. 89, E.T.S. No. 35 (which the state concerned, Turkey, has not rati ed), according to whichall workers and all unions are granted the right to bargain collectively. The court also found support inthe meaning attributed to this provision by the European Committee of Social Rights (ECSR). Charter ofRights, note 7, art. 28 was also quoted.

31 On that point, most recently, Case C-617/10, Åkerberg, Feb. 26, 2013, unreported, § 44.32 Joined Cases C-411/10 and 493/10 N.S. and others, Dec. 21, 2011, unreported.33 Joined Cases C-335/11 and C-337/11, Ring, Apr. 11, 2013, unreported, concerning the notion of

disability.34 Case C-312/11, Commission v. Italy, July 4, 2013, unreported, concerning the notion of reasonable

accommodation.35 Case C-312/11, Commission v. Italy.36 The Convention was signed by the EU on Mar. 30, 2007, and formally rati ed on Dec. 23, 2010.37 On see topic, JEAN-SYLVESTRE BERGÉ, L’APPLICATION DU DROIT NATIONAL, INTERNATIONAL ET EUROPÉEN (2013).






174 12 (2014), 165–188

and of theexibility of the law that goes with it: “the primacy of international agree-ments concluded by the European Union over instruments of secondary law,” statedthe Court, “means that those instruments must be interpreted in a

manner that is consistent with those agreements.” What happens if such consistentinterpretation is not possible?38 International law is, at least temporarily, paralyzed. Aswe will see in more detail below (Section 3), the same is also true of the relationshipbetween EU law and national law when the former does not have direct effect.

This situation, in which EU law is bound (although with some degree of exibil-ity) by international law, is different from one in which international law, withoutbeing part of the European legal order, is used in a comparative way, in order to showconvergence towards a certain interpretation of a right or the recognition of a fun-damental right.39 This “consensual” method,40 comparable to the method used by

the Court of Human Rights in the case,41

was appliedin the famous 42 and 43 cases, where the fundamental right to collectiveaction was recognized. In these two cases, the Court quoted, among other references,the European Social Charter, signed at Turin on October 18, 1961 and ConventionNo. 87 concerning Freedom of Association and Protection of the Right to Organise,adopted on July 9, 1948 by the International Labour Organisation.44 More recently,in ,45 concerning the right to collective bargaining, the Courtrelied, once again, on article 6 of the European Social Charter.

If this method remains exceptional, the fact that it is enforced in such important

and dif cult cases suggests that it must be taken seriously. To be sure, the cases do notgive much force to the fundamental rights that they identify, based on convergenceof a series of legal instruments. Rights are brought to life, but without any effect inthe cases concerned. The effectiveness of EU law, as far as these rights are concernedappears illusory. But this does not dwarf the potential ef ciency of the process ofcombination.

Considering the different categories of normative combinations that contribute tothe development of EU law, it is no exaggeration to say that the effects of EU law innational courts no longer depend on the identication of norms capable of producing

38 On this aspect of the case, AUGUSTIN BOUJEKA, RECUEIL DALLOZ 1388 esp. §§ 7–8 (2013).39 On this type of combination, Sophie Robin-Olivier,

, EUROPEAN LEGAL METHOD: SYNTHESIS OR FRAGMENTATION? 307 (UllaNeergaard, Ruth Nielsen & Lynn Roseberry eds, 2011); Sophie Robin-Olivier,

, 11 CAMBRIDGE YEARBOOK OF EUROPEAN LEGAL STUDIES 377 (Catherine Barnard & Okeoghene Odudu eds, 2009).

40 On this method, Cesare Pitea, , INTERNATIONAL COURTS AND THE DEVELOPMENT

OF INTERNATIONAL LAW, ESSAYS IN HONOR OF PROF. TULLIO 545 (Nerina Boschiero, Tullio Scovazzi, Cesare Pitea &Chiara Ragni eds, 2013).

41 Demir and Baykara v. Turkey, App. no. 34503/97, Eur. Ct. H.R., Nov. 12, 2008.42 C-438/05 The International Transport Workers’ Federation and The Finnish Seamen’s Union, 2007

E.C.R. I-10779 [hereinafter Viking].43 C-341/05 Laval un Partneri, 2007 E.C.R. I-11767 [hereinafter Laval].44 C-438/05 Viking, ¶ 43; C-341/05 Laval, ¶ 90.45 C-271/08 Commission v. Germany, 2010 E.C.R. I-07091.






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certain legal effects. Rather, it has become crucial to take into account the fact that EUlaw provisions are often effective when articulated with one another, or with normsborrowed from other legal systems, which are not necessarily binding, but can allow

for an evolutive interpretation of the law. Although this phenomenon remains limited,considering the modest number of cases, especially when identifying new fundamen-tal rights is at stake, it indicates that the effects of EU law norms can depend not ontheir intrinsic nature, but on their association with other references. As a result, thereis space, I believe, for a theory of “combined effects” of norms in the EU legal order,a multifaceted model that would depart quite radically from the self-executing andself-suf cient norm celebrated in . This new model can be a sourceof increased effectiveness of EU law in national courts. It can also be seen as the out-come of an adaptation of legal actors, faced with the congenital weakness or incom-

pleteness that characterizes some provisions of European law: building constructiverelationships between norms in order to compensate this weakness has become anessential part of legal reasoning.

3. From rights to obligations, and exible effects of EU lawin national courtsA second line that can be drawn from comes from this essential ele-

ment of the case: direct effect was de

ned as a mechanism, through which individualscould obtain in member states’ courts, based on EU law and, more precisely andmore importantly, on provisions of primary law. Although this was not absent in

, the evolution of EU law, since the case was decided, has allowed that,in a larger number of hypotheses, individuals be brought before national courts, onthe basis of obligations imposed on them by provisions of the treaties. With so-calledhorizontal direct effect, EU primary law has shifted away from the dominant concernthat permeated : submitting states to an orthopedic treatment aimedat reforming their public policies, along the lines of internal market’s requirements.

In that respect, however, the evolution can still be seen as a continuation of : the effectiveness of EU law could justify, to some extent, the submission of pri-vate actors to TFEU, and to internal market rules in particular. In comparison, it is nolonger a mere extension of direct effect, when, in the absence of direct effect, nationalcourts are required to interpret national law in conformity with European Union law:under the “indirect horizontal effect” doctrine, the effects of EU law become dependenton the capacity of national courts to tailor national law to European fashion, a made-to-measure approach contrasting with uniform requirement fornational courts to grant subjective rights.

3.1. Vertical direct effect as a source of subjective rights

As opposed to the French version of the case, the Italian version of isexplicit about the fact that individuals can claim on the basis of treatyprovisions. The case made it clear that the treaty was available to entertain private






176 12 (2014), 165–188

claims in municipal courts. As a result, not only would citizens of member states ben-e t directly from the treaty, but they would, as the court pointed out, exercise “aneffective supervision” on member states to ensure that they respect EU law require-

ments. Individual rights derived from the Treaty were key, as through them EU lawcould penetrate national legal orders and transform them. And it did. In particular,when direct effect of common market rules was af rmed, it became clear that memberstates would have to face requests based on free movement of goods, persons, capitalor free provision of services and, as a consequence, would have to reform their systemsof regulation in many differentelds.46

Although the Court also mentions in that the treaty imposes obli-gations on individuals, the lesson from that particular case was that national courtshad to protect individual rights, not that they had to make sure that obligations deriv-

ing from the treaty were enforced against individuals. At the time, the obligationsbinding on individuals were indeed quite limited. Competition law was an importantsource of such obligations, as antitrust rules and the prohibition of abuse of a domi-nant position were explicitly targeting the behavior of private companies. They still do,of course, and continue to frame the behavior of private economic actors. But whathas been a major source of extension of obligations binding on private parties is therecognition of a horizontal direct effect47 to treaty provisions concerning the inter-nal market. This evolution has raised new questions concerning the consequences ofdirect effect of treaty provisions.

3.2. Horizontal direct effect and the problem of submitting individualsto free market rules

The evolution that led to the recognition of horizontal direct effect to Treaty provi-sions, and, in particular, free movement rules has gone, until recently, largely unno-ticed. One reason for this is that the extension was only apparent in rare cases (and notnecessarily very clear in all of them). As a result, it did not seem to imply importantchanges at once. The story has been told many times,48 but recent examples havebrushed away, it seems, obstacles or limits to the horizontal direct effect of free move-ment rules, even if the Court of Justice has, not so long ago, continued to suggest thatfree trade provisions of the EU treaty were public law rules.49

46 For a recent example, in the eld of gambling, C-347/09 Dickinger and Ömer, 2011 E.C.R. I-08185.47 On the notion of horizontal effect, , Achim Seifert, , 48

REVUE TRIMESTRIELLE DE DROIT EUROPÉEN 801 (2012).48 , Stefaan Van den Bogaert, , The Law of the Single European

Market 126 (Catherine Barnard & Joanne Scott eds, 2002); and Stephen Weatherhill, , THE PAST AND FUTURE OF EU LAW, note 9, 483.

49 See in particular: Case C-159/00 Sapod Audic, 2002 E.C.R. I-05031, ¶ 74: “contractual provision cannotbe regarded as a barrier to trade for the purposes of Article 30 of the Treaty since it was not imposed bya Member State but agreed between individuals.” The court provides no justication for this solution. Onthe public–private distinction concerning free movement rules, ., Okeoghene Odudu, , 46(4)REVUE TRIMESTRIELLE DE DROIT EUROPÉEN 826 (2010) and LoïcAzoulai, , 46(4)REVUE TRIMESTRIELLE DE DROIT EUROPÉEN 842 (2010).






177

In spite of this inconsistency, the language used in 50 is unambiguous: “there isno indication” in case law, the Court of Justice said, that horizontal effect “applies onlyto associations or to organisations exercising a regulatory task or having quasi-legis-

lative powers.” No distinction is made, in particular, between the different types of pri-vate actions, depending on their impact, a distinction that Advocate-General Madurosupported in his opinion in the case. In the subsequent case,51 the Court simplypointed that the right of trade unions to take collective action, whereby undertakingsestablished in other member states may be forced to sign a collective agreement, is liable“to make it less attractive, or more dif cult, for such undertakings to carry out its activ-ity in the State concerned,” and “therefore constitutes a restriction on the freedom toprovide services within the meaning of Article 49 EC” (now art. 56 TFEU). In sum,according to these decisions, only the restriction, or potential restriction, on free exer-

cise of economic freedom matters, regardless of the private action that induces it.Even more striking is the comparison of two cases, one decided in 2000 and theother in 2012. In ,52 it seems, the Court limited to certain hypothesis the horizon-tal application of the non-discrimination rule in a case of free movement of workers:“article 6 of the Treaty also applies in cases where a group or organisation exercisesa certain power over individuals and is in a position to impose on them conditionswhich adversely affect the exercise of the fundamental freedoms guaranteed underthe Treaty.”53 In ,54 in contrast, the Court went much further, bluntly af rmingthat the prohibition of discriminations laid down in article 45(2) TFEU on free move-

ment of workers “applies not only to the actions of public authorities, but also to allagreements intended to regulate paid labour collectively, ”55 As in a previous case,56 one must admit, this solution only concerns the

prohibition of discriminations based on nationality, which may well be a limit to theextension of horizontal effect of free movement rules, and could be justi ed by the par-ticular status of the principle of non-discrimination, as a general principle of EU law.

This possible restriction of horizontal direct effect of free market rules does not callinto question the observation that, in the course of EU law development, private par-ties have been subject to certain provisions of the treaty concerning the realizationof the internal market, that were considered to be binding only on governments atthe time of . Through horizontal direct effect, these provisions of thetreaty stepped into the realm of private law. The “constitutionalization of private law”that this evolution achieves creates a series of problems that the Court of Justice hasnot yet addressed in its case law.57 Rather, although the transposition of a reasoning

50 C-438/05 Viking.51 C-341/05 Laval.52 Case C-411/98 Ferlini, 2000 E.C.R I-8081.53 Case C-411/98 Ferlini, ¶ 50.54 Case C-172/11 Erny, June 28, 2012, unreported.55 . ¶ 36.56 Case C-94/07 Racanelli, 2008 E.C.R. I-05939.57 On the problems of horizontal direct effect of Constitutional law, and in particular EU fundamental free-

doms, ., Hugh Collins, , THE MANY CONCEPTS OF SOCIAL JUSTICE IN EUROPEAN PRIVATE LAW 133, 142–146 (Hans Micklitz ed., 2011. Seifert, note 47.






178 12 (2014), 165–188

designed for cases involving states or other public entities is not necessarily appro-priate, where private law relationships are concerned, the Court of Justice had, untilnow, ignored the need for a separate doctrine when obligations binding on individu-

als are derived from free market rules. This is particularly striking in,58

whichaddressed the justication of restrictive measures: “neither the scope nor the contentof those grounds of justication is in any way affected by the public or private natureof the disputed provisions,” the court contended. Yet, it is clear that justication ofrestrictions by reason of general interest or public good can hardly be available whenprivate actors are responsible for a restriction to free movement. The crucial issue of justication of free movement restrictions, to which the Court and legal scholars havedevoted enormous attention after ,59 remains a virgin land, when pri-vate restrictive conducts are at stake.

In addition, the types of actions and remedies available, in cases of treaty violationsresulting from the behavior of individuals, need to be adapted to the particular situa-tion of private actors.60 While making states liable for free movement restrictions is theinevitable, and acceptable, outcome of their commitments at the EU level, the same isnot true for private actors. In particular, when the latter ful ll a particular economicor social function, which is the case for trade unions or other non-governmentalorganizations, making them liable under free movement provisions may jeopardizetheir very existence. This is not only because of potentially high damages. The unpre-dictability generated by the introduction of constitutional arguments (the reference

to fundamental freedoms) in private law disputes is also problematic. Indeed, uncer-tainty may deter the organizations concerned from taking action, although this actioncan be considered socially useful. Along the same lines, when fundamental freedomsreach the sphere of contractual relations, the resulting disruption in the parties’ com-mitments should also be taken into account. Until now, “insuf cient attention waspaid to the way in which private law has already sought to balance competing rightsthrough its legal doctrines and rules.”61

In comparison, the requirement of consistent interpretation of EU law, a source ofindirect horizontal effect, seems more respectful of existing settlements between com-peting rights.62 The questions it raises are of a different kind, but still closely related tothe effectiveness of EU law in national courts: the issue is not the overbroad conceptionof what the effectiveness of EU internal market law requires (imposing obligations onindividuals), but the variability of this effectiveness when it applies to private relation-ships, depending on the possible interpretations of national law according to nationalcourts. This solution is a far cry from the recognition of direct effect to a treaty provi-sion, which allowed individuals to claim the same right before all national courts.

58 C-172/11 Erny.59 Case 120/78 Cassis the Dijon, 1979 E.C.R. 649.60 For an illustration concerning the issue of sanctions in Swedish courts, after the decision of the Court of

justice in the Laval case (C-341/05), Jonas Malmberg, , 3(1) EUR. LABOUR L.J. 5 (2012).

61 Collins, note 57, at 143.62






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3.3. Indirect horizontal effect and the challenge of variableeffectiveness

The doctrine of indirect effect requires national courts to interpret national law “inthe light” of EU law.63 Indirect effect is a method of ensuring the effect of EU law whendirect effect is missing. As the Court of Justice has stated: “this obligation to interpretnational law in conformity with European Union law is inherent in the system of theTreaty on the Functioning of the European Union, since it permits national courts,for the matters within their jurisdiction, to ensure the full effectiveness of EuropeanUnion law when they determine the disputes before them.”64 If this requirement is“inherent in the system of the Treaty,” as the Court has mentioned, it is also part of amore general trend: recently, domestic courts have, outside any European obligation,relied on the doctrine of indirect effect to give force to international law.65 This methodof internalization of international law, transcending the distinction between monistand dualist systems, has retained much attention, and concern, beyond the frontiersof EU law.66

In EU law, consistent interpretation was used in applying EU law in disputes betweenprivate parties: individuals were subject to EU law provisions, even when those provi-sions had no horizontal direct effect. The requirement of a consistent interpretationimplies consideration of EU law in many cases in which it generates no subjectiverights that can be claimed by an individual, but may still result in unexpected duties orburdens for individuals. Thus, indirect effect contributes, when applied horizontally, toincreased obligations on individuals, resulting from EU law developments.

The progress of harmonization in manyelds of private law,67 criminal law, or taxlaw,68 has resulted in new rights and duties for member states’ citizens, which, in mostinstances, did not need the doctrine of direct effect, nor any theory about the effectsof EU law in national courts, to be enforced: these obligations, having their source inEU directives, only applied after implementation through internal law. However, theimpact of directives themselves in private disputes has become more and more obvious

63 On this doctrine, ., ALLAN ROSAS & LORNA ARMATI, EU CONSTITUTIONAL LAW 72–76 (2012). On the dis-tinction between direct and indirect effect, ROBERT SCHÜTZE, EUROPEAN CONSTITUTIONAL LAW, 2012, 304.

64 Case C-282/10 Dominguez, Jan. 24, 2012, unreported, ¶ 24.65 For an example in German law, Bundesverfassungsgericht [Federal Constitutional Court] Sept. 19,

2006, JZ 62 (2007), at 887 (Ger.), a decision, in which the German Constitutional Court found that theright to a fair procedure guaranteed by the German Constitution had to be interpreted in light of art. 36of the Vienna Convention of Consular Relations, 596 U.N.T.S. 261, entered into force Mar. 19, 1967.

66 ., Gerrit Betlem & André Nollkaemper, ,

14 EUR. J. INT’L L. 569 (2003); and Antonios Tzanakopoulos, , 34 LOY. L.A. INT’L & COMP. L. REV. 133 (2011).

67 For a stimulating re ection on the Europeanization of private law, Daniela Caruso, , 3 EUR. L.J. 3 (1997).

68 For a recent illustration, see C-617/10 Åkerberg, ¶ 24: “tax penalties and criminal proceedings to whichMr Åkerberg Fransson has been or is subject are connected in part to breaches of his obligations todeclare VAT according to EU law.” On that decision,, in particular, Denys Simon, 4 Revue Europe,14 (2013); Michel Aubert, Emmanuelle Broussy & Herve Cassagnadère,

, 20 ACTUALITÉ JURIDIQUE DROIT ADMINISTRATIF 1154, 1154–1156 (2013).






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over time. But, having accepted long ago that directives could have vertical directeffect,69 the Court of Justice has, continuously, refused to give horizontal direct effectto their provisions.70 As a result, directives are still considered not to be binding on indi-

viduals, and should not be a source of obligations for them, the Court continuouslyconrmed.71 However, at the same time, the ECJ’s case law has constructed bypasses,allowing directives to produce effects in private disputes.72 And these bypasses, includ-ing indirect horizontal effect,73 have proved, , to be as powerful as directhorizontal effect.74

At rst, consistent interpretation seems to be a very basic demand, in line with theprinciple of sincere cooperation laid down at article 4(3) TFEU. But, looking closer, it isnot so trivial as it seems.75 Consistent interpretation compels judges to overrule previ-ous interpretations, if needed. This means, possibly, to introduce, without notice, an

unexpected change in the law.76

Of course, overruling also happens in member states’courts, without EU commanding it. But the disruption it creates, depriving citizensof their legitimate expectations, should make it exceptional. As a method prescribedby EU law to give effect to a directive when states have failed to implement it properly,overruling loses its marginality. This is not, to say the least, a satisfying way for EU lawto penetrate national legal systems.

However, the most problematic aspect of consistent interpretation, related to EUlaw effectiveness in national courts, lies elsewhere. The outcome of the order to inter-pret national law in conformity with EU law very much depends on theexibility of

national law. When the provisions of national legislation that are inconsistent withEU law are very clear and precise, according to their interpreters, EU law will havelittle impact, because interpreting is not required.77 When, on the con-trary, the fabric of national law is soft, malleable, or at least considered so by thosein charge of its enforcement, the impact of EU law will be potentially much stronger.As a result, the penetration of EU law into national legal orders depends on nationallegislators, national legislative styles, and national techniques of interpretation. Tobe sure, the Court of Justice does not leave entire discretion to national courts, andrequires that they try as hard as they can to achieve consistent interpretation, whichimplies, for instance, that they take “the whole body of domestic law into consider-ation” and make use of the interpretative methods recognized by domestic law with

69 Case 41/74 Van Duyn, 1974 E.C.R. 1337.70 Case C-91/92 Faccini Dori, 1994 E.C.R. I-03325, and for a recent conrmation, Case C-282/10

Dominguez.71 . Case C-282/10 Dominguez.72 On the different ways to invoke norms of EU law, ., Koen Lenaerts & Tim Corthaut,

, 31EUR. L. REV. 287 (2006).73 For a consecration of this doctrine, Case 14/83 Von Colson, 1984 E.C.R. 01891 and Case C-106/89

Marleasing, 1990 E.C.R. I-04135.74 For a nuance, in theeld of criminal law, Case C-168/95 Arcarao, 1996 E.C.R. I-04705 and

Case C-105/03 Pupino, 2005 E.C.R. I-05285.75 On the power of the duty of consistent interpretation, Lenaerts & Corthaut, note 72.76 Which is exactly what happened in Case C-282/10 Dominguez.77 C-105/03 Pupino.






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a view to ensuring that EU law is fully effective. Eventually, however, it remains clearthat such interpretation is not always possible.78

The resultingexibility concerning the effects of EU law throughout the Union con-

trasts with , a case in which the Court decided what the effect of anEU law norm was going to apply in all states and before all courts. Thisexibility couldbe considered as an aspect of procedural autonomy, a concept that describes and justi-es the limited effectiveness of EU law, in the absence of a complete system of justiceand procedural rules. Because procedural autonomy concerns remedies, it may indeedresult in differences in the enforcement of EU law. But the various consequences of con-sistent interpretation, which depend on national substantive law, would imply a con-siderable extension of that concept. Indeed, the hypothesis is one in which the variationin the implementation of EU law does not depend on the system of justice and proce-

dures, but on the legal force given to the EU provisions concerned, in each nationalcourt: the variation concerns the binding force of the norm. The doctrine of consistentinterpretation admits, contrary to , that it is not possible, for everyindividual, to expect that EU law will have a pre-determined effect, in national courts.

As a result of consistent interpretation, individual claims will thrive in somenational courts, and obligations will be imposed on individuals as a result, whereas,in others, they will be unsuccessful because of the limits in the courts’ power to inter-pret national law. This solution seems quite remote from the idea of direct applicationand full effectiveness of EU law: beyond procedural autonomy, EU law effectiveness

is made dependent on the specicity of national substantive laws and methods ofinterpretation.If this is acceptable, and the effect of EU law in national courts can differ depend-

ing on the substance of national law and the techniques of interpretation available tonational courts, there may be a case for more exibility in other instances, in particu-lar when applicability of constitutional rights is concerned.

4. From application to applicabilityAccording to , national courts “must” apply treaty provisions, andprotect individual rights that they create. The mission entrusted to national courtsin that case imposed “role splitting”:79 national judges were required to act both asorgans of national and European judiciary, and apply the rules emanating from twodifferent legal orders. Fifty years after , it is still not absolutely surethat all national courts have fully understood, and accepted, that role. Looking, forinstance, at the variations in the use of the preliminary ruling procedure amongnational courts80 suf ces to indicate that national contexts have some inuence on

78 C-282/10 Dominguez, ¶¶ 30–31.79 On this theory and its application to EU law, Antonio Cassese,

dédoublement fonctionnel , 1(1)EUR. J. INT’L L. 210 (1990).80 For recent statistics, the Annual Report of the Court of Justice for 2012 (2013),http://curia.europa.

eu/jcms/jcms/Jo2_7000/%202013.






182 12 (2014), 165–188

the impact of EU law in national courts. However, in terms of effective application ofEU law norms in national courts, there is little doubt that direct effect, coupled withpreliminary references, contributed extensively to effective application of EU law. The

“collaboration” of national courts with the Court of Justice81

was rightly considered adecisive source of EU law effective enforcement.Today, the issue of EU law enforcement in national courts is faced with another

major challenge: the uncertainty concerning the applicability of EU law. In recenttimes, this question has been particularly visible, and strenuous, in theeld of fun-damental rights’ protection. On one side, the question is one of applicability of EUlaw provisions protecting fundamental rights. It has, indeed, become a more acuteissue since the Charter of Fundamental Rights has gained the same legal value asthe Treaties with the Lisbon Treaty,82 and at a time when it is settling in the EU legal

environment. To be sure, this does not mean that applicability has not been a majorconcern in other elds, such as free movement of citizens, as the saga illus-trated,83 but the issue concerning the applicability of the Charter of FundamentalRights has a much broader scope. On the other hand, fundamental rights’ protectionby national courts depends on the applicability of national constitutions protectingthese rights and freedoms. In this respect, the question that arises, and that nationalcourts have to face, concerns the restriction to the protection of fundamental rightsgranted by national constitutions, which is, or should be, required in order to ensureeffectiveness of EU law. The ever-growing impact of EU policies on fundamental rights

has brought to the fore the question of the limits to the effectiveness of EU law whichwould leave room for national constitutions. This issue touches on a tension deeplyrooted in the history of EU federalism.

Considered from these two angles, the protection of fundamental rights appears asone of the most important domains, if not the most important, in which EU law effect-iveness is challenged, these days, in relation with the issue of applicability of EU andnational law. This has been illustrated in recent important cases. Correlatively, “rolesplitting” is no longer the new frontier for national courts, but their mission to ensurea distribution of roles, when confronted with a plurality of sources of protection offundamental rights and freedoms. Some of the hardest questions, for national courts,are no longer whether EU law contains rights that they have to protect, but rather, onthe one hand, whether fundamental rights embedded in EU law can apply in the casebefore them (a question of applicability of fundamental rights protected by the EU)and, on the other hand, whether they have power, and to what extent, to guarantee ahigher degree of protection of fundamental rights on the basis, for example, of theirown constitution, even if the situation lies within the scope of EU law (a question ofapplicability of constitutional or international law, in situations falling under EU law).

81 See ECJ Opinion 1/09, Mar. 8, 2011, E.C.R. I-1137, ¶ 69.82 . the Consolidated Version of the Treaty on the Functioning of the European Union art. 6(1), 2008 O.J.

C 115/47 [hereinafter TFEU].83 Case C-34/09 Ruiz Zambrano, 2011 E.C.R. I-01177; Case C-434/09 McCarthy, 2011 E.C.R. I-03375;

Case C-256/11 Dereci, 2011 E.C.R. I-11315.






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The answers to both questions are crucial for the enforcement of EU law in memberstates’ courts. The applicability of fundamental rights protected by EU law would bea mundane question, although no less tricky, for that matter, on the jurisdiction of

EU law, if the question had not given rise to recent developments in the case law ofthe Court of Justice that need to be confronted with the doctrine of EU law effective-ness in national courts. As far as the applicability of national constitutional rights isconcerned (or rather, as the case law shows, the refusal, by the Court, to accept thisapplicability), recent developments do not only show that the need to ensure EU laweffectiveness, an heritage of , resists the passage of time: the questionconcerning there being room for national law when the fabric of EU law is only looselywoven, has become more crucial than ever.

4.1. Applicability of fundamental rights protected by the EUSince the Charter of Fundamental Rights has been proclaimed, and, even more so,since the Lisbon Treaty conferred the status of primary law on that instrument, thedelimitation of its scope of application has been a major concern and a source ofuncertainty in national courts in charge of enforcing EU law, as madeclear. Interpretations of article 51(1) of the Charter, according to which the Charteronly applies to member states “when they are implementing EU law,” are not unani-mous. Whether this provision should be narrowly construed to include only situationsof actual implementation of EU law or should be interpreted more extensively to allowEU fundamental rights to apply in all situations falling within the scope of EU law, hasbeen the source of important debates.84

Recently, in the case, the Court of Justice showed preference for the exten-sive approach.85 Questioned on the application of the principle laid downin article 50 of the Charter to criminal proceedings and tax penalties for tax evasion,the Court answered that “in essence, the fundamental rights guaranteed in the legalorder of the European Union are applicable in all situations governed by EuropeanUnion law, but not outside such situations.”86 And the Court went on to explain“that denition of theeld of application of the fundamental rights of the EuropeanUnion is borne out by the explanations relating to Article 51 of the Charter, which,in accordance with the third subparagraph of Article 6(1) TEU and Article 52(7) ofthe Charter, have to be taken into consideration for the purpose of interpreting it.”

84 Most recently, Sara Iglesias Sanchez, , 49 COMMON MKT L. REV. 1565 (2012); Heidi

Kaila, , CONSTITUTIONALISING THE EU JUDICIAL SYSTEM ESSAYS IN HONOUR OF PERNILLA LINDH 291 (Pascal Cardonnel,

Allan Rosas & Nils Wahl eds, 2012); Thomas Von Danwitz & Katharina Paraschas, , 35

FORDHAM INT’L L.J. 1396 (2012); Koen Lenaerts, , 8EUR. CONST. L. REV. 3, 375 (2012).

85 C-617/10 Åkerberg. On this extensive approach, ., Jean-François Akanji-Kombé, , 5(191) JOURNAL DE

DROIT EUROPÉEN 184 (2013).86 C-617/10 Åkerberg, ¶ 19.






184 12 (2014), 165–188

According to those explanations, “the requirement to respect fundamental rightsdened in the context of the Union is only binding on the Member States when theyact in the scope of Union law.”87 And it is “the applicability of European Union law”

that determines “applicability of the fundamental rights guaranteed by the Charter.”88

The line drawn by the Court relies, eventually, on the notion of implementation,distinguished from a stricter notion of “transposition”: the Court insists that tax pen-alties and criminal proceedings at stake, even not adopted in order to an EUdirective, are meant to an obligation imposed on the member states by theTreaty. As a result, the concept of “implementation,” construed extensively, becomesthe central criterion. Therefore, to answer the question of EU law effects, nationallaw must scrutinize national law and identify if it ts, or not, within the notion of“implementation.”

As compared to the reasoning suggested by Advocate-General Cruz Villalón in hisopinion on the case, the approach followed by the Court of Justice does not providemuch guidance to national courts. The Court of Justice did not accept the idea that“the competence of the Union to assume responsibility for guaranteeing the funda-mental rights vis-à-vis the exercise of public authority by the Member States whenthey are implementing Union law must be explained by reference to a specic interestof the Union in ensuring that that exercise of public authority accords with the inter-pretation of the fundamental rights by the Union” and that “the mere fact that suchan exercise of public authority has its ultimate origin in Union law is not of itself suf-cient for anding that there is a situation involving the ‘implementation’ of Unionlaw.”89 If the applicability of the Charter had been considered to depend on “the pres-ence, or even the leading role, of Union law in national law in each particular case,”90 that would have required national courts to assess the intensity of the role of UnionLaw in each eld. Admittedly, that would not have been an easy test in all cases; but itwould have given national courts a more precise guideline than the solution derivingfrom . In the absence of such a guideline, the effectiveness of EU law, as far asfundamental rights are concerned, remains very uncertain.

4.2. Applicability of constitutional rights in situations covered by EUlaw: testing the resistance of EU law effectiveness

Having considered the applicability of fundamental rights protected by EU law, it mayseem abrupt to turn to the protection granted by national constitutions in situationssubmitted to EU law. It is not. As shows, the two questions are closely con-nected. In that case, after dealing with the applicability of the Charter, the Court envis-aged the possible application of national standards of protection of fundamental rights.

Until now, the Court of Justice has been faithful to the philosophy of ,

requiring national courts, in case of conict, to enforce EU law, including obligations

87 . ¶ 20.88 ¶ 21.89 ¶ 40 of the Opinion.90 ¶ 41 of the Opinion.






185

or coercive measures resulting from EU legislation, even if this was inconsistent withconstitutional rights. This orthodoxy can be justied, in part, by the fact that protec-tion of fundamental rights is supposed to be ensured through integrating fundamental

rights protection in the process of drafting legislation, in order to make sure that thoserights are not violated, where high risks exist that such violations occur (in suchelds ascooperation for criminal matters, or immigration law).91 This is a requirement of botharticle 6 TFEU, according to which fundamental rights constitute general principles ofEU law, and article 51 of the Charter of Fundamental Rights, requiring EU institutionsto respect the rights and observe the principles of the Charter.

To take a recent example, such reliance on preventive integration of fundamentalrights was well illustrated in the case92 concerning the European arrest war-rant, in which the Court recalled that article 1(3) of the Framework Decision93 indicates

that the text “shall not have the effect of modifying the obligation to respect fundamen-tal rights and fundamental legal principles as enshrined in Article 6 of the Treaty onEuropean Union,” obligation which “in addition, concern[s] all member states, in par-ticular the Member state issuing and executing the arrest warrant.”94 It added, that,as far as article 47 of the Charter and the right to an effective remedy were concerned,“the provisions of the framework decision already organise a procedure that respectarticle 47 of the Charter, independently of the modalities chosen by member states toenforce that framework decision.”95 Similarly, in ,96 the Court mentioned thatthe framework decision ensures the protection of the rights of defense by providing an

exhaustive list of the circumstances, in which the execution of a European arrest war-rant can be issued in order to enforce a decision rendered 97

However, this is not suf cient to guarantee that constitutional rights are neveraffected by EU legislation. On the contrary, the enforcement of EU law has been chal-lenged in national courts on the basis of member states’ constitutional laws,98 and the

91 This concern to integrate the fundamental rights dimension throughout the process of drafting legisla-tion was thoroughly described by the Commission in its Report on the practical operation of the method-ology for a systematic and rigorous monitoring of compliance with the Charter of Rights, note 7.

92 Case C-168/13 Jeremy F., May 30, 2013, unreported.93 Framework Decision 2002/584 of 13 June 2002 on the European arrest warrant and the surrender pro-

cedures between Member States, as amended by Council Framework Decision 2009/299 of 26 Feb. 2009.94 Case C-168/13 Jeremy F., ¶ 40.95 ¶ 47.96 Case C-399/11 Melloni, Feb. 26, 2013, unreported. On that decision, , Henri Labayle,

, http://www.gdr-elsj.eu; Rostane Medhi, , http://www.gdr-elsj.eu (29 March 2013); Fabienne Gazin,

, 4REVUE EUROPE COMM. 23 (2013).97 Case C-399/11 Melloni, ¶ 44.98 , in particular, the decisions of the German Constitutional Court: Bundesverfassungsgericht [Federal

Constitutional Court] Jul. 18, 2005, BVerfGe 2236/04 (on the law implementing the framework deci-sion on the European arrest warrant, cited above) and Bundesverfassungsgericht [Federal ConstitutionalCourt] Mar. 2, 2010, BVerfGe 256/08, 263/08, 586/08 (on the law implementing Directive 2006/24/EC of the European Parliament and of the Council of Mar. 15, 2006 on the retention of data generatedor processed in connection with the provision of publicly available electronic communications services orof public communications networks and amending Directive 2002/58/EC, O.J. (L 105) 54).






186 12 (2014), 165–188

con ict reaches the Court of Justice, in some instances, through preliminary ruling,as the recent case shows. In , by contrast, the question is about theexact requirements stemming from the EU legislation at stake: the possible con ict

between that legislation and the protection of fundamental rights guaranteed by theConstitution depends on this prior question.99

In , the Spanish Constitutional Court suggested that article 53 of the Chartershould be interpreted as giving a general authorization to member states to apply thestandard of protection of fundamental rights guaranteed by their Constitution, whenthat standard is higher than that deriving from the Charter and, where necessary,to give it priority over the application of provisions of EU law.100 The Court refusedthis interpretation: “the primacy, unity and effectiveness of European Union law,” itconsidered, shall not be compromised. This language was reiterated in .101

Applying the higher standard of protection guaranteed by a national constitution wasrejected, namely, because it would cast “doubt on the uniformity of the standard ofprotection of fundamental rights dened in that framework decision,” “undermine theprinciples of mutual trust and recognition which that decision purports to uphold,”and, therefore, “compromise the ef cacy of that framework decision.”102

Only when some competence remains in the hands of member states, in the pro-cess of transposing EU law in national law, as suggests, can national consti-tutions step in: “where a court of a Member State is called upon to review whetherfundamental rights are complied with by a national provision or measure which, in a

situation , implements the latter for the purposes of Article 51(1) of the Charter, national

authorities and courts remain free to apply national standards of protection of fun-damental rights.”103 In , this opening could not be exploited because memberstates had been deprived of all competence as a result of the uniformization of thelaw: the action of member states, in the domain concerned, was entirely determinedby EU law.

This touches upon one decisive point, for the purpose of applicability of other sourcesof fundamental rights than EU law in a situation covered by EU law: the extent to whichthe action of the member states is determined by European Union law. Determiningthe degree of harmonization, total or partial, and, in the latter case, the remainingpowers of member states, was already an issue, when national Constitutions were notconcerned.104 But the current resistance to EU law inuence, in some constitutional

99 In the case, the con ict is avoided. According to the ECJ: “provided that the application of the FrameworkDecision is not frustrated . . . it does not prevent a Member State from applying its constitutional rulesrelating inter alia to respect for the right to a fair trial” (Case C-168/13 Jeremy F., ¶ 53).

100 Case C-399/11 Melloni, ¶¶ 55 and 56.101 C-617/10 Åkerberg.102 ¶ 63.103 ¶ 29 (emphasis added).104 ., concerning the harmonization achieved by Directive 85/374/EEC of July 25, 1985 on the

approximation of the laws, regulations and administrative provisions of the Member States concerningliability for defective products, OJ L 210, 07/08/1985 p. 29): ECJ, C-52/00 Commission v. France, 2002E.C.R. I-03827.






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courts, makes it more sensitive than before. Indeed, constitutional courts are notalways keen nowadays to follow the direction of direct effect and supremacy.105 In thiscontext, clashes can only be avoided when situations are only partially determined by

EU law, and there remains room for constitutional protection.106

Otherwise, the forces thatnd their origin in continue to resist thechange of times. Undeniably, if the solution proposed by the Spanish ConstitutionalCourt had been accepted, the situation of EU citizens in national courts would havebeen, in a number of cases, very different from the one that brought before the Dutch : in many instances, nationals of member states wouldrequest, and possibly obtain, constitutional protection against coercive measures takenagainst them in the course of implementation of EU law. If the Court of Justice acceptedthat solution, it would, no doubt, limit, albeit only in the particulareld of fundamental

rights’ protection (and not in general), the effectiveness of European Union law.

5. Conclusion: EU law effectiveness reconsideredImportant as it is for European integration, effectiveness of European Union law is notabsolute. And this is not only the outcome of procedural autonomy. As the requirementof consistent interpretation illustrates, for instance (see Section 3 of this article), thereare hypotheses in which it is accepted that EU law should yield, at least temporarily,when confronted to the resisting substance of national law. And this does not under-mine the presence of EU law in national courts where it is quite clear that not only theincreased domain, but also the evolutive reasoning that characterizes the developmentof EU law, call for an extension, rather than a retraction, of EU law inuence. Overall, EUlaw executive force is contingent on the situation of each national legal system (rules,actors), and this is a feature of the system of EU law. That is already a reason why effec-tiveness does not stand as a very strong argument to justify that constitutional protec-tions be set aside, even in cases in which the solution is entirely determined by EU law.

At the time of , it was probably dif cult to imagine that the impactof EU policies on individual rights and freedoms would become a major concern. Today,no one contests that the protection of fundamental rights has become a central issue,especially in the development of the area of freedom, security, and justice.107 In thoseelds, the reasoning and principles that were crafted for the achievement of the internal

105 , the decision of the Polish Constitutional Court, Dec. 16, 2011, SK 45/09, in which that courtconsidered that it had the power to review, on the basis of the Polish Constitution, EU Regulation44/2001 of Dec. 22, 2000 on jurisdiction and the recognition and enforcement of judgments in civil andcommercial matters, 2001 O.J. (L 012).

106 This was exactly what happened in the cases decided by the German Constitutional Court,Bundesverfassungsgericht [Federal Constitutional Court] July 18, 2005, BVerfGe 2236/04.

107 On this point, Henri Labayle, , 50TH ANNIVERSARY OF THE JUDGMENT IN V AN G END EN L OOS 1963–

2013. CONFERENCE PROCEEDINGS, at 197 (CJEU 2013), http://curia.europa.eu/jcms/ jcms/P_95693/. For a summary, Henri Labayle, VanGend en Loos, Working Paper no. 5 (May 23, 2013),http://www.gdr-elsj.eu/2013/05/29/elsj/working-paper-n-5-refonder-lelsj-a-la-lumiere-de-la-jurisprudence-van-gend-en-loos/.






188 12 (2014), 165–188

market are not always well-suited, although they may apply at the moment. More gen-erally, there is a distinction to be made between the possibility for individuals to obtainthat the interests they draw from EU law are effectively protected in national courts,

and the situation in which individuals are brought to courts and held responsible fortheir actions under European law. As these situations becomes more frequent, namelyin relation to the development of EU policies, it becomes urgent to reconsider the effectsof EU law in member states in order to avoid a decline of individual rights and free-doms resulting from EU law enforcement. The same is true when a situation cannot bedescribed in terms of reduced protection, but is one in which a European conception ofa fundamental right or freedom opposes, without solid justication, the national con-ception of the same right. This hypothesis was illustrated in the recent case.108 In that case, the Court based its interpretation of the directive on transfers of

undertakings109

on a particular conception of the freedom to conduct a business laiddown by article 16 of the Charter, which includes, according to the decision, freedomof contract. This interpretation was preferred to the British conception of contractualfreedom, which would have to allowed enforcement of the terms of a private contract.

To avoid such solutions, judicial discretion, at national courts’ level, could be a ten-tative method. By judicial discretion, I only mean granting a margin of appreciation tonational courts in cases in which enforcement of EU law impacts fundamental rightsor freedoms. Inspiration can be found, , in the relationships enter-tained by courts of different legal orders (the European Court of Human Rights and

the Court of Justice of the European Union, for instance), where mutual trust goestogether with some retained sovereignty. But if national courts are allowed to enforceconstitutional rights, this cannot happen without restriction. The disruption to thebasic principles of EU federalism needs to be contained and occur only in cases inwhich it is particularly important that national constitutional rights are not called inquestion. In this perspective, article 4(2) TEU must be considered:110 it can justify thatnational constitutional law prevails,111 and, at the same time, avoid abuses. If, accord-ing to article 4(2) TEU, the Union must respect “member states national identities,inherent in their fundamental structures political and constitutional,” national courtsshould be able to set aside EU law provisions in order to preserve their national identitywhenever it is threatened by the application of EU law. In addition to this condition,national courts’ discretion could also be limited by taking into account the need toensure that the essential objective pursued by EU law, in the particulareld, can still beful lled. Teleological interpretation, a traditional method of interpretation of EU law,would serve, this time, to circumscribe, not expand, EU jurisdiction.

108 Case C-426/11 Alemo-Herron and others, July 18, 2013, unreported.109 Directive 2001/23 of March 12, 2001 on the approximation of the laws of the Member States relating

to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts ofundertakings or businesses, 2001 O.J. (L 016).

110 On the interpretation of this article, ., Armin von Bogdandy & Stephan Schill, , 48 COMMON MKT L. REV. 1417 (2011).

111 On this idea, Damian Chalmers & Luis Barroso, Van Gend en Loos , 12(1)INT’L J. CONST.L. 105 (2014), suggesting that art. 4(2) be granted direct effect.
































































JUDGMENT OF 13. 11. 1990 —CASE C 106/89

JU D G M E N T OF T H E CO UR T (S ix th Chamber )13 November 1990 *

In Case C-106/89,

R E FE R E N C E to the Cou rt under Article 177 of the EE C Treaty by the Juzg ad ode Primera Instancia e Instrucción (Court of First Instance and Examining Magis-trates Court) No 1, Oviedo, Spain, for a preliminary ruling in the proceedingspending before that court between

Marleasing SA

and

La Comercial Internacional de Alimentación SA

on the interpretation of Article 11 of the First Council Directive 68/151/EEC of 9March 1968 on coordination of safeguards which, for the protection of theinterests of members and others, are required by Member States of companieswithin the meaning of the second paragraph of Article 58 of the Treaty, with aview to makin g such safeguards equivalent thro ugh out the C om m un ity (OfficialJournal, English Special Edition 1968 (I), p. 41),

THE COURT (S ix th Chamber ) ,

composed of: G. F. M ancin i, President of Chamber, T. F. O Higgins, M . Díez deVelasco, C. N. Kakouris and P. J. G. Kapteyn, Judges,

Advocate General: W. van Gerven

Registrar: H. A. Rühi, Principal Administrator,

after considering the written observations submitted on behalf of

M arleasing SA, by José R am ón Buzó n Ferrerò, of the Ovied o B ar,* Language of the case: Spanish.

I 4156



MARLEASING

the Commission of the European Communities, by its Legal Adviser AntonioCaeiro and by Daniel Calleja, a member of its Legal Department, acting as Agents,

having regard to the Report for the Hearing and further to the hearing on 6 June1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 12July 1990,

gives the following

Judgment

1 By ord er of 13 M arch 1989, which was received at the Co urt on 3 April 1989, theJu zg ad o de Primera Instancia e Instrucción N o 1, Oviedo, referred a question tothe Court pursuant to Article 177 of the EEC Treaty for a preliminary ruling on

the interpretation of Article 11 of Council Directive 68/151/EEC of 9 March 1968on coordination of safeguards which, for the protection of the interests ofmembers and others, are required by Member States of companies within themeaning of the second paragraph of Article 58 of the Treaty, with a view tomaking such safeguards equivalent throughout the Community.

2 T ho se questions arose in a dispute between Marleasing SA, the plaintiff in themain proceedings, and a number of defendants including La Comercial Interna-cional de Alimentación SA (hereinafter re ferr ed to as La Com ercial ). T he latterwas established in the form of a public limited company by three persons,including Barviesa SA, which contributed its own assets.

3 It is app aren t from the grou nd s set ou t in th e ord er for reference tha t M arleas ing sprimary claim, based on Articles 1261 and 1275 of the Spanish Civil Code,according to which contracts without cause or whose cause is unlawful have nolegal effect, is for a declara tion t ha t the f oun ders contract establishing LaCo me rcial is void on the groun d th at the establishm ent of the comp any lackedcaus e, was a sham transactio n and w as ca rried out in ord er to defraud the

I 4157



JUDGMENT OF 13. 11. 1990 — CASE C-106/S9

creditors of Barviesa SA, a co-founder of the defendant company. La Comercialcontended that the action should be dismissed in its entirety on the ground, inparticular, that Article 11 of Directive 6 8 / 1 5 1 , which lists exhaustively the cases in

which the nullity of a company may be ordered, does not include lack of causeamongst them.

4 Th e national cou rt observed th at in accordance with Article 395 of the Actconcerning the Conditions of Accession of Spain and the Portuguese Republic tothe Eu rope an C om mu nities (Official Jo urn al 1985 L 302 , p. 23) the Kingdo m ofSpain was under an obligation to bring the directive into effect as from the date of

accession, but that that had still not been done at the date of the order forreference. Taking the view, therefore, that the dispute raised a problem concerningthe interpretation of Community law, the national court referred the followingquestion to the Court:

Is Article 11 of Council Directive 68/151/EEC of 9 M arc h 1968, which has n otbeen implemented in national law, directly applicable so as to preclude adeclaration of nullity of a public limited company on a ground other than those setout in the said article?

5 Reference is m ade to the R ep or t for the Hearing for a fuller account of the factsof the case, the course of the procedure and the observations submitted to theCourt, which are mentioned or discussed hereinafter only in so far as is necessaryfor the reasoning of the Court.

6 W ith regard to the question wh eth er an individual m ay rely on the directiveagainst a national law, it should be observed that, as the Court has consistentlyheld, a directive may not of itself impose obligations on an individual and, conse-quently, a provision of a directive may not be relied upon as such against such aperson (judgment in Case 152/84 Marshall v Southampton and South WestHampshire Area Health Authority [1986] E C R 723).

7 Ho we ver, it is app aren t from t he docum ents before the C ou rt that the nationalcourt seeks in substance to ascertain whether a national court hearing a case whichfalls within the scope of Directive 68/151 is required to interpret its national law inthe light of the wording and the purpose of that directive in order to preclude a

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MARLEASING

declaration of nullity of a public limited company on a ground other than thoselisted in Article 11 of the directive.

8 In or de r to reply to tha t que stion , it shou ld be observed that, as the Co ur t pointedout in its judgment in Case 14/83 Von Colson and Kamann v LandNordrhein W estfalen [1984] ECR 1891, parag raph 26, the M em ber States obli-gation arising from a directive to achieve the result envisaged by the directive andtheir duty under Anicie 5 of the Treaty to take all appropriate measures, whethergeneral or particular, to ensure the fulfilment of that obligation, is binding on allthe authorities of Member States including, for matters within their jurisdiction,

the courts. It follows that, in applying national law, whether the provisions inquestion were adopted before or after the directive, the national court called uponto interpret it is required to do so, as far as possible, in the light of the wordingand the purpose of the directive in order to achieve the result pursued by the latterand thereby comply with the third paragraph of Article 189 of the Treaty.

9 It follows tha t the req uire m ent that nation al law must be interpreted in conform itywith Article 11 of Directive 68/151 precludes the interpretation of provisions ofnational law relating to public limited companies in such a manner that the nullityof a public limited company may be ordered on grounds other than those exhaus-tively listed in Article 11 of the directive in question.

10 W ith regard to the interpr etatio n to be given to Article 11 of the directive, in

particular Article l l ( 2 ) (b ) , it should be observed that that provision prohibits thelaws of the Member States from providing for a judicial declaration of nullity ongrounds other than those exhaustively listed in the directive, amongst which is theground that the objects of the company are unlawful or contrary to public policy.

11 According to the Com mission, the expression Objects of the company must beinterpreted as referring exclusively to the objects of the company as described inthe instrument of incorporation or the articles of association. It follows, in theCo mm ission s view, that a declara tion of nullity of a com pany ca nn ot be mad e onthe basis of the activity actually pursued by it, for instance defrauding thefounders creditors.

I - 4159



JUDGMENT OF 13. 11. 1990 —CASE C 106/89

12 T h at arg um en t m ust be upheld. As is clear from the pream ble to Directive 68 /151 ,its purpose was to limit the cases in which nullity can arise and the retroactiveeffect of a dec lara tion of nullity in ord er to ensure certa inty in the law as rega rds

relations between the comp any and third parties, and also betwee n mem bers (sixthrecital). Furthermore, the protection of third parties must be ensured by provisionswhich restrict to the greatest possible extent the grounds on which obligationsente red into in the na m e of the com pan y are not valid . It follows, ther efore , tha teach ground of nullity provided for in Article 11 of the directive must be inter-preted strictly. In those circumstances the words Objects of the company must beunderstood as referring to the objects of the company as described in theinstrument of incorporation or the articles of association.

1 3 T he answ er to the question submitted m ust therefore be that a national cou rthearing a case which falls within the scope of Directive 68/151 is required tointerpret its national law in the light of the wording and the purpose of thatdirective in order to preclude a declaration of nullity of a public limited companyon a ground other than those listed in Article 11 of the directive.

Costs

The costs incurred by the Commission of the European Communities, which hassubmitted observations to the Court, are not recoverable. As these proceedings are,in so far as the parties to the main proceedings are concerned, in the nature of astep in the action pending before the national court, the decision on costs is amatter for that court.

On those grounds,

THE COURT (S ix th Chamber ) ,

in answer to the question referred to it by the Juzgado de Primera Instancia eInstrucción No 1, Oviedo, by order of 13 March 1989, hereby rules:

A national court hearing a case which falls within the scope of Council Directive68 151 EEC of 9 March 1968 on coordination of safeguards which for theprotection of the interests of members and others are required by Member States

I 4160



MARLEASING

of companies within the meaning of the second paragraph of Article 58 of theTreaty, with a view to making such safeguards equivalent throughout theCommunity, is required to interpret its national law in the light of the wording and

the purpose of that directive in order to preclude a declaration of nullity of a publiclimited company on a ground other than those listed in Article 11 of the directive.

Mancini O Higg ins

Diez de Velasco Kakouris Kapteyn

Delivered in open c ourt in Lux em bourg on 13 No vem ber 1990.

J.-G. Giraud

Registrar

G. F. Mancini

President of the Sixth Chamber

I - 4161



CHARTER OF FUNDAMENTAL RIGHTSOF THE EUROPEAN UNION

(2000/C 364/01)

EN18.12.2000 Official Journal of the European Communities C 364/1





PROCLAMACIN SOLEMNE

H JTIDELIG PROKLAMATION

FEIERLICHE PROKLAMATION

—`˝˙ˆ ˚˙ ˜ `˚˙ ˛˙

SOLEMN PROCLAMATION

PROCLAMATION SOLENNELLE

FOR GRA SOLLNTA

PROCLAMAZIONE SOLENNE

PLECHTIGE AFKONDIGING

PROCLAMA˙ˆO SOLENE

JUHLALLINEN JULISTUS

H GTIDLIG PROKLAMATION






El Parlamento Europeo, el Consejo y la Comisin proclaman solemnemente en tanto que Carta de losDerechos Fundamentales de la Unin Europea el texto que figura a continuacin.

Europa-Parlamentet, Rdet og Kommissionen proklamerer hł jtideligt den tekst, der f ł lger nedenfor, som

Den Europ iske Unions charter om grundlggende rettigheder.

Das Europ ische Parlament, der Rat und die Kommission proklamieren feierlich den nachstehenden Textals Charta der Grundrechte der Europischen Union.

¯ıæø ÆœŒ ˚ Ø ºØ, ı ºØ ŒÆØ ¯ Øæ ØÆŒ æ ı Æ ªıæØŒ , ø æ ¨ ºØø˜ØŒÆØøø ¯ıæø ÆœŒ ‚ ø , Œ ı ÆŒ º ı Ł .

The European Parliament, the Council and the Commission solemnly proclaim the text below as theCharter of fundamental rights of the European Union.

Le Parlement europØen, le Conseil et la Commission proclament solennellement en tant que Charte desdroits fondamentaux de l’Union europØenne le texte repris ci-aprŁs.

For gra onn Parlaimint na hEorpa, an Chomhairle agus an Coimisiœn go sollœnta an tØacs th os mar anChairt um Chearta Bunœsacha den Aontas Eorpach.

Il Parlamento europeo, il Consiglio e la Commissione proclamano solennemente quale Carta dei dirittifondamentali dell’Unione europea il testo riportato in appresso.

Het Europees Parlement, de Raad en de Commissie kondigen plechtig als Handvest van de grondrechtenvan de Europese Unie de hierna opgenomen tekst af.

O Parlamento Europeu, o Conselho e a Comissªo proclamam solenemente, enquanto Carta dos DireitosFundamentais da Uniªo Europeia, o texto a seguir transcrito.

Euroopan parlamentti, neuvosto ja komissio juhlallisesti julistavat jljemp n esitetyn tekstin Euroopanunionin perusoikeuskirjaksi.

Europaparlamentet, rdet och kommissionen tillknnager h gtidligt denna text ssom stadga om degrundl ggande r ttigheterna i Europeiska unionen.




Hecho en Niza, el siete de diciembre del aæo dos mil.

Udf rdiget i Nice den syvende december to tusind.

Geschehen zu Nizza am siebten Dezember zweitausend.

‚ªØ ˝ ŒÆØÆ, Ø ˜ Œ æ ı ØºØ .

Done at Nice on the seventh day of December in the year two thousand.

Fait Nice, le sept dØcembre deux mille.

Arna dhØanamh i Nice, an seachtœ lÆ de Nollaig sa bhliain dhÆ mh le.

Fatto a Nizza, add sette dicembre duemila.

Gedaan te Nice, de zevende december tweeduizend.

Feito em Nice, em sete de Dezembro de dois mil.

Tehty Nizzassa seitsemnten p iv n joulukuuta vuonna kaksituhatta.

Som skedde i Nice den sjunde december tjugohundra.

ENC 364/6 Official Journal of the European Communities 18.12.2000



Por el Parlamento EuropeoFor Europa-ParlamentetF r das Europ ische ParlamentˆØÆ ¯ıæø ÆœŒ ˚ Ø ºØ

For the European ParliamentPour le Parlement europØenThar ceann Pharlaimint na hEorpaPer il Parlamento europeoVoor het Europees ParlementPelo Parlamento EuropeuEuroopan parlamentin puolestaF r Europaparlamentet

Por el Consejo de la Unin EuropeaFor R det for Den Europ iske UnionF r den Rat der Europischen UnionˆØÆ ı ºØ ¯ıæø ÆœŒ ‚ øFor the Council of the European UnionPour le Conseil de l’Union europØenneThar ceann Chomhairle an Aontais EorpaighPer il Consiglio dell’Unione europeaVoor de Raad van de Europese UniePelo Conselho da Uniªo EuropeiaEuroopan unionin neuvoston puolestaF r Europeiska unionens rd

Por la Comisin EuropeaFor Europa-kommissionenF r die Europ ische KommissionˆØÆ ¯ıæø ÆœŒ ¯ ØæFor the European CommissionPour la Commission europØenneThar ceann an Choimisiœin EorpaighPer la Commissione europeaVoor de Europese CommissiePela Comissªo EuropeiaEuroopan komission puolestaF r Europeiska kommissionen




PREAMBLE

The peoples of Europe, in creating an ever closer union among them, are resolved to share a peacefulfuture based on common values.

Conscious of its spiritual and moral heritage, the Union is founded on the indivisible, universal values of human dignity, freedom, equality and solidarity; it is based on the principles of democracy and the ruleof law. It places the individual at the heart of its activities, by establishing the citizenship of the Unionand by creating an area of freedom, security and justice.

The Union contributes to the preservation and to the development of these common values while

respecting the diversity of the cultures and traditions of the peoples of Europe as well as thenational identities of the Member States and the organisation of their public authorities at national,regional and local levels; it seeks to promote balanced and sustainable development and ensures freemovement of persons, goods, services and capital, and the freedom of establishment.

To this end, it is necessary to strengthen the protection of fundamental rights in the light of changes insociety, social progress and scientific and technological developments by making those rights morevisible in a Charter.

This Charter reaffirms, with due regard for the powers and tasks of the Community and the Union and

the principle of subsidiarity, the rights as they result, in particular, from the constitutional traditions andinternational obligations common to the Member States, the Treaty on European Union, the Community Treaties, the European Convention for the Protection of Human Rights and Fundamental Freedoms, theSocial Charters adopted by the Community and by the Council of Europe and the case-law of the Courtof Justice of the European Communities and of the European Court of Human Rights.

Enjoyment of these rights entails responsibilities and duties with regard to other persons, to the humancommunity and to future generations.

The Union therefore recognises the rights, freedoms and principles set out hereafter.




CHAPTER I

DIGNITY

Article 1

Human dignity

Human dignity is inviolable. It must be respected and protected.

Article 2

Right to life

1. Everyone has the right to life.2. No one shall be condemned to the death penalty, or executed.

Article 3

Right to the integrity of the person

1. Everyone has the right to respect for his or her physical and mental integrity.

2. In the fields of medicine and biology, the following must be respected in particular:

the free and informed consent of the person concerned, according to the procedures laid down by law,

the prohibition of eugenic practices, in particular those aiming at the selection of persons,

the prohibition on making the human body and its parts as such a source of financial gain,

the prohibition of the reproductive cloning of human beings.

Article 4

Prohibition of torture and inhuman or degrading treatment or punishment

No one shall be subjected to torture or to inhuman or degrading treatment or punishment.

Article 5

Prohibition of slavery and forced labour

1. No one shall be held in slavery or servitude.

2. No one shall be required to perform forced or compulsory labour.

3. Trafficking in human beings is prohibited.




CHAPTER II

FREEDOMS

Article 6

Right to liberty and security

Everyone has the right to liberty and security of person.

Article 7

Respect for private and family life

Everyone has the right to respect for his or her private and family life, home and communications.

Article 8

Protection of personal data

1. Everyone has the right to the protection of personal data concerning him or her.

2. Such data must be processed fairly for specified purposes and on the basis of the consent of theperson concerned or some other legitimate basis laid down by law. Everyone has the right of access todata which has been collected concerning him or her, and the right to have it rectified.

3. Compliance with these rules shall be subject to control by an independent authority.

Article 9

Right to marry and right to found a family

The right to marry and the right to found a family shall be guaranteed in accordance with the nationallaws governing the exercise of these rights.

Article 10

Freedom of thought, conscience and religion

1. Everyone has the right to freedom of thought, conscience and religion. This right includes freedomto change religion or belief and freedom, either alone or in community with others and in public or inprivate, to manifest religion or belief, in worship, teaching, practice and observance.

2. The right to conscientious objection is recognised, in accordance with the national laws governingthe exercise of this right.




Article 11

Freedom of expression and information

1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinionsand to receive and impart information and ideas without interference by public authority and regardlessof frontiers.

2. The freedom and pluralism of the media shall be respected.

Article 12

Freedom of assembly and of association

1. Everyone has the right to freedom of peaceful assembly and to freedom of association at all levels,in particular in political, trade union and civic matters, which implies the right of everyone to form andto join trade unions for the protection of his or her interests.

2. Political parties at Union level contribute to expressing the political will of the citizens of theUnion.

Article 13

Freedom of the arts and sciences

The arts and scientific research shall be free of constraint. Academic freedom shall be respected.

Article 14

Right to education

1. Everyone has the right to education and to have access to vocational and continuing training.

2. This right includes the possibility to receive free compulsory education.

3. The freedom to found educational establishments with due respect for democratic principles andthe right of parents to ensure the education and teaching of their children in conformity with theirreligious, philosophical and pedagogical convictions shall be respected, in accordance with the nationallaws governing the exercise of such freedom and right.

Article 15

Freedom to choose an occupation and right to engage in work

1. Everyone has the right to engage in work and to pursue a freely chosen or accepted occupation.2. Every citizen of the Union has the freedom to seek employment, to work, to exercise the right of establishment and to provide services in any Member State.




3. Nationals of third countries who are authorised to work in the territories of the Member States areentitled to working conditions equivalent to those of citizens of the Union.

Article 16

Freedom to conduct a business

The freedom to conduct a business in accordance with Community law and national laws and practicesis recognised.

Article 17

Right to property

1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquiredpossessions. No one may be deprived of his or her possessions, except in the public interest and inthe cases and under the conditions provided for by law, subject to fair compensation being paid in goodtime for their loss. The use of property may be regulated by law in so far as is necessary for the generalinterest.

2. Intellectual property shall be protected.

Article 18

Right to asylum

The right to asylum shall be guaranteed with due respect for the rules of the Geneva Convention of 28 July 1951 and the Protocol of 31 January 1967 relating to the status of refugees and in accordance withthe Treaty establishing the European Community.

Article 19

Protection in the event of removal, expulsion or extradition

1. Collective expulsions are prohibited.

2. No one may be removed, expelled or extradited to a State where there is a serious risk that he orshe would be subjected to the death penalty, torture or other inhuman or degrading treatment orpunishment.




CHAPTER III

EQUALITY

Article 20

Equality before the law

Everyone is equal before the law.

Article 21

Non-discrimination

1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, geneticfeatures, language, religion or belief, political or any other opinion, membership of a national minority,property, birth, disability, age or sexual orientation shall be prohibited.

2. Within the scope of application of the Treaty establishing the European Community and of theTreaty on European Union, and without prejudice to the special provisions of those Treaties, any discrimination on grounds of nationality shall be prohibited.

Article 22

Cultural, religious and linguistic diversity

The Union shall respect cultural, religious and linguistic diversity.

Article 23

Equality between men and women

Equality between men and women must be ensured in all areas, including employment, work and pay.

The principle of equality shall not prevent the maintenance or adoption of measures providing forspecific advantages in favour of the under-represented sex.

Article 24

The rights of the child

1. Children shall have the right to such protection and care as is necessary for their well-being. They may express their views freely. Such views shall be taken into consideration on matters which concern

them in accordance with their age and maturity.2. In all actions relating to children, whether taken by public authorities or private institutions, thechild’s best interests must be a primary consideration.




3. Every child shall have the right to maintain on a regular basis a personal relationship and directcontact with both his or her parents, unless that is contrary to his or her interests.

Article 25

The rights of the elderly

The Union recognises and respects the rights of the elderly to lead a life of dignity and independenceand to participate in social and cultural life.

Article 26

Integration of persons with disabilities

The Union recognises and respects the right of persons with disabilities to benefit from measuresdesigned to ensure their independence, social and occupational integration and participation in thelife of the community.




CHAPTER IV

SOLIDARITY

Article 27

Workers’ right to information and consultation within the undertaking

Workers or their representatives must, at the appropriate levels, be guaranteed information and consul-tation in good time in the cases and under the conditions provided for by Community law and nationallaws and practices.

Article 28

Right of collective bargaining and action

Workers and employers, or their respective organisations, have, in accordance with Community law andnational laws and practices, the right to negotiate and conclude collective agreements at the appropriatelevels and, in cases of conflicts of interest, to take collective action to defend their interests, includingstrike action.

Article 29

Right of access to placement services

Everyone has the right of access to a free placement service.

Article 30

Protection in the event of unjustified dismissal

Every worker has the right to protection against unjustified dismissal, in accordance with Community law and national laws and practices.

Article 31

Fair and just working conditions

1. Every worker has the right to working conditions which respect his or her health, safety anddignity.2. Every worker has the right to limitation of maximum working hours, to daily and weekly restperiods and to an annual period of paid leave.




Article 32

Prohibition of child labour and protection of young people at work

The employment of children is prohibited. The minimum age of admission to employment may not belower than the minimum school-leaving age, without prejudice to such rules as may be more favourableto young people and except for limited derogations.

Young people admitted to work must have working conditions appropriate to their age and be protectedagainst economic exploitation and any work likely to harm their safety, health or physical, mental, moralor social development or to interfere with their education.

Article 33

Family and professional life

1. The family shall enjoy legal, economic and social protection.

2. To reconcile family and professional life, everyone shall have the right to protection from dismissalfor a reason connected with maternity and the right to paid maternity leave and to parental leavefollowing the birth or adoption of a child.

Article 34

Social security and social assistance

1. The Union recognises and respects the entitlement to social security benefits and social servicesproviding protection in cases such as maternity, illness, industrial accidents, dependency or old age, andin the case of loss of employment, in accordance with the rules laid down by Community law andnational laws and practices.

2. Everyone residing and moving legally within the European Union is entitled to social security benefits and social advantages in accordance with Community law and national laws and practices.

3. In order to combat social exclusion and poverty, the Union recognises and respects the right tosocial and housing assistance so as to ensure a decent existence for all those who lack sufficientresources, in accordance with the rules laid down by Community law and national laws and practices.

Article 35

Health care

Everyone has the right of access to preventive health care and the right to benefit from medicaltreatment under the conditions established by national laws and practices. A high level of humanhealth protection shall be ensured in the definition and implementation of all Union policies andactivities.




Article 36

Access to services of general economic interest

The Union recognises and respects access to services of general economic interest as provided for innational laws and practices, in accordance with the Treaty establishing the European Community, inorder to promote the social and territorial cohesion of the Union.

Article 37

Environmental protection

A high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the Union and ensured in accordance with the principle of sustainabledevelopment.

Article 38

Consumer protection

Union policies shall ensure a high level of consumer protection.




CHAPTER V

CITIZENS’ RIGHTS

Article 39

Right to vote and to stand as a candidate at elections to the European Parliament

1. Every citizen of the Union has the right to vote and to stand as a candidate at elections to theEuropean Parliament in the Member State in which he or she resides, under the same conditions asnationals of that State.

2. Members of the European Parliament shall be elected by direct universal suffrage in a free andsecret ballot.

Article 40

Right to vote and to stand as a candidate at municipal elections

Every citizen of the Union has the right to vote and to stand as a candidate at municipal elections in theMember State in which he or she resides under the same conditions as nationals of that State.

Article 41

Right to good administration

1. Every person has the right to have his or her affairs handled impartially, fairly and within areasonable time by the institutions and bodies of the Union.

2. This right includes:

the right of every person to be heard, before any individual measure which would affect him or her

adversely is taken;

the right of every person to have access to his or her file, while respecting the legitimate interests of confidentiality and of professional and business secrecy;

the obligation of the administration to give reasons for its decisions.

3. Every person has the right to have the Community make good any damage caused by its insti-tutions or by its servants in the performance of their duties, in accordance with the general principlescommon to the laws of the Member States.

4. Every person may write to the institutions of the Union in one of the languages of the Treaties andmust have an answer in the same language.




Article 42

Right of access to documents

Any citizen of the Union, and any natural or legal person residing or having its registered office in aMember State, has a right of access to European Parliament, Council and Commission documents.

Article 43

Ombudsman

Any citizen of the Union and any natural or legal person residing or having its registered office in aMember State has the right to refer to the Ombudsman of the Union cases of maladministration in theactivities of the Community institutions or bodies, with the exception of the Court of Justice and theCourt of First Instance acting in their judicial role.

Article 44

Right to petition

Any citizen of the Union and any natural or legal person residing or having its registered office in aMember State has the right to petition the European Parliament.

Article 45

Freedom of movement and of residence1. Every citizen of the Union has the right to move and reside freely within the territory of theMember States.

2. Freedom of movement and residence may be granted, in accordance with the Treaty establishingthe European Community, to nationals of third countries legally resident in the territory of a MemberState.

Article 46

Diplomatic and consular protection

Every citizen of the Union shall, in the territory of a third country in which the Member State of whichhe or she is a national is not represented, be entitled to protection by the diplomatic or consularauthorities of any Member State, on the same conditions as the nationals of that Member State.




CHAPTER VI

JUSTICE

Article 47

Right to an effective remedy and to a fair trial

Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to aneffective remedy before a tribunal in compliance with the conditions laid down in this Article.

Everyone is entitled to a fair and public hearing within a reasonable time by an independent andimpartial tribunal previously established by law. Everyone shall have the possibility of being advised,defended and represented.

Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessaryto ensure effective access to justice.

Article 48

Presumption of innocence and right of defence

1. Everyone who has been charged shall be presumed innocent until proved guilty according to law.

2. Respect for the rights of the defence of anyone who has been charged shall be guaranteed.

Article 49

Principles of legality and proportionality of criminal offences and penalties

1. No one shall be held guilty of any criminal offence on account of any act or omission which didnot constitute a criminal offence under national law or international law at the time when it wascommitted. Nor shall a heavier penalty be imposed than that which was applicable at the time thecriminal offence was committed. If, subsequent to the commission of a criminal offence, the law

provides for a lighter penalty, that penalty shall be applicable.2. This Article shall not prejudice the trial and punishment of any person for any act or omissionwhich, at the time when it was committed, was criminal according to the general principles recognised by the community of nations.

3. The severity of penalties must not be disproportionate to the criminal offence.

Article 50

Right not to be tried or punished twice in criminal proceedings for the same criminal offencNo one shall be liable to be tried or punished again in criminal proceedings for an offence for which heor she has already been finally acquitted or convicted within the Union in accordance with the law.




CHAPTER VII

GENERAL PROVISIONS

Article 51

Scope

1. The provisions of this Charter are addressed to the institutions and bodies of the Union with dueregard for the principle of subsidiarity and to the Member States only when they are implementingUnion law. They shall therefore respect the rights, observe the principles and promote the applicationthereof in accordance with their respective powers.

2. This Charter does not establish any new power or task for the Community or the Union, ormodify powers and tasks defined by the Treaties.

Article 52

Scope of guaranteed rights

1. Any limitation on the exercise of the rights and freedoms recognised by this Charter must be

provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.

2. Rights recognised by this Charter which are based on the Community Treaties or the Treaty onEuropean Union shall be exercised under the conditions and within the limits defined by those Treaties.

3. In so far as this Charter contains rights which correspond to rights guaranteed by the Convention

for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rightsshall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.

Article 53

Level of protection

Nothing in this Charter shall be interpreted as restricting or adversely affecting human rights andfundamental freedoms as recognised, in their respective fields of application, by Union law and inter-national law and by international agreements to which the Union, the Community or all the MemberStates are party, including the European Convention for the Protection of Human Rights and Funda-mental Freedoms, and by the Member States’ constitutions.




Article 54

Prohibition of abuse of rights

Nothing in this Charter shall be interpreted as implying any right to engage in any activity or to performany act aimed at the destruction of any of the rights and freedoms recognised in this Charter or at theirlimitation to a greater extent than is provided for herein.




Parties dans la procédure au principal Partie requérante: ProRail NV

Parties défenderesses: Xpedys NV, DB Schenker Rail NederlandNV, Nationale Maatschappij der Belgische Spoorwegen NV,

FAG Kugelfischer GmbH

Objet Demande de décision préjudicielle — Hof van Cassatie vanBelgië — Interprétation des art. 1er et 17 du règlement (CE)n o 1206/2001 du Conseil, du 28 mai 2001, relatif à la coopération entre les juridictions des États membres dans le domaine del'obtention des preuves en matière civile ou commerciale (JOL 174, p. 1) et de l'art. 33, par. 1, du règlement (CE)n o 44/2001 du Conseil, du 22 décembre 2000, concernant lacompétence judiciaire, la reconnaissance et l'exécution des décisions en matière civile et commerciale («Bruxelles I») (JO 2001,L 12, p. 1) — Exécution directe de l'acte d'instruction par la

juridiction requérante — Désignation d'un expert et octroi àcelui-ci, par les juridictions d'un État membre, d'une missiondevant se dérouler partiellement sur le territoire des juridictionsen cause et partiellement sur le territoire d'un autre Étatmembre — Application obligatoire ou non du mécanismeprévu à l'art. 17 du règlement n o 1206/2001

Dispositif Les articles 1 er , paragraphe 1, sous b), et 17 du règlement (CE)n o 1206/2001 du Conseil, du 28 mai 2001, relatif à la coopérationentre les juridictions des États membres dans le domaine de l’obtentiondes preuves en matière civile ou commerciale, doivent être interprétés ence sens que la juridiction d’un État membre, qui souhaite qu’un acted’instruction confié à un expert soit effectué sur le territoire d’un autreÉtat membre, n’est pas nécessairement tenue de recourir au moyend’obtention des preuves prévu par ces dispositions afin de pouvoirordonner cet acte d’instruction.

( 1 ) JO C 269 du 10.09.2011

Arrêt de la Cour (Grande chambre) du 26 février 2013(demande de décision préjudicielle du TribunalConstitucional Madrid — Espagne) — procédure pénale

contre Stefano Melloni

(Affaire C-399/11) ( 1 )

(Coopération policière et judiciaire en matière pénale — Mandat d’arrêt européen — Procédures de remise entreÉtats membres — Décisions rendues à l’issue d’un procèsauquel l’intéressé n’a pas comparu en personne — Exécutiond’une peine prononcée par défaut — Possibilité de révision du

jugement)

(2013/C 114/16)

Langue de procédure: l’espagnol

Juridiction de renvoi Tribunal Constitucional Madrid

Parties dans la procédure au principal Procédure pénale contre: Stefano Melloni.

Autre partie: Ministerio Fiscal

Objet Demande de décision préjudicielle — Tribunal ConstitucionMadrid — Interprétation de l'art. 4bis de la décision-cadr2002/584/JAI du Conseil, du 13 juin 2002, relative aumandat d'arrêt européen et aux procédures de remise entreÉtats membres (JO L 190, p. 1), telle que modifiée par décision-cadre 2009/299/JAI du Conseil, du 26 février 2009portant modification des décisions-cadres 2002/584/JAI,2005/214/JAI, 2006/783/JAI, 2008/909/JAI et 2008/947/JAI,

renforçant les droits procéduraux des personnes et favorisanl'application du principe de reconnaissance mutuelle aux décsions rendues en l'absence de la personne concernée lors dprocès (JO L 81, p. 24) et des art. 47, 48 et 53 de la chardes droits fondamentaux de l'Union européenne — Décisionrendues à l'issue d'un procès auquel l'intéressé n'a pas compaen personne — Exécution d'une peine prononcée par défaut —Possibilité de révision du jugement

Dispositif 1) L’article 4 bis, paragraphe 1, de la décision-cadre 2002/58

du Conseil, du 13 juin 2002, relative au mandat d’arrêt euet aux procédures de remise entre États membres, telle que par la décision-cadre 2009/299/JAI du Conseil, du 26 f2009, doit être interprété en ce sens qu’il s’oppose à l’autorité judiciaire d’exécution, dans les hypothèses indcette disposition, subordonne l’exécution d’un mandat d’ar péen délivré aux fins de l’exécution d’une peine à la conla condamnation prononcée par défaut puisse être révisl’État membre d’émission.

2) L’article 4 bis, paragraphe 1, de la décision-cadre 2002/58que modifiée par la décision-cadre 2009/299, est compatib

les exigences découlant des articles 47 et 48, paragraphe charte des droits fondamentaux de l’Union européenne.

3) L’article 53 de la charte des droits fondamentaux de leuropéenne doit être interprété en ce sens qu’il ne permun État membre de subordonner la remise d’une pecondamnée par défaut à la condition que la condamn puisse être révisée dans l’État membre d’émission, afinune atteinte au droit à un procès équitable et aux droitsdéfense garantis par sa constitution.

( 1 ) JO C 290 du 01.10.2011

FR C 114/12 Journal officiel de l’Union européenne 20.4.2013



JUDGMENT OF THE COURT (Grand Chamber)

26 February 2013 (*)

(Charter of Fundamental Rights of the European Union – Field of application – Article 51 –Implementation of European Union law – Punishment of conduct prejudicial to own

resources of the European Union – Article 50 – Ne bis in idem principle – National systeminvolving two separate sets of proceedings, administrative and criminal, to punish the same

wrongful conduct – Compatibility)

In Case C!617/10,

REQUEST for a preliminary ruling under Article 267 TFEU from the Haparanda tingsrätt(Sweden), made by decision of 23 December 2010, received at the Court on 27 December

2010, in the proceedingsÅklagaren

v

Hans Åkerberg Fransson,

THE COURT (Grand Chamber),

composed of V. Skouris, President, K. Lenaerts, Vice-President, A. Tizzano, M. Ile!i",

G. Arestis, J. Malenovsk#, Presidents of Chambers, A. Borg Barthet, J.!C. Bonichot,C. Toader, J.-J. Kasel and M. Safjan (Rapporteur), Judges,

Advocate General: P. Cruz Villalón,

Registrar: C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 24 January 2012,


– Mr Åkerberg Fransson, by J. Sterner, advokat, and U. Bernitz, professor, – the Swedish Government, by A. Falk and S. Johannesson, acting as Agents,

– the Czech Government, by M. Smolek and J. Vlá"il, acting as Agents,

– the Danish Government, by C. Vang, acting as Agent,

– the German Government, by T. Henze, acting as Agent,

– Ireland, by D. O’Hagan, acting as Agent, and M. McDowell SC,

– the Greek Government, by K. Paraskevopoulou and Z. Khatzipavlou, acting as


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Agents,

– the French Government, by N. Rouam, acting as Agent,

– the Netherlands Government, by C. Wissels and J. Langer, acting as Agents,

– the Austrian Government, by C. Pesendorfer, acting as Agent,

– the European Commission, by R. Lyal and J. Enegren, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 12 June 2012,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of thene bis in idemprinciple in European Union law.

2 The request has been made in the context of a dispute between the Åklagaren (PublicProsecutor’s Ofce) and Mr Åkerberg Fransson concerning proceedings brought by thePublic Prosecutor’s Ofce for serious tax offences.

Legal context

European Convention for the Protection of Human Rights and Fundamental Freedoms

3 In Protocol No 7 to the European Convention for the Protection of Human Rights andFundamental Freedoms, which was signed in Strasbourg on 22 November 1984 (‘ProtocolNo 7 to the ECHR’), Article 4, headed ‘Right not to be tried or punished twice’, provides asfollows:

‘1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been nally acquittedor convicted in accordance with the law and penal procedure of that State.

2. The provisions of the preceding paragraph shall not prevent the reopening of the casein accordance with the law and penal procedure of the State concerned, if there is evidenceof new or newly discovered facts, or if there has been a fundamental defect in the previousproceedings, which could affect the outcome of the case.

3. No derogation from this Article shall be made under Article 15 of the [EuropeanConvention for the Protection of Human Rights and Fundamental Freedoms, signed in Romeon 4 November 1950; “the ECHR”].’

European Union law

Charter of Fundamental Rights of the European Union


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4 Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’),which is headed ‘Right not to be tried or punished twice in criminal proceedings for thesame criminal offence’, reads as follows:

‘No one shall be liable to be tried or punished again in criminal proceedings for an offencefor which he or she has already been nally acquitted or convicted within the Union in

accordance with the law.’5 Article 51 denes the Charter’s eld of application in the following terms:

‘1. The provisions of this Charter are addressed to the institutions, bodies, ofces andagencies of the Union with due regard for the principle of subsidiarity and to the MemberStates only when they are implementing Union law. They shall therefore respect the rights,observe the principles and promote the application thereof in accordance with theirrespective powers and respecting the limits of the powers of the Union as conferred on it inthe Treaties.

2. The Charter does not extend the eld of application of Union law beyond the powersof the Union or establish any new power or task for the Union, or modify powers and tasksas dened in the Treaties.’

Sixth Directive 77/388/EEC

6 Article 22 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value addedtax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’), in the versionresulting from Article 28h thereof, states:

‘...4. (a) Every taxable person shall submit a return by a deadline to be determined by

Member States. ...

...

8. Member States may impose other obligations which they deem necessary for thecorrect collection of the tax and for the prevention of evasion …

...’

Swedish law

7 Paragraph 2 of Law 1971:69 on tax offences (skattebrottslagen (1971:69); ‘theskattebrottslagen’) is worded as follows:

‘Any person who intentionally provides false information to the authorities, other thanorally, or fails to submit to the authorities declarations, statements of income or otherrequired information and thereby creates the risk that tax will be withheld from thecommunity or will be wrongly credited or repaid to him or a third party shall be sentenced toa maximum of two years’ imprisonment for tax offences.’


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8 Paragraph 4 of the skattebrottslagen states:

‘If an offence within the meaning of Paragraph 2 is to be regarded as serious, the sentencefor such a tax offence shall be a minimum of six months’ imprisonment and a maximum of six years.

In determining whether the offence is serious, particular regard shall be had to whether itrelates to very large amounts, whether the perpetrator used false documents or misleadingaccounts or whether the conduct formed part of a criminal activity which was committedsystematically or on a large scale or was otherwise particularly grave.’

9 Law 1990:324 on tax assessment (taxeringslagen (1990:324); ‘the taxeringslagen’)provides, in Paragraph 1 of Chapter 5:

‘If, during the procedure, the taxable person has provided false information, other thanorally, for the purposes of the tax assessment, a special charge (tax surcharge) shall belevied. The same shall apply if the taxable person has provided such information in legal

proceedings relating to taxation and the information has not been accepted following asubstantive examination.

Information shall be regarded as false if it is clear that information provided by the taxableperson is inaccurate or that the taxable person has omitted information for the purposes of the tax assessment which he was required to provide. However, information shall not beregarded as false if the information, together with other information provided, constitutes asufcient basis for a correct decision. Information also shall not be regarded as false if theinformation is so unreasonable that it manifestly cannot form the basis for a decision.’

10 Paragraph 4 of Chapter 5 of the taxeringslagen states:

‘If false information has been provided, the tax surcharge shall be 40% of the tax referred toin points 1 to 5 of the rst subparagraph of Paragraph 1 of Chapter 1 which, if the falseinformation had been accepted, would not have been charged to the taxable person or hisspouse. With regard to value added tax, the tax surcharge shall be 20% of the tax whichwould have been wrongly credited to the taxable person.

The tax surcharge shall be calculated at 10% or, with regard to value added tax, 5% wherethe false information was corrected or could have been corrected with the aid of conrmingdocuments which are normally available to the Skatteverket [(Tax Board)] and which were

available to the Skatteverket before the end of November of the tax year.’11 Paragraph 14 of Chapter 5 of the taxeringslagen states:

‘The taxable person shall be exempted wholly or partially from special charges if errors oromissions become evident which are excusable or if it would be otherwise unreasonable tolevy the charge at the full amount. If the taxable person is exempted partially from thecharge, it shall be reduced to a half or a quarter.

...

In assessing whether it would be otherwise unreasonable to levy the charge at the fullamount, particular regard shall be had to whether:


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...

3. errors or omissions have also resulted in the taxable person becoming liable foroffences under the skattebrottslagen … or becoming the subject of forfeiture of proceeds of criminal activity within the meaning of Paragraph 1b of Chapter 36 of the Criminal Code(brottsbalken).’

The dispute in the main proceedings and the questions referred for a preliminaryruling

12 Mr Åkerberg Fransson was summoned to appear before the Haparanda tingsrätt (HaparandaDistrict Court) on 9 June 2009, in particular on charges of serious tax offences. He wasaccused of having provided, in his tax returns for 2004 and 2005, false information whichexposed the national exchequer to a loss of revenue linked to the levying of income tax andvalue added tax (‘VAT’), amounting to SEK 319 143 for 2004, of which SEK 60 000 was inrespect of VAT, and to SEK 307 633 for 2005, of which SEK 87 550 was in respect of VAT.

Mr Åkerberg Fransson was also prosecuted for failing to declare employers’ contributionsfor the accounting periods from October 2004 and October 2005, which exposed the socialsecurity bodies to a loss of revenue amounting to SEK 35 690 and SEK 35 862 respectively.According to the indictment, the offences were to be regarded as serious, rst, because theyrelated to very large amounts and, second, because they formed part of a criminal activitycommitted systematically on a large scale.

13 By decision of 24 May 2007, the Skatteverket had ordered Mr Åkerberg Fransson to pay,for the 2004 tax year, a tax surcharge of SEK 35 542 in respect of income from his economicactivity, of SEK 4 872 in respect of VAT and of SEK 7 138 in respect of employers’contributions. By the same decision it had also imposed for the 2005 tax year a tax surchargeof SEK 54 240 in respect of income from his economic activity, of SEK 3 255 in respect of VAT and of SEK 7 172 in respect of employers’ contributions. Interest was payable on thosepenalties. Proceedings challenging the penalties were not brought before the administrativecourts, the period prescribed for this purpose expiring on 31 December 2010 in relation tothe 2004 tax year and on 31 December 2011 in relation to the 2005 tax year. The decisionimposing the penalties was based on the same acts of providing false information as thoserelied upon by the Public Prosecutor’s Ofce in the criminal proceedings.

14 Before the referring court, the question arises as to whether the charges brought againstMr Åkerberg Fransson must be dismissed on the ground that he has already been punished

for the same acts in other proceedings, as the prohibition on being punished twice laid downby Article 4 of Protocol No 7 to the ECHR and Article 50 of the Charter would be infringed.

15 It is in those circumstances that the Haparanda tingsrätt decided to stay proceedings andrefer the following questions to the Court for a preliminary ruling:

‘1. Under Swedish law there must be clear support in the [ECHR] or the case-law of theEuropean Court of Human Rights for a national court to be able to disapply nationalprovisions which may be suspected of infringing thene bis in idem principle underArticle 4 of Protocol No 7 to the ECHR and may also therefore be suspected of infringing Article 50 of the [Charter]. Is such a condition under national law fordisapplying national provisions compatible with European Union law and in particular


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its general principles, including the primacy and direct effect of European Union law?

2. Does the admissibility of a charge of tax offences come under thene bis in idemprinciple under Article 4 of Protocol No 7 to the ECHR and Article 50 of the Charterwhere a certain nancial penalty (tax surcharge) was previously imposed on thedefendant in administrative proceedings by reason of the same act of providing false

information?3. Is the answer to Question 2 affected by the fact that there must be coordination of these

sanctions in such a way that ordinary courts are able to reduce the penalty in thecriminal proceedings because a tax surcharge has also been imposed on the defendantby reason of the same act of providing false information?

4. Under certain circumstances it may be permitted, within the scope of thene bis in idemprinciple …, to order further sanctions in fresh proceedings in respect of the sameconduct which was examined and led to a decision to impose sanctions on theindividual. If Question 2 is answered in the afrmative, are the conditions under thene

bis in idem principle for the imposition of several sanctions in separate proceedingssatised where in the later proceedings there is an examination of the circumstances of the case which is fresh and independent of the earlier proceedings?

5. The Swedish system of imposing tax surcharges and examining liability for taxoffences in separate proceedings is motivated by a number of reasons of generalinterest … If Question 2 is answered in the afrmative, is a system like the Swedishone compatible with thene bis in idem principle when it would be possible to establisha system which would not come under thene bis in idem principle without it beingnecessary to refrain from either imposing tax surcharges or ruling on liability for tax

offences by, if liability for tax offences is relevant, transferring the decision on theimposition of tax surcharges from the Skatteverket and, where appropriate,administrative courts to ordinary courts in connection with their examination of thecharge of tax offences?’

Jurisdiction of the Court

16 The Swedish, Czech and Danish Governments, Ireland, the Netherlands Government andthe European Commission dispute the admissibility of the questions referred for apreliminary ruling. In their submission, the Court would have jurisdiction to answer them

only if the tax penalties imposed on Mr Åkerberg Fransson and the criminal proceedingsbrought against him that are the subject-matter of the main proceedings arose fromimplementation of European Union law. However, that is not so in the case of either thenational legislation on whose basis the tax penalties were ordered to be paid or the nationallegislation upon which the criminal proceedings are founded. In accordance withArticle 51(1) of the Charter, those penalties and proceedings therefore do not come under thene bis in idem principle secured by Article 50 of the Charter.

17 It is to be recalled in respect of those submissions that the Charter’s eld of application sofar as concerns action of the Member States is dened in Article 51(1) thereof, according towhich the provisions of the Charter are addressed to the Member States only when they areimplementing European Union law.


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18 That article of the Charter thus conrms the Court’s case-law relating to the extent to whichactions of the Member States must comply with the requirements owing from thefundamental rights guaranteed in the legal order of the European Union.

19 The Court’s settled case-law indeed states, in essence, that the fundamental rightsguaranteed in the legal order of the European Union are applicable in all situations governed

by European Union law, but not outside such situations. In this respect the Court has alreadyobserved that it has no power to examine the compatibility with the Charter of nationallegislation lying outside the scope of European Union law. On the other hand, if suchlegislation falls within the scope of European Union law, the Court, when requested to give apreliminary ruling, must provide all the guidance as to interpretation needed in order for thenational court to determine whether that legislation is compatible with the fundamentalrights the observance of which the Court ensures (see inter alia, to this effect, Case C!260/89

ERT [1991] I!2925, paragraph 42; Case C!299/95Kremzow [1997] ECR I!2629, paragraph15; Case C!309/96 Annibaldi [2007] ECR I!7493, paragraph 13; Case C!94/00

Roquette Frères [2002] ECR I!9011, paragraph 25; Case C!349/07Sopropé [2008] ECR

I!10369, paragraph 34; Case C!256/11 Dereci and Others [2011] ECR I!11315, paragraph72; and Case C!27/11Vinkov [2012] ECR, paragraph 58).

20 That denition of the eld of application of the fundamental rights of the European Union isborne out by the explanations relating to Article 51 of the Charter, which, in accordance withthe third subparagraph of Article 6(1) TEU and Article 52(7) of the Charter, have to be takeninto consideration for the purpose of interpreting it (see, to this effect, Case C!279/09 DEB[2010] ECR I!13849, paragraph 32). According to those explanations, ‘the requirement torespect fundamental rights dened in the context of the Union is only binding on theMember States when they act in the scope of Union law’.

21 Since the fundamental rights guaranteed by the Charter must therefore be complied withwhere national legislation falls within the scope of European Union law, situations cannotexist which are covered in that way by European Union law without those fundamentalrights being applicable. The applicability of European Union law entails applicability of thefundamental rights guaranteed by the Charter.

22 Where, on the other hand, a legal situation does not come within the scope of EuropeanUnion law, the Court does not have jurisdiction to rule on it and any provisions of theCharter relied upon cannot, of themselves, form the basis for such jurisdiction (see, to thiseffect, the order in Case C!466/11Currà and Others [2012] ECR, paragraph 26).

23 These considerations correspond to those underlying Article 6(1) TEU, according to whichthe provisions of the Charter are not to extend in any way the competences of the EuropeanUnion as dened in the Treaties. Likewise, the Charter, pursuant to Article 51(2) thereof,does not extend the eld of application of European Union law beyond the powers of theEuropean Union or establish any new power or task for the European Union, or modifypowers and tasks as dened in the Treaties (see Dereci and Others , paragraph 71).

24 In the case in point, it is to be noted at the outset that the tax penalties and criminalproceedings to which Mr Åkerberg Fransson has been or is subject are connected in part to

breaches of his obligations to declare VAT.


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25 In relation to VAT, it follows, rst, from Articles 2, 250(1) and 273 of Council Directive2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006L 347, p. 1), which reproduce inter alia the provisions of Article 2 of the Sixth Directive andof Article 22(4) and (8) of that directive in the version resulting from Article 28h thereof,and second, from Article 4(3) TEU that every Member State is under an obligation to takeall legislative and administrative measures appropriate for ensuring collection of all the VAT

due on its territory and for preventing evasion (see Case C!132/06Commission v Italy[2008] ECR I!5457, paragraphs 37 and 46).

26 Furthermore, Article 325 TFEU obliges the Member States to counter illegal activitiesaffecting the nancial interests of the European Union through effective deterrent measuresand, in particular, obliges them to take the same measures to counter fraud affecting thenancial interests of the European Union as they take to counter fraud affecting their owninterests (see, to this effect, Case C!367/09SGS Belgium and Others [2010] ECR I!10761,paragraphs 40 to 42). Given that the European Union’s own resources include, as providedin Article 2(1) of Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of

the European Communities’ own resources (OJ 2007 L 163, p. 17), revenue from applicationof a uniform rate to the harmonised VAT assessment bases determined according toEuropean Union rules, there is thus a direct link between the collection of VAT revenue incompliance with the European Union law applicable and the availability to the EuropeanUnion budget of the corresponding VAT resources, since any lacuna in the collection of therst potentially causes a reduction in the second (see, to this effect, Case C!539/09Commission v Germany [2011] ECR I!11235, paragraph 72).

27 It follows that tax penalties and criminal proceedings for tax evasion, such as those to whichthe defendant in the main proceedings has been or is subject because the informationconcerning VAT that was provided was false, constitute implementation of Articles 2, 250(1)and 273 of Directive 2006/112 (previously Articles 2 and 22 of the Sixth Directive) and of Article 325 TFEU and, therefore, of European Union law, for the purposes of Article 51(1)of the Charter.

28 The fact that the national legislation upon which those tax penalties and criminalproceedings are founded has not been adopted to transpose Directive 2006/112 cannot callthat conclusion into question, since its application is designed to penalise an infringement of that directive and is therefore intended to implement the obligation imposed on the MemberStates by the Treaty to impose effective penalties for conduct prejudicial to the nancialinterests of the European Union.

29 That said, where a court of a Member State is called upon to review whether fundamentalrights are complied with by a national provision or measure which, in a situation whereaction of the Member States is not entirely determined by European Union law, implementsthe latter for the purposes of Article 51(1) of the Charter, national authorities and courtsremain free to apply national standards of protection of fundamental rights, provided that thelevel of protection provided for by the Charter, as interpreted by the Court, and the primacy,unity and effectiveness of European Union law are not thereby compromised (see, in relationto the latter aspect, Case C!399/11 Melloni [2013] ECR, paragraph 60).

30 For this purpose, where national courts nd it necessary to interpret the Charter they may,and in some cases must, make a reference to the Court of Justice for a preliminary ruling


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under Article 267 TFEU.

31 It follows from the foregoing considerations that the Court has jurisdiction to answer thequestions referred and to provide all the guidance as to interpretation needed in order for thereferring court to determine whether the national legislation is compatible with thene bis inidem principle laid down in Article 50 of the Charter.

Consideration of the questions referred

Questions 2, 3 and 4

32 By these questions, to which it is appropriate to give a joint reply, the Haparanda tingsrättasks the Court, in essence, whether thene bis in idem principle laid down in Article 50 of theCharter should be interpreted as precluding criminal proceedings for tax evasion from beingbrought against a defendant where a tax penalty has already been imposed upon him for thesame acts of providing false information.

33 Application of thene bis in idem principle laid down in Article 50 of the Charter to aprosecution for tax evasion such as that which is the subject of the main proceedingspresupposes that the measures which have already been adopted against the defendant bymeans of a decision that has become nal are of a criminal nature.

34 In this connection, it is to be noted rst of all that Article 50 of the Charter does notpreclude a Member State from imposing, for the same acts of non-compliance withdeclaration obligations in the eld of VAT, a combination of tax penalties and criminalpenalties. In order to ensure that all VAT revenue is collected and, in so doing, that thenancial interests of the European Union are protected, the Member States have freedom tochoose the applicable penalties (see, to this effect, Case 68/88Commission v Greece [1989]ECR 2965, paragraph 24; Case C!213/99de Andrade [2000] ECR I!11083, paragraph 19;and Case C!91/02 Hannl-Hofstetter [2003] ECR I!12077, paragraph 17). These penaltiesmay therefore take the form of administrative penalties, criminal penalties or a combinationof the two. It is only if the tax penalty is criminal in nature for the purposes of Article 50 of the Charter and has become nal that that provision precludes criminal proceedings inrespect of the same acts from being brought against the same person.

35 Next, three criteria are relevant for the purpose of assessing whether tax penalties arecriminal in nature. The rst criterion is the legal classication of the offence under national

law, the second is the very nature of the offence, and the third is the nature and degree of severity of the penalty that the person concerned is liable to incur (Case C!489/10 Bonda[2012] ECR, paragraph 37).

36 It is for the referring court to determine, in the light of those criteria, whether the combiningof tax penalties and criminal penalties that is provided for by national law should beexamined in relation to the national standards as referred to in paragraph 29 of the present judgment, which could lead it, as the case may be, to regard their combination as contrary tothose standards, as long as the remaining penalties are effective, proportionate anddissuasive (see, to this effect, inter aliaCommission v Greece , paragraph 24; Case C!326/88

Hansen [1990] ECR I!2911, paragraph 17; Case C

!167/01 Inspire Art [2003] ECR I

!10155,paragraph 62; Case C!230/01Penycoed [2004] ECR I!937, paragraph 36; and Joined Cases


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C!387/02, C!391/02 and C!403/02 Berlusconi and Others [2005] ECR I!3565 paragraph 65).

37 It follows from the foregoing considerations that the answer to the second, third and fourthquestions is that thene bis in idem principle laid down in Article 50 of the Charter does notpreclude a Member State from imposing successively, for the same acts of non-compliancewith declaration obligations in the eld of VAT, a tax penalty and a criminal penalty in so far

as the rst penalty is not criminal in nature, a matter which is for the national court todetermine.

Question 5

38 By its fth question, the Haparanda tingsrätt asks the Court, in essence, whether nationallegislation which allows the same court to impose tax penalties in combination with criminalpenalties in the event of tax evasion is compatible with thene bis in idem principleguaranteed by Article 50 of the Charter.

39 It should be recalled at the outset that, in proceedings under Article 267 TFEU, it is solelyfor the national court before which the dispute has been brought, and which must assumeresponsibility for the subsequent judicial decision, to determine, in the light of the particularcircumstances of the case, both the need for a preliminary ruling in order to enable it todeliver judgment and the relevance of the questions which it submits to the Court.Consequently, where the questions submitted concern the interpretation of European Unionlaw, the Court is in principle bound to give a ruling (see, inter alia, Joined Cases C!78/08 toC!80/08Paint Graphos and Others [2011] ECR I!7611, paragraph 30 and the case-lawcited).

40 The presumption that questions referred by national courts for a preliminary ruling are

relevant may be rebutted only in exceptional cases, where it is quite obvious that theinterpretation of European Union law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court doesnot have before it the factual or legal material necessary to give a useful answer to thequestions submitted to it (see, to this effect, inter aliaPaint Graphos , paragraph 31 and thecase-law cited).

41 Here, it is apparent from the order for reference that the national legislation to which theHaparanda tingsrätt makes reference is not the legislation applicable to the dispute in themain proceedings and currently does not exist in Swedish law.

42 The fth question must therefore be declared inadmissible, as the function entrusted to theCourt within the framework of Article 267 TFEU is to contribute to the administration of justice in the Member States and not to deliver advisory opinions on general or hypotheticalquestions (see, inter alia,Paint Graphos , paragraph 32 and the case-law cited)

Question 1

43 By its rst question, the Haparanda tingsrätt asks the Court, in essence, whether a national judicial practice is compatible with European Union law if it makes the obligation for anational court to disapply any provision contrary to a fundamental right guaranteed by theECHR and by the Charter conditional upon that infringement being clear from theinstruments concerned or the case-law relating to them.


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44 As regards, rst, the conclusions to be drawn by a national court from a conict betweennational law and the ECHR, it is to be remembered that whilst, as Article 6(3) TEUconrms, fundamental rights recognised by the ECHR constitute general principles of theEuropean Union’s law and whilst Article 52(3) of the Charter requires rights contained in theCharter which correspond to rights guaranteed by the ECHR to be given the same meaningand scope as those laid down by the ECHR, the latter does not constitute, as long as the

European Union has not acceded to it, a legal instrument which has been formallyincorporated into European Union law. Consequently, European Union law does not governthe relations between the ECHR and the legal systems of the Member States, nor does itdetermine the conclusions to be drawn by a national court in the event of conict betweenthe rights guaranteed by that convention and a rule of national law (see, to this effect, CaseC!571/10Kamberaj [2012] ECR, paragraph 62).

45 As regards, next, the conclusions to be drawn by a national court from a conict betweenprovisions of domestic law and rights guaranteed by the Charter, it is settled case-law that anational court which is called upon, within the exercise of its jurisdiction, to applyprovisions of European Union law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conicting provision of nationallegislation, even if adopted subsequently, and it is not necessary for the court to request orawait the prior setting aside of such a provision by legislative or other constitutional means(Case 106/77Simmenthal [1978] ECR 629, paragraphs 21 and 24; Case C!314/08Filipiak [2009] ECR I!11049, paragraph 81; and Joined Cases C!188/10 and C!189/10 Melki and

Abdeli [2010] ECR I!5667, paragraph 43).

46 Any provision of a national legal system and any legislative, administrative or judicialpractice which might impair the effectiveness of European Union law by withholding fromthe national court having jurisdiction to apply such law the power to do everything necessaryat the moment of its application to set aside national legislative provisions which mightprevent European Union rules from having full force and effect are incompatible with thoserequirements, which are the very essence of European Union law ( Melki and Abdeli ,paragraph 44 and the case!law cited).

47 Furthermore, in accordance with Article 267 TFEU, a national court hearing a caseconcerning European Union law the meaning or scope of which is not clear to it may or, incertain circumstances, must refer to the Court questions on the interpretation of the provisionof European Union law at issue (see, to this effect, Case 283/81Cilt and Others [1982]ECR 3415).

48 It follows that European Union law precludes a judicial practice which makes the obligationfor a national court to disapply any provision contrary to a fundamental right guaranteed bythe Charter conditional upon that infringement being clear from the text of the Charter or thecase-law relating to it, since it withholds from the national court the power to assess fully,with, as the case may be, the cooperation of the Court of Justice, whether that provision iscompatible with the Charter.

49 In the light of the foregoing considerations, the answer to the rst question is:

– European Union law does not govern the relations between the ECHR and the legalsystems of the Member States, nor does it determine the conclusions to be drawn by a


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national court in the event of conict between the rights guaranteed by that conventionand a rule of national law;

– European Union law precludes a judicial practice which makes the obligation for anational court to disapply any provision contrary to a fundamental right guaranteed bythe Charter conditional upon that infringement being clear from the text of the Charter

or the case-law relating to it, since it withholds from the national court the power toassess fully, with, as the case may be, the cooperation of the Court of Justice, whetherthat provision is compatible with the Charter.

Costs

50 Since these proceedings are, for the parties to the main proceedings, a step in the actionpending before the referring court, the decision on costs is a matter for that court. Costsincurred in submitting observations to the Court, other than the costs of those parties, are notrecoverable.

On those grounds, the Court (Grand Chamber) hereby rules:

1. The ne bis in idem principle laid down in Article 50 of the Charter of Fundamental Rights of the European Union does not preclude a Member Statefrom imposing successively, for the same acts of non!compliance with declarationobligations in the eld of value added tax, a tax penalty and a criminal penalty inso far as the rst penalty is not criminal in nature, a matter which is for thenational court to determine.

2. European Union law does not govern the relations between the EuropeanConvention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and the legal systems of the Member States, nor does it determine the conclusions to be drawn by a national court in the eventof conict between the rights guaranteed by that convention and a rule of national law.

European Union law precludes a judicial practice which makes the obligation fora national court to disapply any provision contrary to a fundamental rightguaranteed by the Charter of Fundamental Rights of the European Unionconditional upon that infringement being clear from the text of the Charter or thecase-law relating to it, since it withholds from the national court the power toassess fully, with, as the case may be, the cooperation of the Court of Justice of the European Union, whether that provision is compatible with the Charter.

[Signatures]

* Language of the case: Swedish.


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JUDGMENT OF THE COURT (Third Chamber)

10 September 2014 (*)

(Request for a preliminary ruling — Directive 93/13/EEC — Unfair terms — Consumercredit agreement — Article 1(2) — Term reecting a mandatory statutory provision —

Scope of the directive — Articles 3(1), 4, 6(1) and 7(1) — Security for credit in the form of a charge on immovable property –Whether it is possible to enforce the charge by means of a

sale by auction — Judicial review)

In Case C!34/13,

REQUEST for a preliminary ruling under Article 267 TFEU from the Krajsk! súd v Pre"ove(Slovakia), made by decision of 20 December 2012, received at the Court on 23 January

2013, in the proceedingsMonika Ku ! ionová

v

SMART Capital a.s.,

THE COURT (Third Chamber),

composed of M. Ile"i#, President of the Chamber, C.G. Fernlund, A. Ó Caoimh, C. Toader

(Rapporteur) and E. Jara"i$nas, Judges,Advocate General: N. Wahl,

Registrar: M. Aleksejev, Administrator,



– the Slovak Government, by B. Ricziová, acting as Agent,

– the German Government, by T. Henze and J. Kemper, acting as Agents,

– the European Commission, by A. Tokár and M. van Beek, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without anOpinion,

gives the following

Judgment


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1 This request for a preliminary ruling concerns the interpretation of Council Directive93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29), andDirective 2005/29/EC of the European Parliament and of the Council of 11 May 2005concerning unfair business-to-consumer commercial practices in the internal market andamending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the

European Parliament and of the Council (OJ 2005 L 149, p. 22), in the light of Article 38 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and the judgmentin Simmenthal (106/77, EU:C:1978:49).

2 The request has been made in proceedings between Mrs Ku"ionová and SMART Capitala.s. (‘SMART Capital’) concerning the methods of enforcement of a charge provided by wayof guarantee for a mortgage loan agreement and the lawfulness of terms included in thatagreement.

Legal context

EU law

3 Article 7 of the Charter states that ‘[e]veryone has the right to respect for his or her privateand family life, home and communications’.

4 Article 38 of the Charter provides that Union policies are to ensure a high level of consumerprotection.

5 The rst paragraph of Article 47 of the Charter states:

‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated hasthe right to an effective remedy before a tribunal in compliance with the conditions laiddown in this Article.’

6 The twelfth to fourteenth and the twenty-fourth recital in the preamble to Directive 93/13are worded as follows:

‘Whereas, however, as they now stand, national laws allow only partial harmonisation to beenvisaged; whereas, in particular, only contractual terms which have not been individuallynegotiated are covered by this Directive; whereas Member States should have the option,with due regard for the [EC] Treaty, to afford consumers a higher level of protection throughnational provisions that are more stringent than those of this Directive;

Whereas the statutory or regulatory provisions of the Member States which directly orindirectly determine the terms of consumer contracts are presumed not to contain unfairterms; whereas, therefore, it does not appear to be necessary to subject the terms whichreect mandatory statutory or regulatory provisions …; whereas in that respect the wording“mandatory statutory or regulatory provisions” in Article 1(2) also covers rules which,according to the law, shall apply between the contracting parties provided that no otherarrangements have been established;

Whereas Member States must however ensure that unfair terms are not included …


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…

Whereas the courts or administrative authorities of the Member States must have at theirdisposal adequate and effective means of preventing the continued application of unfairterms in consumer contracts.’

7 Article 1 of Directive 93/13 provides:

‘(1) The purpose of this Directive is to approximate the laws, regulations andadministrative provisions of the Member States relating to unfair terms in contractsconcluded between a seller or supplier and a consumer.

(2) The contractual terms which reect mandatory statutory or regulatory provisions …shall not be subject to the provisions of this Directive.’

8 Under Article 4(1) of that directive:

‘Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, takinginto account the nature of the goods or services for which the contract was concluded and byreferring, at the time of conclusion of the contract, to all the circumstances attending theconclusion of the contract and to all the other terms of the contract or of another contract onwhich it is dependent.’

9 Article 6(1) of that directive provides: ‘Member States shall lay down that unfair terms usedin a contract concluded with a consumer by a seller or supplier shall, as provided for undertheir national law, not be binding on the consumer …’.

10 Article 7(1) of that directive provides:

‘Member States shall ensure that, in the interests of consumers and of competitors, adequateand effective means exist to prevent the continued use of unfair terms in contracts concludedwith consumers by sellers or suppliers.’

Slovak law

11 Paragraph 151j(1) of the Civil Code states:

‘Where a debt secured by a charge is not fully settled in due time, the secured creditor maycommence enforcement of the charge. In enforcing the charge, the secured creditor may

obtain settlement of the debt by the means specied in the contract or by sale of the securityat auction pursuant to a specic law, … or he may seek settlement of the debt by the sale of the security pursuant to specic statutory provisions, … unless otherwise provided for bythis law or a specic law.’

12 The referring court states that there is a footnote to that paragraph, inserted after the words‘pursuant to a specic law’, which refers to Law No 527/2002 on voluntary auctionssupplementing Law No 323/1992 of the Slovak National Council on notaries and notarialactivity (the Notarial Code), as amended (‘the Law on Voluntary Sale by Auction’), and afurther footnote, after the words ‘specic statutory provisions’, which refers to the Code of Civil Procedure and to the Rules on Enforcement.


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13 Paragraph 151m of the Civil Code provides:

‘(1) The secured creditor may sell the security by the means specied in the chargeagreement or at auction at the earliest 30 days from the date of the notice to the guarantorand debtor of the commencement of enforcement of the charge, where the debtor and theguarantor are not one and the same person, unless otherwise provided for by a specic law.

...(2) The guarantor and the secured creditor may, after notice of the commencement of enforcement of the charge, agree that the secured creditor is authorised to sell the security bythe means agreed upon in the charge agreement or at auction even before the expiry of theperiod prescribed in subparagraph (1).

(3) A secured creditor who has commenced enforcement of a charge with the aim of obtaining settlement of the debt by the means agreed upon in the charge agreement maychange the means of enforcing the charge at any time during the enforcement and sell thesecurity at auction or require that the debt be settled by the sale of the security pursuant tospecic statutory provisions. The secured creditor is required to inform the guarantor of thechange in the means of enforcement.’

14 Under Article 74(1) of the Code of Civil Procedure, the court may grant interim relief whereit is necessary temporarily to adjudicate on the relations between the parties or where there isa risk of the enforcement of the judgment being undermined. Article 76(1) of that codeprovides that the court may impose interim measures on a party, in particular in order ‘for itto take action, for it to abstain from taking action or for it to allow action to be taken’.

15 In Paragraph 6 thereof, the Law on Voluntary Sale by Auction denes the auctioneer as ‘theperson who organises the auction and meets the conditions laid down in this specic lawauthorising that person to conduct such business’. Paragraph 7(1) of that law denes theperson requesting sale by the auction as the owner of the subject-matter of the sale, thesecured creditor or any other person who is authorised to request that a sale by auction beheld under a specic law.

16 As regards, more specically, the secured creditor, Paragraph 7(2) of the Law on VoluntarySale by Auction states that such a person is required to declare in writing, not only that thesubject-matter of the sale may be sold at auction, but also the amount of the debt in respectof which an application for enforcement of the charge has been made under that law and thatthe debt is genuine and payable.

17 According to Paragraph 16(1) of that law, a sale by auction may be proceeded with only onthe basis of a signed agreement between the person initiating the sale and the auctioneer.

18 Under Paragraph 17 of the Law on Voluntary Sale by Auction, the auctioneer is required toannounce the sale by auction by publishing a notice. If the item put up for auction is anapartment, a house or other building, an undertaking or part of an undertaking, or if thelowest bid is greater than EUR 16 550, the auctioneer is to publish the notice of publicauction at least 30 days before the auction begins and, without undue delay, forward thenotice of public auction to the Ministry for publication in theOfcial Trade Journal . Thenotice of auction is also to be sent to the person initiating the sale by auction, the debtor of the secured creditor and the owner of the property to be auctioned, where the latter is not the


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terms were unfair. The charge agreement, for its part, was annulled in its entirety. Bothparties brought an appeal against that judgment before the Krajsk! súd v Pre"ove (RegionalCourt, Pre"ov).

27 The referring court seeks to establish whether one of the terms of the charge agreement,namely the term relating to extrajudicial enforcement of the charge on immovable property

provided as security by the consumer, is unfair and notes that that term enables the creditorto enforce the charge without any review being carried out by a court.

28 In its assessment, the referring court, however, identied an additional difculty in so far asthe term concerned derives from a statutory provision, namely Paragraph 151j of the CivilCode.

29 Since the contractual terms which the referring court is required to review may be classiedas unfair for the purposes of Directive 93/13 and since one of those terms is of statutoryorigin, that court considers that the outcome of the dispute before it depends on theinterpretation of EU law.

30 In those circumstances, the Krajsk! súd v Pre"ove decided to stay the proceedings and torefer the following questions to the Court for a preliminary ruling:

‘(1) Are [Directive 93/13] and [Directive 2005/29], in the light of Article 38 of [theCharter], to be interpreted as precluding legislation of a Member State, such asParagraph 151j(1) of the Civil Code, in conjunction with other provisions of thelegislation applicable in the present case, which enables a creditor to recover sums onthe basis of unfair contract terms by enforcing a charge against a consumer’simmovable property without any assessment of the contract terms by a court anddespite there being a dispute as to whether the contract term at issue is unfair?

(2) Does the European Union legislation referred to [in question 1] preclude theapplication of a national rule, such as Paragraph 151j(1) of the Civil Code, inconjunction with other provisions of the legislation applicable in the present case,which enables a creditor to recover sums on the basis of unfair contract terms byenforcing a charge against a consumer’s immovable property without any assessmentof the contract terms by a court and despite there being a dispute as to whether thecontract term at issue is unfair?

(3) Must the judgment of the Court of Justice [inSimmenthal , EU:C:1978:49] be

interpreted as precluding, in the interests of meeting the objectives of the directives[referred to in question 1] and in the light of Article 38 of the [Charter], the nationalcourt from applying domestic provisions, such as Paragraph 151j(1) of the Civil Code,in conjunction with other provisions of the legislation applicable in the present case,which enable a creditor to recover sums on the basis of unfair contract terms byenforcing a charge against a consumer’s immovable property without any assessmentof the contract terms by a court and also, despite there being a dispute, to circumventreview by a court of its own motion of the contract terms?

(4) Is Article 4 of [Directive 93/13] to be interpreted as meaning that a term in a contractconcluded by a consumer without representation by a lawyer which enables a creditorto enforce a charge by extra-judicial means and without any review by a court, is a


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circumvention of the important principle of EU law that contract terms are to bereviewed by courts of their own motion and, for that reason, is unfair, even where thewording of such a contract term is based on a national provision?’

Developments since the request for a preliminary ruling was made

31 At the hearing of 5 June 2014, the Slovak Government informed the Court that, as a resultof the adoption of Law No 106/2014 Z.z. of 1 April 2014, applicable to all agreements in theprocess of being enforced as of 1 June 2014, the procedural rules concerning theenforcement of charges have been amended.

32 In particular, Paragraph 5(7) of that law supplemented Paragraph 21(2) of the Law onVoluntary Sale by Auction, so that that provision is now worded as follows:

‘Where the validity of the charge agreement is challenged or the provisions of the presentlaw are infringed, any person who claims that his rights have been adversely affected as a

result of that infringement may request the court to declare the sale void … .’

Consideration of the questions referred

Admissibility of the questions referred

33 The German Government contends, as its primary argument, that the rst two questionsasked by the referring court are inadmissible.

34 First of all, the referring court has failed to provide either the factual or legal material

necessary for the Court to give a useful answer to those questions. First, whether it ispossible to enforce a charge without review by a court does not constitute a question relatingto an unfair commercial practice. Secondly, the referring court makes no specic referenceto the provisions of Directive 2005/29.

35 Next, those questions are hypothetical and the answer to them does not fall within the jurisdiction of the Court. Since the charge has not yet been enforced by SMART Capital, thesituation described by the referring court does not exist.

36 Finally, the main proceedings relate to the alleged nullity of the loan agreement and of thecharge agreement. However, the referring court seeks to obtain, by means of its rst two

questions, an assessment of whether national procedural provisions comply with Directive93/13. Since the latter seeks to approximate the laws of the Member States on unfair terms,it covers only terms stipulated in contracts and not the conditions laid down by national lawfor the enforcement of such a charge.

37 While acknowledging that the request for a preliminary ruling contains certain lacunae, theSlovak Government nevertheless considers that the rst two questions asked by the referringcourt are admissible. As regards the European Commission, it claimed, at the hearing, thatthe conditions for establishing inadmissibility as dened by the Court in the Order inSKP ,C!433/11, EU:C:2012:702, are not satised in the present case and it therefore considers that

those two questions are admissible.


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38 It should be noted in that respect that, according to the Court’s settled case!law, questionson the interpretation of EU law referred by a national court in the factual and legislativecontext which that court is responsible for dening, and the accuracy of which is not amatter for the Court to determine, enjoy a presumption of relevance. The Court may refuseto rule on a question referred for a preliminary ruling by a national court only where it isquite obvious that the interpretation of EU law that is sought bears no relation to the actualfacts of the main action or its purpose, where the problem is hypothetical, or where the Courtdoes not have before it the factual or legal material necessary to give a useful answer to thequestions submitted to it (judgment inPohotovos ! , C!470/12, EU:C:2014:101, paragraph 27and case-law cited).

39 In the rst place, it should be noted that the rst question referred relates, in addition toDirective 93/13, to Directive 2005/29. However, as was correctly pointed out by the GermanGovernment, the referring court merely refers to the latter directive without stating thereason why an interpretation of that directive is necessary for the resolution of the mainproceedings. Moreover, it does not explain to what extent the procedure for enforcing the

charge that is contested by the applicant in the main proceedings may constitute an unfaircommercial practice.

40 As regards the purpose of the present request for a preliminary ruling, it concerns the scopeof Articles 1(2), 3(1), 4, 6(1) and 7(1) of Directive 93/13, provisions under which the EUlegislature, respectively, provided for a derogation from the scope of that directive, denedwhat constitutes an unfair term, established the rule that an unfair term does not bindconsumers and stated that the Member States are to ensure that adequate and effective meansexist to prevent the continued use of unfair terms.

41 Therefore, the questions asked by the referring court will be answered solely in the light of the provisions of Directive 93/13.

42 In the second place, the fact that the enforcement of the charge has not yet been completeddoes not mean that those questions are hypothetical. First, the referring court points out thatSMART Capital has actually taken steps against the consumer with a view to the sale of theproperty subject to the charge. Secondly, even though the enforcement of the charge has notbeen concluded, the questions referred do not so much seek to ascertain whether the sale hasbeen completed as to determine whether the creditor mayde jure proceed with such a saleand whether judicial remedies are available to the debtor to contest the enforcement.

43 To that extent, the questions referred for a preliminary ruling are not hypothetical and theinterpretation requested of the provisions of Directive 93/13 is necessary for the resolutionof the main proceedings.

44 In the light of the foregoing, the Court therefore nds that the request for a preliminaryruling is admissible.

Substance

Questions 1 to 3

45 It should be pointed out that, although the rst question refers only to Article 38 of theCharter, the present request for a preliminary ruling relates to, in essence, and cites, in


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particular, among the relevant elements of EU law, Article 47 of the Charter. In view of thefact that the rst three questions asked by the referring court seek to determine the level of protection afforded consumers and the judicial remedies available to the latter, that articleshould be included amongst the European Union legal instruments which the referring courtseeks to have interpreted by the Court.

46 By its rst three questions, which it is appropriate to examine together, the referring courtasks, in essence, whether, in the light of Articles 38 and 47 of the Charter, Directive 93/13must be interpreted as precluding national legislation, such as that at issue in the mainproceedings, which allows the recovery of a debt that is based on potentially unfair contractterms by the extrajudicial enforcement of a charge on immovable property provided assecurity by the consumer. If that is the case, that court seeks to ascertain whether, inaccordance with the case-law deriving from the judgment inSimmenthal (EU:1978:49),those domestic provisions must be set aside.

47 It should be noted, rst, that Article 38 of the Charter provides that European Union policiesmust ensure a high level of consumer protection. Article 47 of the Charter concerns the rightto an effective judicial remedy. Those mandatory requirements are applicable to theimplementation of Directive 93/13 (see, to that effect, the judgment inPohotovos ! ,EU:C:2014:101, paragraph 52).

48 Secondly, in its case-law, the Court has already held that the system of protection introducedby Directive 93/13 is based on the idea that the consumer is in a weak position vis-à-vis theseller or supplier, as regards both his bargaining power and his level of knowledge. Thisleads to the consumer agreeing to terms drawn up in advance by the seller or supplierwithout being able to inuence the content of those terms (judgments inPohotovos ! ,EU:C:2014:101, paragraph 39 and case-law cited;Kásler and Káslerné Rábai , C!26/13,

EU:C:2014:282 paragraph 39 and the case-law cited; andSánchez Morcillo and AbrilGarcía , C!169/14, EU:C:2014:2099, paragraph 22).

49 With regard to the enforcement of guarantees attached to loan agreements concluded byconsumers, it is clear that Directive 93/13 is silent as to enforcement of charges.

50 However, it is settled case-law that, in the absence of harmonisation of national mechanismsfor enforcement under EU law, it is for the national legal order of each Member State toestablish such rules, in accordance with the principles of procedural autonomy, provided,however, that those rules are not less favourable than those governing similar domesticsituations (principle of equivalence) and that they do not make it excessively difcult orimpossible in practice to exercise the rights conferred by EU law (principle of effectiveness)(see, to that effect, judgments in Aziz, C!415/11, EU:C:2013:164, paragraph 50 and case-lawcited, andPohotovos ! , EU:C:2014:101, paragraph 46).

51 As regards the principle of equivalence, the Court does not have before it any evidencewhich might raise doubts as to the compliance of the legislation at issue in the mainproceedings with that principle.

52 As regards the principle of effectiveness, it should be noted that the Court has already heldthat every case in which the question arises as to whether a national procedural provision

makes the application of EU law impossible or excessively difcult must be analysed byreference to the role of that provision in the procedure, its progress and its special features,


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judgment in LCL Le Crédit Lyonnais , C!565/12, EU:C:2014:190, paragraph 44 and case-lawcited).

60 With regard to the requirement that the penalty should be effective and dissuasive, rst, thewritten observations submitted to the Court by the Slovak Government state that, duringsuch a procedure for the extrajudicial enforcement of a charge, the national court with

jurisdiction may, under Paragraphs 74(1) and 76(1) of the Code of Civil Procedure, adoptany interim measure to prevent such a sale from going ahead.

61 Secondly, as stated in paragraphs 31 and 32 of the present judgment, it appears that LawNo 106/2014 Z.z. of 1 April 2014, which entered into force on 1 June 2014 and is applicableto all charge agreements in the process of being enforced as of that date, amended theprocedural rules applicable to a term such as that at issue in the main proceedings. Inparticular, Paragraph 21(2) of the Law on Voluntary Sale by Auction, in the version in force,allows the court, where the validity of the term providing for the charge is challenged, todeclare the sale void, which, retrospectively, places the consumer in a situation almostidentical to his original situation and does not therefore limit the compensation for the harmcaused to him, where the sale is unlawful, to mere monetary compensation.

62 With regard to the proportionality of the penalty, it is necessary to give particular attentionto the fact that the property at which the procedure for the extrajudicial enforcement of thecharge at issue in the main proceedings is directed is the immovable property forming theconsumer’s family home.

63 The loss of a family home is not only such as to seriously undermine consumer rights (the judgment in Aziz, EU:C:2013:164, paragraph 61), but it also places the family of theconsumer concerned in a particularly vulnerable position (see, to that effect, the Order of the

President of the Court inSánchez Morcillo and Abril García , EU:C:2014:1388,paragraph 11).

64 In that regard, the European Court of Human Rights has held, rst, that the loss of a home isone of the most serious breaches of the right to respect for the home and, secondly, that anyperson who risks being the victim of such a breach should be able to have the proportionalityof such a measure reviewed (see the judgments of the European Court of Human Rights in

McCann v United Kingdom , application No 19009/04, paragraph 50, ECHR 2008, and Rousk v Sweden , application No 27183/04, paragraph 137).

65 Under EU law, the right to accommodation is a fundamental right guaranteed underArticle 7 of the Charter that the referring court must take into consideration whenimplementing Directive 93/13.

66 With regard in particular to the consequences of the eviction of the consumer and his familyfrom the accommodation forming their principal family home, the Court has alreadyemphasised the importance, for the national court, to provide for interim measures by whichunlawful mortgage enforcement proceedings may be suspended or terminated where thegrant of such measures proves necessary in order to ensure the effectiveness of theprotection intended by Directive 93/13 (see, to that effect, the judgment in Aziz,EU:C:2013:164, paragraph 59).

67 In the present case, the fact that it is possible for the competent national court to adopt any


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interim measure, such as that described in paragraph 60 of the present judgment, wouldsuggest that adequate and effective means exist to prevent the continued use of unfair terms,which is a matter for the referring court to determine.

68 It follows from the foregoing considerations that Directive 93/13 must be interpreted as notprecluding national legislation, such as that at issue in the main proceedings, which allows

the recovery of a debt that is based on potentially unfair contractual terms by theextrajudicial enforcement of a charge on immovable property provided as security by theconsumer, in so far as that legislation does not make it excessively difcult or impossible inpractice to protect the rights conferred on consumers by that directive, which is a matter forthe national court to determine.

69 In the light of the answer given to the rst part of the rst three questions, there is no needto answer the second part of those questions, relating to the effect of the case-law devolvingfrom the judgment inSimmenthal (EU:C:1978:49) on national legislation allowingextrajudicial enforcement of a charge.

Question 470 By Question 4, the referring court asks, in essence, whether Article 4 of Directive 93/13

must be interpreted as precluding a contractual term in an agreement concluded by a seller orsupplier with a consumer, even though the wording of that term is based on a statutoryprovision.

71 First of all, it must be noted that the fact that a national court has, formally speaking,worded a question referred for a preliminary ruling with reference to certain provisions of EU law does not preclude the Court from providing to the national court all the elements of interpretation which may be of assistance in adjudicating on the case pending before it,whether or not that court has referred to them in its questions. It is, in this context, for theCourt to extract from all the information provided by the national court, in particular fromthe grounds of the decision referring the questions, the points of EU law which requireinterpretation, regard being had to the subject-matter of the dispute (the judgment inVicoplus and Others , C!307/09 to C!309/09, EU:C:2011:64, paragraph 22 and the case-lawcited).

72 Next, since the referring court refers extensively to the exclusion from the scope of Directive 93/13 of contractual terms which reect domestic statutory provisions, it should benoted that, although reference is not made to Article 1(2) of that directive in the request for apreliminary ruling, the fourth question referred for a preliminary ruling impliedly butnecessarily relates to that provision. Consequently, the present request for a preliminaryruling must be regarded as relating to Article 1(2) of that directive.

73 Finally, it is settled case-law that the Court may, in the context of its jurisdiction underArticle 267 TFEU to interpret EU law, interpret general criteria used by the EU legislature inorder to dene the concept of unfair terms (see, to that effect, the order inPohotovos ! ,C!76/10, EU:C:2010:685, paragraph 60 and case-law cited). However, it is for the nationalcourt to determine, in the light of those criteria, whether a particular contractual term isactually unfair in the circumstances of the case. It follows that the Court must limit itself to

providing the referring court with guidance which the latter must take into account in orderto assess whether the term at issue is unfair (the judgments in Aziz, EU:C:2013:164,


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paragraph 66 and case-law cited;Kásler and Káslerné Rábai , EU:C:2014:282, paragraph 45;and the order inSebestyén , C!342/13, EU:C:2014:1857, paragraph 25).

74 While Article 1(1) of Directive 93/13 denes the scope of that directive, Article 1(2) thereof provides that terms which reect mandatory statutory or regulatory provisions are excluded.

75 In that regard, the Slovak and German governments propose that the Court should answerthat the contractual term at issue in the main proceedings, namely that providing forvoluntary sale by auction, is covered by that exclusion. Conversely, the Commissionconsiders that the effectiveness of the provisions of Directive 93/13 would be undermined if a situation such as that in the main proceedings were covered by such an exclusion.

76 The Court has already had occasion to point out that Article 1(2) of Directive 93/13establishes an exclusion from the scope of that directive which covers terms which reectmandatory statutory or regulatory provisions (see, to that effect, the judgment in RWE Vertrieb , C!92/11, EU:C:2013:180, paragraph 25).

77 As with all derogations, it should be noted, having regard to the purpose of that directive,namely the protection of consumers against unfair terms included in contracts concludedwith consumers by sellers or suppliers, that it is to be strictly construed.

78 In this case, it is apparent from the judgment in RWE Vertrieb , EU:C:2013:180, that thatexclusion requires two conditions to be met. First, the contractual term must reect astatutory or regulatory provision and, secondly, that provision must be mandatory.

79 In that regard, it should be noted that, in order to establish whether a contractual term isexcluded from the scope of Directive 93/13, it is for the national court to determine whetherthat term reects provisions of national law that apply between the parties to the contractindependently of their choice or those that apply by default, that is to say in the absence of other arrangements established by the parties (see, to that effect, judgment in RWE Vertrieb ,EU:C:2013:180, paragraph 26).

80 In the light of the foregoing considerations, the answer to Question 4 is that Article 1(2) of Directive 93/13 must be interpreted as meaning that a contractual term included in a contractconcluded by a seller or supplier with a consumer falls outside the scope of that directiveonly if that contractual term reects the content of a mandatory statutory or regulatoryprovision, which is a matter for the national court to determine.

The temporal effect of this judgment

81 In the event that the Court reaches the conclusion that Directive 93/13 must be interpretedas meaning that the extrajudicial enforcement of a charge such as that at issue in the mainproceedings must be preceded by review by a court, the Slovak Government requests theCourt to limit the temporal effects of any such judgment.

82 In the light of the answer to the rst three questions, it is not necessary to respond to thatrequest by the Slovak Government.

Costs


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83 Costs incurred in submitting observations to the Court, other than the costs of the parties tothe main proceedings, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

1. Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumercontracts must be interpreted as not precluding national legislation, such as thatat issue in the main proceedings, which allows the recovery of a debt that is basedon potentially unfair contractual terms by the extrajudicial enforcement of acharge on immovable property provided as security by the consumer, in so far asthat legislation does not make it excessively difcult or impossible in practice toprotect the rights conferred on consumers by that directive, which is a matter forthe national court to determine.

2. Article 1(2) of Directive 93/13 must be interpreted as meaning that a contractualterm included in a contract concluded by a seller or supplier with a consumer

falls outside the scope of that directive only if that contractual term reects thecontent of a mandatory statutory or regulatory provision, which is a matter forthe national court to determine.

[Signatures]

* Language of the case: Slovakian.


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JUDGMENT OF THE COURT (Seventh Chamber)

12 December 2013 ( *)

(Request for a preliminary ruling – Freedom to provide services – Grants of public money,co-nanced by the European Social Fund, for students enrolled in post !graduate specialist

programmes of study – Regional legislation designed to enhance the level of educationlocally and making the award of grants subject to conditions targeting providers of

post-graduate programmes of study – Condition requiring 10 years’ continuous experience)

In Case C !523/12,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunaleamministrativo regionale per la Puglia (Italy), made by decision of 17 May 2012, received at

the Court on 19 November 2012, in the proceedings

Dirextra Alta Formazione srl

v

Regione Puglia,

THE COURT (Seventh Chamber),

composed of G. Arestis, acting as President of the Seventh Chamber, J. !C. Bonichot

(Rapporteur) and A. Arabadjiev, Judges,

Advocate General: M. Wathelet,

Registrar: A. Calot Escobar,

having regard to the written procedure,


– Regione Puglia, by S.O. Di Lecce and V. Triggiani, avvocati,

– the European Commission, by E. Montaguti and H. Tserepa !Lacombe, acting asAgents,

having decided, after hearing the Advocate General, to proceed to judgment without anOpinion,

gives the following

Judgment

CURIA - Documents http://curia.europa.eu/juris/document/document_print.jsf?doc...

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1 This request for a preliminary ruling concerns the interpretation of Articles 56 TFEU, 101TFEU and 107 TFEU, Articles 9 and 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘theECHR’), Article 2 of the Additional Protocol thereto and Articles 11 and 14 of the Charterof Fundamental Rights of the European Union (‘the Charter’).

2 The request has been made in proceedings between Dirextra Alta Formazione srl(‘Dirextra’), a provider of post-graduate education, and Regione Puglia (the Puglia Region)concerning the decisions taken by the latter making the award of university student grantsco-nanced by the European Social Fund (‘the ESF’) subject to certain conditions relating,inter alia, to the length of time for which the educational body with which applicants forsuch grants plan to enrol has been in existence.

Legal context

European Union (‘EU’) law

3 Recital 22 in the preamble to Council Regulation (EC) No 1083/2006 of 11 July 2006laying down general provisions on the European Regional Development Fund, the EuropeanSocial Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJ 2006L 210, p. 25) states that the activities of the Funds and the operations which they help tonance should be consistent with the other Community policies and comply withCommunity legislation.

4 Under Article 9(5) of Regulation No 1083/2006:

‘Operations nanced by the Funds shall comply with the provisions of the Treaty and of acts

adopted under it.’

Puglia Region legislation

5 Measures for supporting post-graduate studies within the framework of the projections of the ESF Puglia Regional Operational Programme were outlined in Regional Law No 12 of 26 May 2009 laying down provisions relating to student grants intended to help graduatesfrom the Puglia Region to acquire further university qualications (legge regionale No 12 –Misure in tema di borse di studio a sostegno della qualicazione delle laureate e dei laureatipugliesi) ( Bollettino Ufciale della Regione Puglia(Puglia Region Ofcial Gazette) No 78of 29 May 2009, p. 9856) (‘the Regional Law’).

6 Article 2 of the Regional Law lists the various conditions which providers of post !graduateeducation must satisfy in order for those attending the corresponding courses to be eligiblefor the student grants offered.

7 The conditions vary depending on whether they concern (i) Italian or foreign universities,whether public or private, recognised by Italian law, (ii) higher education establishments,whether private or public, which organise approved Masters degree courses, or (iii) otherhigher education establishments satisfying specic conditions relating, inter alia, to theexperience accrued by such establishments in providing post !graduate education.

8 Concerning the nal category, Article 2(3) of the Regional Law is worded as follows:


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‘The Masters degree courses chosen by the individuals concerned must be provided byhigher education establishments, whether private or public, which, in the 10 calendar yearsprior to the issuing of the public notice concerning the award of student grants, havecontinuously and demonstrably provided post-graduate education. Post-graduate educationrefers only to courses exclusively aimed at individuals who have already successfullyfollowed a degree course, the total duration of which was not less than 800 hours. The

educational activities provided must have been carried out in the capacity of implementingbody rather than merely in the capacity of partner. Likewise, the Masters courses chosen bythe individuals concerned must have a total duration of not less than 800 hours, including atleast 500 hours of classroom training, and at least 30 per cent of the total duration of thatcourse must be work experience.’

9 By decision of 2 December 2009, the Director of the Servizio Formazione Professionaledella Regione Puglia (Occupational Training Service, Puglia Region) approved the noticelaunching the procedure for awarding student grants under the Regional Law.

10 That notice stated, in particular, that such grants could be awarded in respect of post-graduate Masters degree courses organised by higher education establishments –whether private or public – which, from 3 December 1999 to 3 December 2009 inclusive,had continuously and demonstrably provided post !graduate education (‘the conditionrelating to 10 years’ experience’).

The dispute in the main proceedings and the question referred for a preliminaryruling

11 Dirextra is a private higher education establishment which has demonstrably provided morethan 8 000 hours of post-graduate education as a result of its activity during the 5 years –rather than the 10 years required by the Regional Law – prior to the issuing of the noticelaunching the procedure for the award of the student grants.

12 In the action brought before the Tribunale amministrativo regionale per la Puglia (RegionalAdministrative Court, Puglia; ‘the referring court’) for the annulment of both the noticelaunching that procedure and the decision of 2 December 2009 approving that notice,Dirextra contested the legality of the condition relating to 10 years’ experience.

13 Dirextra submitted that such a requirement was incompatible with EU law, in particularwith the principles of free competition, proportionality and non !discrimination, and that it

infringed Article 56 et seq. TFEU, Article 101 et seq. TFEU and Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurementprocedures of entities operating in the water, energy, transport and postal services sectors(OJ 2004 L 134, p. 1), Directive 2004/18/EC of the European Parliament and of the Councilof 31 March 2004 on the coordination of procedures for the award of public works contracts,public supply contracts and public service contracts (OJ 2004 L 134, p. 114) and Directive2006/123/EC of the European Parliament and of the Council of 12 December 2006 onservices in the internal market (OJ 2006 L 376, p. 36).

14 While nding that those directives are not applicable in the present case, the referring courtis of the view, in essence, that the restrictions on the freedom to provide services arisingfrom the condition relating to 10 years’ experience indicate unequal treatment which is not


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compatible with the purpose of the ESF’s activities, namely, to enhance the quality of theeducational system as a whole. According to the referring court, making the selection of providers subject to that condition is disproportionate and inappropriate in relation to theactual duration of the courses eligible for funding (at least 800 hours per year), and is evenexcessive in relation to the purpose of the European Union’s activities.

15 The referring court suggests that eligible providers could be selected on the basis of conditions which are less restrictive of competition and more proportionate to the duration of the Masters degree courses to be organised by bodies which can claim a high level of professionalism, without distorting competition or affecting the quality of the teachingprovided while at the same time guaranteeing freedom to teach and pluralism of ideas, asprotected by Articles 9 and 10 ECHR and Articles 11 and 14 of the Charter.

16 In those circumstances, the Tribunale amministrativo regionale per la Puglia decided to staythe proceedings and to refer the following question to the Court of Justice for a preliminaryruling:

‘Is a provision of law – such as Article 2(3) of [the Regional Law] – which regulates in arestrictive manner access to the market for the provision of certain specic services designedto enhance the level of education locally (post-graduate Masters degree courses), makingsuch access conditional upon meeting a single requirement which, in relation to the purposeof the Community measure (enhancement of the quality of education and, accordingly,selection of individuals with suitable qualications) is arbitrarily chosen and expressed (anumber of hours spread over an unnecessarily long period) and not differentiated accordingto the actual duration of the specic service, compatible with Article 56 [TFEU] et seq. andArticle 101 [TFEU] et seq. … and Article 107 [TFEU] et seq. … and with the principles of competition, proportionality, non !discrimination and equal treatment which may be inferred

from those rules, and with Articles 9 and 10 [ECHR], Article 2 of the Additional Protocolthereto and Articles 11 and 14 of [the Charter]?’

Consideration of the question referred

Preliminary observations

17 It should be borne in mind that the Court of Justice does not have jurisdiction to rule, inpreliminary ruling proceedings, on the compatibility of provisions of national law with rulesof EU law. However, it does have jurisdiction to provide the referring court with all the

guidance as to the interpretation of EU law necessary to enable that court to make its ownruling on whether or not such provisions are compatible with EU law for the purposes of resolving the dispute before it (see, to that effect, Case C !42/07 Liga Portuguesa de FutebolProssional and Bwin International [2009] ECR I !7633, paragraph 37).

18 By asking whether a condition which results in certain higher education establishmentsbeing unable to offer their services to applicants for a regional student grant co-nanced bythe ESF is excessive in the light of EU law, the referring court is asking the Court of Justice,in essence, whether the requirements of the freedom to provide services enshrined in Article56 TFEU preclude a condition of that kind. As a result, its arguments relating to the

principles of proportionality and non !discrimination must be regarded as merging with thoserelating to those requirements and there is, accordingly, no need to address them separately.


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19 In addition, the reasons given in the order for reference for the references made in thequestion to Article 101 TFEU et seq. (relating to competition), Article 107 TFEU et seq.(relating to State aid), and Articles 11 and 14 of the Charter are not sufcient to enable theCourt to assess the relevance of those provisions or, consequently, to give a ruling on thequestion referred in so far as it concerns those provisions.

20 Lastly, it should be borne in mind that EU law does not govern the relations between theECHR and the legal systems of the Member States; nor does it determine the conclusions tobe drawn by a national court in the event of conict between the rights guaranteed by thatconvention and a rule of national law (see, to that effect, Case C !571/10 Kamberaj [2012]ECR, paragraph 62, and Case C !617/10 Åkerberg Fransson [2013] ECR, paragraph 44).Accordingly, there is no need for the Court to give a ruling on the question referred by theTribunale amministrativo regionale per la Puglia in so far as that question concerns theECHR and the Additional Protocol thereto.

Freedom to provide services

21 It is settled case-law that the freedom to provide services under Article 56 TFEU requiresnot only the elimination of all discrimination on grounds of nationality against providers of services established in other Member States, but also the abolition of any restriction – evenif it applies without distinction to national providers of services and to those from otherMember States – which is liable to prohibit, impede or render less attractive the activities of a provider of services established in another Member State where he lawfully providessimilar services (see, to that effect, Case C !265/12 Citroën Belux [2013] ECR, paragraph 35and the case-law cited).

22 In the present case, it is conceivable that educational bodies established in Member States

other than the Italian Republic may be deprived – solely on the ground that they do notsatisfy the condition relating to 10 years’ experience imposed by the Regional Law – of theopportunity to supply their services to students who are eligible for the regional study grant.

23 Furthermore, by making the award of that grant conditional upon the educational body withwhich the student plans to enrol demonstrating 10 years’ continuous experience, a provisionsuch as that at issue in the main proceedings may deter that student from enrolling in bodieswhich do not satisfy that condition and may thus render less attractive the activities of suchbodies.

24 Such a restriction on the freedom to provide services is warranted only if it pursues alegitimate objective compatible with the Treaty and is justied by overriding reasons in thepublic interest; if that is the case, it must be suitable for securing the attainment of theobjective which it pursues and must not go beyond what is necessary in order to achieve it(see, inter alia, Citroën Belux, paragraph 37 and the case-law cited).

25 In the present case, the documents placed before the Court indicate that the objectivepursued by the regional legislation at issue is that of ensuring that the post-graduateeducation to which access for young, unemployed graduates is made easier through theaward of a study grant is of a high standard, in order to facilitate the access of such studentsto the labour market. It is indisputable that making the nancing of post !graduate education

subject to a condition which is intended to guarantee the quality of that education is based onan overriding reason in the public interest. The aim of ensuring high standards of university


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establishments with which students applying for a regional study grant co-nanced bythe European Social Fund plan to enrol to demonstrate 10 years’ experience wheresuch establishments are neither universities recognised by that national law norestablishments organising approved Masters degree courses.

[Signatures]

* Language of the case: Italian.


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JUDGMENT OF THE COURT (Fifth Chamber)

22 May 2014 ( *)

(Request for a preliminary ruling — Transport — Directive 2006/126/EC — Point 6.4 of Annex III — Validity — Charter of Fundamental Rights of the European Union —

Articles 20, 21(1) and 26 — United Nations Convention on the Rights of Persons withDisabilities — Driving licences — Physical and mental tness to drive a motor vehicle —

Minimum standards — Visual acuity — Equal treatment — No possibility of derogation —Proportionality)

In Case C !356/12,

REQUEST for a preliminary ruling under Article 267 TFEU from the Bayerischer

Verwaltungsgerichtshof (Germany), made by decision of 5 July 2012, received at the Courton 27 July 2012, in the proceedings

Wolfgang Glatzel

v

Freistaat Bayern,

THE COURT (Fifth Chamber),

composed of T. von Danwitz, President of the Chamber, E. Juhász, A. Rosas (Rapporteur),D. ! váby and C. Vajda, Judges,

Advocate General: Y. Bot,

Registrar: M. Aleksejev, Administrator,



– Mr Glatzel, by E. Giebler, Rechtsanwalt,

– Freistaat Bayern, by M. Niese, acting as Agent,

– the German Government, by T. Henze and K. Petersen, acting as Agents,

– the European Parliament, by A. Troupiotis and P. Schonard, acting as Agents,

– the Council of the European Union, by E. Karlsson, R. Wiemann and Z. Kup "ová,acting as Agents,

– the European Commission, by G. Braun and J. Hottiaux, acting as Agents,


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after hearing the Opinion of the Advocate General at the sitting on 18 July 2013,

gives the following

Judgment

1 This request for a preliminary ruling concerns the compatibility of point 6.4 of Annex III toDirective 2006/126/EC of the European Parliament and of the Council of 20 December 2006on driving licences (OJ 2006 L 403, p. 18 and corrigendum OJ 2009 L 19, p. 67), asamended by Commission Directive 2009/113/EC of 25 August 2009 (OJ 2009 L 223,‘Directive 2006/126’), with Articles 20, 21(1) and 26 of the Charter of Fundamental Rightsof the European Union (‘the Charter’), concerning the minimum standards relating to thephysical tness to drive a motor vehicle as regards visual acuity.

2 The request has been made in proceedings between Mr Glatzel and Freistaat Bayern

concerning the decision by which Mr Glatzel was refused a driving licence for vehicles incategories C1 and C1E, as dened by Directive 2006/126, on the ground that the visualacuity in his worse eye does not reach the minimum level required in point 6.4 of Annex IIIto that directive.

Legal context

International law

3 The United Nations Convention on the Rights of Persons with Disabilities, which was

approved on behalf of the European Community by Council Decision 2010/48/EC of 26 November 2009 (OJ 2010 L 23, p. 35) (‘the UN Convention on Disabilities’), states inrecital (e) in the preamble thereto:

‘The States Parties to the present Convention,

…

(e) Recognising that disability is an evolving concept and that disability results from theinteraction between persons with impairments and attitudinal and environmentalbarriers that hinders their full and effective participation in society on an equal basis

with others.’

4 Under Article 1 of that convention, entitled ‘Purpose’:

‘The purpose of the present Convention is to promote, protect and ensure the full and equalenjoyment of all human rights and fundamental freedoms by all persons with disabilities,and to promote respect for their inherent dignity.

Persons with disabilities include those who have long-term physical, mental, intellectual orsensory impairments which in interaction with various barriers may hinder their full andeffective participation in society on an equal basis with others.’

5 Article 2 of that convention, entitled ‘Denitions’, provides:


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‘For the purposes of this convention:

…

“Discrimination on the basis of disability” means any distinction, exclusion or restriction onthe basis of disability which has the purpose or effect of impairing or nullifying therecognition, enjoyment or exercise, on an equal basis with others, of all human rights andfundamental freedoms in the political, economic, social, cultural, civil or any other eld. Itincludes all forms of discrimination, including denial of reasonable accommodation;

…’

6 Article 4 of the UN Convention on Disabilities, entitled ‘General obligations’, states:

‘1. States Parties undertake to ensure and promote the full realisation of all human rightsand fundamental freedoms for all persons with disabilities without discrimination of anykind on the basis of disability. To this end, States Parties undertake:

(a) To adopt all appropriate legislative, administrative and other measures for theimplementation of the rights recognised in the present Convention;

(b) To take all appropriate measures, including legislation, to modify or abolish existinglaws, regulations, customs and practices that constitute discrimination against personswith disabilities;

(c) To take into account the protection and promotion of the human rights of persons withdisabilities in all policies and programmes;

(d) To refrain from engaging in any act or practice that is inconsistent with the presentConvention and to ensure that public authorities and institutions act in conformity withthe present Convention;

(e) To take all appropriate measures to eliminate discrimination on the basis of disabilityby any person, organisation or private enterprise;

…’

7 Under Article 5 of that convention, entitled ‘Equality and non-discrimination’:

‘1. States Parties recognise that all persons are equal before and under the law and areentitled without any discrimination to the equal protection and equal benet of the law.

2. States Parties shall prohibit all discrimination on the basis of disability and guaranteeto persons with disabilities equal and effective legal protection against discrimination on allgrounds.

3. In order to promote equality and eliminate discrimination, States Parties shall take allappropriate steps to ensure that reasonable accommodation is provided.

4. Specic measures which are necessary to accelerate or achieve de facto equality of

persons with disabilities shall not be considered discrimination under the terms of thepresent convention.’


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8 Article 27(1)(a) of that convention, entitled ‘Work and employment’, provides:

‘States Parties recognise the right of persons with disabilities to work, on an equal basis withothers; this includes the right to the opportunity to gain a living by work freely chosen oraccepted in a labour market and work environment that is open, inclusive and accessible topersons with disabilities. States Parties shall safeguard and promote the realisation of the

right to work, including for those who acquire a disability during the course of employment,by taking appropriate steps, including through legislation, to, inter alia:

(a) prohibit discrimination on the basis of disability with regard to all matters concerningall forms of employment, including conditions of recruitment, hiring and employment,continuance of employment, career advancement and safe and healthy workingconditions.’

European Union law

9 According to recital 8 in the preamble to Directive 2006/126:

‘On road safety grounds, the minimum requirements for the issue of a driving licence shouldbe laid down. Standards for driving tests and licensing need to be harmonised. To this endthe knowledge, skills and behaviour connected with driving motor vehicles should bedened, the driving test should be based on these concepts and the minimum standards of physical and mental tness for driving such vehicles should be redened.’

10 Recital 14 in the preamble to that directive states:

‘Specic provisions should be adopted to make it easier for physically disabled persons todrive vehicles.’

11 Recital 19 in the preamble to the directive states:

‘The Commission should be allowed to undertake the adaptation of Annexes I to VI toscientic and technical progress.’

12 Article 4 of Directive 2006/126, entitled ‘Categories, denitions and minimum ages’,provides:

‘1. The driving licence provided for in Article 1 shall authorise the driving of power-driven vehicles in the categories dened hereafter. …

…

4. motor vehicles:

…

(d) Category C1:

motor vehicles other than those in categories D1 or D, the maximum authorised mass of which exceeds 3 500 kg, but does not exceed 7 500 kg, and which are designed and

constructed for the carriage of no more than eight passengers in addition to the driver;motor vehicles in this category may be combined with a trailer having a maximum


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authorised mass not exceeding 750 kg;

(e) Category C1E:

– without prejudice to the provisions of type-approval rules for the vehiclesconcerned, combinations of vehicles where the tractor vehicle is in category C1and its trailer or semi-trailer has a maximum authorised mass of over 750 kgprovided that the authorised mass of the combination does not exceed 12 000 kg,

– without prejudice to the provisions of type-approval rules for the vehiclesconcerned, combinations of vehicles where the tractor vehicle is in category Band its trailer or semi-trailer has an authorised mass of over 3 500 kg, providedthat the authorised mass of the combination does not exceed 12 000 kg,

– the minimum age for categories C1 and C1E is xed at the age of 18 years,without prejudice to the provisions for the driving of such vehicles in Directive2003/59/EC of the European Parliament and of the Council of 15 July 2003 on

the initial qualication and periodic training of drivers of certain road vehiclesfor the carriage of goods or passengers [amending Council Regulation (EEC)No 3820/85 and Council Directive 91/439/EEC and repealing Council Directive76/914/EEC (OJ 2003 L 226, p. 4)];

…’

13 Under Article 7 of that directive, entitled ‘Issue, validity and renewal’:

‘1. Driving licences shall be issued only to those applicants:

(a) who have passed a test of skills and behaviour and a theoretical test and who meetmedical standards, in accordance with the provisions of Annexes II and III;

…

3. The renewal of driving licences when their administrative validity expires shall besubject to:

(a) continuing compliance with the minimum standards of physical and mental tness fordriving set out in Annex III for driving licences in categories C, CE, C1, C1E, D, DE,D1, D1E; …

…’

14 Article 8 of that directive, entitled ‘Adaptation to scientic and technical progress’,provides:

‘The amendments necessary to adapt Annexes I to VI to scientic and technical progressshall be adopted in accordance with the procedure referred to in Article 9(2).’

15 Under Article 9 of Directive 2006/126, entitled ‘Committee’:

‘1. The Commission shall be assisted by the committee on driving licences.


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2. Where reference is made to this paragraph, Article 5a(1) to (4) and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.’

16 Annex III to Directive 2006/126 concerns the minimum standards of physical and mentaltness for driving a power-driven vehicle, including the requirements covering eyesight. Forthe purposes of that annex, drivers are classied in two groups, namely group 1, comprising

drivers of vehicles in categories A, A1, A2, AM, B, B1, and group 2, comprising drivers of vehicles in categories C, CE, C1, CIE, D, DE, D1 and D1E.

17 As regards medical examinations for eyesight, Annex III to directive 2006/126 provides asfollows :

‘6. All applicants for a driving licence shall undergo an appropriate investigation toensure that they have adequate visual acuity for driving power-driven vehicles. Wherethere is reason to doubt that the applicant’s vision is adequate, he/she shall beexamined by a competent medical authority. At this examination attention shall bepaid, in particular, to the following: visual acuity, eld of vision, twilight vision, glare

and contrast sensitivity, diplopia and other visual functions that can compromise safedriving.

For group 1 drivers, licensing may be considered in “exceptional cases” where the visualeld standard or visual acuity standard cannot be met; in such cases the driver shouldundergo examination by a competent medical authority to demonstrate that there is noother impairment of visual function, including glare, contrast sensitivity and twilightvision. The driver or applicant should also be subject to a positive practical testconducted by a competent authority.

Group 1:

6.1 Applicants for a driving licence or for the renewal of such a licence shall have abinocular visual acuity, with corrective lenses if necessary, of at least 0,5 when usingboth eyes together.

Moreover, the horizontal visual eld should be at least 120 degrees, the extensionshould be at least 50 degrees left and right and 20 degrees up and down. No defectsshould be present within a radius of the central 20 degrees.

When a progressive eye disease is detected or declared, driving licences may be issued

or renewed subject to the applicant undergoing regular examination by a competentmedical authority

6.2 Applicants for a driving licence, or for the renewal of such a licence, who have totalfunctional loss of vision in one eye or who use only one eye (e.g. in the case of diplopia) must have a visual acuity of at least 0,5, with corrective lenses if necessary.The competent medical authority must certify that this condition of monocular visionhas existed for a sufciently long time to allow adaptation and that the eld of visionin this eye meets the requirement laid down in paragraph 6.1.

6.4 After any recently developed diplopia or after the loss of vision in one eye, there

should be an appropriate adaptation period (for example, six months), during whichdriving is not allowed. After this period, driving is only allowed following a


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favourable opinion from vision and driving experts.

Group 2:

6.4 Applicants for a driving licence or for the renewal of such a licence shall have avisual acuity, with corrective lenses if necessary, of at least 0,8 in the better eye and atleast 0,1 in the worse eye. If corrective lenses are used to attain the values of 0,8 and0,1, the minimum acuity (0,8 and 0,1) must be achieved either by correction by meansof glasses with a power not exceeding plus eight dioptres, or with the aid of contactlenses. The correction must be well tolerated.

Moreover, the horizontal visual eld with both eyes should be at least 160 degrees, theextension should be at least 70 degrees left and right and 30 degrees up and down. Nodefects should be present within a radius of the central 30 degrees.

Driving licences shall not be issued to or renewed for applicants or drivers suffering fromimpaired contrast sensitivity or from diplopia.

After a substantial loss of vision in one eye, there should be an appropriate adaptation period(for example six months) during which the subject is not allowed to drive. After thisperiod, driving is only allowed after a favourable opinion from vision and drivingexperts.’

18 According to point 1.3 of Annex III to Directive 2006/126, the Member States may providefor the provisions set out in that Annex for Group 2 drivers to apply to drivers of Category Bvehicles using their driving licence for professional purposes (taxis, ambulances, etc.).

19 Furthermore, under point 5 of that annex, as regards group 2, the standards set by Member

States for the issue or any subsequent renewal of driving licences may be stricter than thoseset out in that annex.

German law

20 The rst sentence of Paragraph 2(2) of the German Road Trafc Law(Straßenverkehrsgesetz), in the version published on 5 March 2003 (BGBl. 2003 I, p. 310,corrigendum p. 919), as amended most recently by Paragraph 2(118) of the Law of 22 December 2011 (BGBl. 2011 I, p. 3044, ‘the StVG’), is worded as follows:

‘A driving licence must be issued for the category concerned where the applicant

…

3. is t to drive motor vehicles,

…’

21 The rst sentence of Paragraph 2(4) of the STVG denes ‘tness’ as follows:

‘Any person who satises the physical and mental requirements for driving power-drivenvehicles who has not committed any serious or repeated offences against the road trafcprovisions or the provisions of criminal law is to be deemed t to drive power-driven


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vehicles.’

22 The specic requirements which must be satised in order for a person to be deemed t todrive power-driven vehicles are laid down in the Regulation on the authorisation of personsto drive on the highway (the Regulation on driving licences) (Verordnung über dieZulassung von Personen zum Straßenverkehr (Fahrerlaubnis-Verordnung) of 13 December

2010 (BGBl. 2010 I, p. 1980), as amended most recently by the Regulation of 26 June 2012(BGBl. I, p. 1394).

23 As regards vision, Paragraph 12(1) of that regulation provides:

‘For the purposes of driving power-driven vehicles the applicant’s vision must satisfy therequirements laid down in Annex 6.’

24 Point 2.2.1 of Annex 6 to that regulation provides :

‘Central daytime visual acuity:

Any sight defect must be corrected, provided that such correction is possible and welltolerated, so as to comply with the following minimum values of visual acuity: acuity of thebetter eye or binocular visual acuity of 0,8; acuity in the worse eye of 0,5,

…

In certain special cases, taking into account driving experience and the use of the vehicle, thevisual acuity of the worse eye may be less than 0,5 for categories C, CE, C1 and C1E,provided that it is no less than 0,1. An ophthalmological examination is necessary in suchcases.’

The facts of the dispute and the question referred for a preliminary ruling

25 Mr Glatzel, who was born in 1959, lost his driving licence, by a judgment delivered in April2010, on the ground that he had driven under the inuence of alcohol.

26 By an administrative decision dating from November 2010, the Landratsamt Schwandorf partially upheld Mr Glatzel’s application for a new driving licence authorising him to drivemotor vehicles in categories A, A1 and BE, as dened in Directive 2006/126, and those incertain national categories granting the right to drive bicycles with a backup engine, light

motorcycles, light motor vehicles with a maximum design speed of 45 km/h and tractors forbuilding sites or agricultural purposes with a maximum design speed of 25 km/h and 32km/h respectively.

27 However, by the same decision, Mr Glatzel’s application for a new driving licence forcategories C1 and C1E, in particular, heavy goods vehicles, was refused. The LandsratsamtSchwandorf justied the refusal on the ground that an ophthalmological examination hadrevealed that Mr Glatzel suffered from unilateral amblyopia, involving a substantialfunctional loss of vision in one eye. Although his central visual acuity in his left eye is 1,0and therefore he has full visual acuity, and his binocular visual acuity is also 1,0, during theexamination, Mr Glatzel was able to detect only hand movements with his right eye.Consequently, the visual acuity in Mr Glatzel’s right eye does not satisfy the requirements


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laid down by German law for the issue of a driving licence for vehicles in the lattercategories.

28 Following an unsuccessful objection against that decision, Mr Glatzel brought an actionbefore the Verwaltungsgericht Regensburg (Administrative Court, Regensburg). Since thatcourt dismissed his action, Mr Glatzel brought an appeal against that judgment before the

referring court, the Bayerischer Verwaltungsgerichtshof.

29 The Bayerischer Verwaltungsgerichtshof ordered measures of inquiry and, in particular,requested an expert report from an ophthalmological service in order to establish the currentstate of Mr Glatzel’s eyesight, and whether and, to what extent, he is able to compensate forany existing deciencies, in this case in relation to his spatial vision, and whether thoseabilities to compensate exist independently of his will. Furthermore, by means of anotherexpert report, the referring court seeks to establish, from a scientic point of view, there areproper grounds for refusing to issue a driving licence for categories C1 and C1E to personswith monocular vision for anatomical or functional reasons, even where it has beenestablished that those persons are able to compensate sufciently for any impairments intheir vision. That court also seeks to establish which requirements must, where appropriate,be satised in order to ensure that the driving of vehicles in those categories by such personsposes no additional threat to road safety as compared with the driving of persons whosevision is in no way impaired.

30 In addition, at the hearing before the referring court, the experts expressed their view as tothe likelihood of any loss of vision in one eye where the person concerned is driving avehicle in category C1 and C1E, and whether such a loss of vision may occur so suddenlythat the driver needs a residual visual acuity of 0,1, which he has in the other eye, in order tostop the vehicle on the side of the road.

31 On the basis of the information thus obtained, the Bayerischer Verwaltungsgerichtshof takesthe view that Mr Glatzel’s appeal should be upheld, that is to say the administrativedecisions and the judgment given by the Verwaltungsgericht Regensburg should be set asideand that he should be issued with a driving licence for vehicles in categories C1 and C1E.That court observes that there is no ground on which to prohibit persons who have a visualacuity of less than 0,1 in one eye from driving a motor vehicle where, rst, they havebinocular vision, second, their eld of binocular vision satises the requirements laid downin point 6.4 of Annex III to Directive 2006/126 and, third, they have learned fully tocompensate for their lack of spatial vision.

32 With regard to the last mentioned point, the referring court states that a person withdefective spatial vision adapts to that deciency, where it appears during his life, within sixmonths at the latest. Such adaptation, which, moreover, does not depend on the voluntarypractice of certain behaviour by the person concerned, happens a fortiori where he suffersfrom a substantial visual impairment from birth, as in Mr Glatzel’s case. Thus, therequirement laid down in point 6.4 of Annex III to Directive 2006/126, according to whichgroup 2 drivers must have visual acuity of at least 0,1, is not based on the idea of addressingthe lack of spatial vision of the persons concerned but to enable the driver of a motor vehiclein one of those categories to react to a sudden loss of vision in the better eye during a

journey and to stop the vehicle on the side of the road using his residual vision.

33 The referring court states that the requirement of such residual visual acuity for the worse


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eye is objectively justied only with regard to persons who do not have binocular vision orwhose eld of binocular vision does not satisfy the requirements of point 6.4 of Annex III toDirective 2006/126. However, a person such as Mr Glatzel, who has a normal eld of visionand whose visual impairments affect, in particular, his central visual acuity, would becapable of seeing objects appearing in his eld of peripheral vision in essentially the sameway as a person with normal vision and, would, therefore, be able to stop the power-driven

vehicle he was driving even by using only his residual vision. The referring court adds that itis extremely rare that drivers of heavy goods vehicles lose the vision in one eye so suddenlythat they must rely exclusively on their residual vision in the other eye to stop the vehicle.

34 The Bayerischer Veraltungsgerichtshof takes the view that the requirement laid down inpoint 6.4 of Annex III to Directive 2006/126 constitutes an interference with thefundamental rights guaranteed by Articles 20, 21(1) and 26 of the Charter, which concernequality before the law, non-discrimination on grounds of disability and the integration of persons with disabilities.

35 In particular, the fact that it is impossible for persons such as Mr Glatzel to have access toprofessional activities, the exercise of which in law or in practice requires authorisation todrive vehicles in categories C1 and C1E, constitutes discrimination on grounds of thedisability of the person concerned. Furthermore, the differences between the requirementslaid down by Annex III to Directive 2006/126 relating to the vision of applicants for theissue or renewal of driving licences according to whether they fall within group 1 or group 2,constitute an infringement of equal treatment. In any event, the referring court explains thatthe requirement of minimum visual acuity of 0,1 cannot be justied in certain situations andthat an alternative more proportionate solution consists in the possibility of an individualexamination to ascertain the ability to drive vehicles in categories C1 and C1E by a personwith amblyopia, in the same way as for drivers of vehicles in group I of Annex III to

Directive 2006/126.

36 In those circumstances, the Bayerischer Verwaltungsgerichtshof decided to stay theproceedings and to refer the following question to the Court for a preliminary ruling:

‘Is point 6.4 of Annex III to [Directive 2006/126] compatible with Article 20, Article 21(1)and Article 26 of the [Charter] in so far as that provision requires — without permitting anyderogation — that applicants for Category C1 and Category C1E driving licences have aminimum visual acuity of 0,1 in their worse eye even if those persons use both eyes togetherand have a normal eld of vision when using both eyes?’

The question referred for a preliminary ruling

37 By its question, the referring court essentially asks the Court to determine the validity of point 6.4 of Annex III to Directive 2006/126, which concerns the minimum standards for thedrivers of vehicles in categories C1 and C1E, in particular heavy goods vehicles, in the lightof Articles 20, 21(1) and 26 of the Charter concerning equality before the law,non-discrimination on grounds of disability, and the integration of persons with disabilities.

38 In particular, the referring court considers that the requirement that the drivers of power-driven vehicles in categories C1 and C1E must have a minimum visual acuity of 0,1 for theworse eye, constitutes discrimination on the grounds of disability in respect of persons who


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do not have such visual acuity, since they have binocular vision and a eld of visionsufcient for both eyes. Such a requirement for visual acuity is also incompatible with theprinciple of integration of persons with disabilities and is contrary to the UN Convention onDisabilities.

39 In addition, that court states that, under point 6 of Annex III to Directive 2006/126, group 1

drivers, that is drivers of lighter motor vehicles may be issued a driving licence in‘exceptional cases’ even if they do not satisfy the standards relating to the eld of vision orvisual acuity. However, group 2 drivers, including those applying for a driving licence forthe C1 and C1E vehicle categories, who have visual acuity of less than 0,1 for the worse eyecannot be issued with a driving licence. Thus, the right of those drivers to equal treatmentbefore the law is infringed in so far as the directive does not provide for any possibility foran individual medical examination to show that, although the drivers concerned do notsatisfy the required standards, road safety is not compromised.

40 In order to answer the question referred by the national court, it is necessary to determine,rst of all, whether the EU legislature infringed the right to non !discrimination laid down inArticle 21(1) of the Charter when it adopted the threshold for visual acuity in point 6.4 of Annex III to Directive 2006/126. It is also necessary to examine the possible effects on thatprovision of the UN Convention on Disabilities. Second, it must be determined whetherArticle 26 of the Charter, which enshrines the principle of integration of persons withdisabilities, precludes point 6.4 of Annex III to Directive 2006/126, the validity of which ischallenged. Third, it must be determined whether it is contrary to Article 20 of the Charter,according to which everyone is equal before the law, that drivers of certain heavy goodsvehicles do not have the opportunity to show, by means of an individual medicalexamination, that they are t to drive such vehicles, even in the absence of certain physicalcapacities required by Directive 2006/126, whereas other drivers of certain other types of

vehicles have such a possibility.

The requirement of non-discrimination against persons with disabilities laid down in Article 21 of the Charter

41 It must be determined whether the EU rules at issue in the main proceedings, laying downrequirements for visual acuity for the drivers of power-driven vehicles in categories C1 andC1E is contrary to Article 21(1) of the Charter, according to which ‘[a]ny discriminationbased on any ground such as … disability … shall be prohibited’.

42 It should rst be noted, rst of all, that Article 52(1) of the Charter provides that anylimitation on the exercise of the rights and freedoms recognised by the Charter must beprovided for by law and must respect the essence of those rights and freedoms. Subject tothe principle of proportionality, limitations may be imposed only if they are necessary andgenuinely meet objectives of general interest recognised by the Union or the need to protectthe rights and freedoms of others.

43 The principle of equal treatment is a general principle of EU law, enshrined in Article 20 of the Charter, of which the principle of non-discrimination laid down in Article 21(1) of theCharter is a particular expression. According to settled case-law, that principle requires theEU legislature to ensure, in accordance with Article 52(1) of the Charter, that comparable

situations must not be treated differently and that different situations must not be treated inthe same way unless such treatment is objectively justied (see, to that effect, Case


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C!550/07 P Akzo Nobel Chemicals and Akcros Chemicals v Commission EU:C:2010:512,paragraphs 54 and 55 and the case-law cited). A difference in treatment is justied if it isbased on an objective and reasonable criterion, that is, if the difference relates to a legallypermitted aim pursued by the legislation in question, and it is proportionate to the aimpursued by the treatment concerned (Case C !127/07 Arcelor Atlantique and Lorraine and Others EU:C:2008:728, paragraph 47, and Case C !101/12 Schaible EU:C:2013:661,paragraph 77).

44 Next, as regards the specic question of discrimination on grounds of disability, the notionof ‘disability’ is not dened by the Charter itself.

45 In its case-law on equal treatment in the area of employment and occupation, the Court hasalready held that the denition of ‘disability’ must be understood, for the purposes of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework forequal treatment in employment and occupation (OJ 2000 L 303, p. 16) read in the light of the UN Convention on Disabilities, as long-term physical, mental or psychological

impairments which in interaction with various barriers may hinder the full and effectiveparticipation of the person concerned in professional life on an equal basis with otherworkers (Joined Cases C !335/11 and C !33711 HK Danmark EU:C:2013:222, paragraphs 37to 39; Case C !312/11 Commission v Italy EU:C:2013:446, paragraph 56; and Case C !363/12

Z EU:C:2014:159, paragraph 76).

46 In those circumstances, it must be held, as far as concerns the issue of discrimination ongrounds of disability, that Article 21(1) of the Charter requires the EU legislature, inparticular, not to apply any difference in treatment on the basis of a limitation resulting, inparticular, from long-term physical, mental or psychological impairments which ininteraction with various barriers may hinder the full and effective participation of the personconcerned in professional life on an equal basis with other persons, unless such a differencein treatment is objectively justied.

47 As regards persons like Mr Glatzel, who suffer from a long-term sensory impairment andwho have visual acuity of less than 0,1 in the worse eye, it must be observed that thosepersons do not full the medical requirements in Annex III to Directive 2006/126 and,therefore, cannot be issued with a driving licence, in particular for the vehicle categories C1and C1E. However, it must be held that while, according to the information in the order forreference, the visual acuity in Mr Glatzel’s worse eye is very weak, the fact remains thatwhen he uses both eyes, he has a binocular visual acuity of 1,0, that is, ‘full’ acuity. In that

regard, the Court does not have sufcient information to ascertain whether such impairmentconstitutes a ‘disability’ within the meaning of Article 21(1) of the Charter.

48 It is not necessary for the purpose of determining the validity of Directive 2006/126, in thelight of Article 21(1) of the Charter, to determine denitively whether, in the case in themain proceedings, Mr Glatzel is considered to have a disability within the meaning of thatprovision. Even if the state of a person like Mr Glatzel could be considered as falling withinthe denition of ‘disability’ within the meaning of the Charter, the difference in treatmentconsisting in not issuing him with a driving licence for vehicles in categories C1 and C1E onthe ground that his visual acuity is insufcient may be objectively justied in the light of overriding considerations of road safety.


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49 In that connection, it must be recalled that the Court has already held, as regards the generalprinciple of equal treatment in the context of grounds such as age or sex, that a difference of treatment which is based on a characteristic related to such grounds does not constitutediscrimination — that is to say, an infringement of Article 21(1) of the Charter — where, byreason of the nature of the particular occupational activities concerned or of the context inwhich they are carried out, such a characteristic constitutes a genuine and determining

occupational requirement, provided that the objective is legitimate and the requirement isproportionate (see, to that effect, as regards discrimination on grounds of age, Case C !229/08Wolf EU:C:2010:3, paragraph 35, and Case C !447/09 Prigge and Others EU:C:2011:573,paragraph 66; and, as regards discrimination based on sex, Case 222/84 JohnstonEU:C:1986:206, paragraph 40, and Case C !273/97 Sirdar EU:C:1999:523, paragraph 25).

50 In the same vein, it must be held, for the purposes of the present case, that a difference intreatment applied to a person according to whether or not he has the visual acuity necessaryto drive power-driven vehicles is not, in principle, contrary to the prohibition ondiscrimination based on disability within the meaning of Article 21(1) of the Charter, in so

far as such a requirement actually fulls an objective of public interest, is necessary and isnot a disproportionate burden.

51 In that connection, according to settled case-law, the improvement of road safety is anobjective of general interest of the European Union (see, to that effect, inter alia, CaseC!55/93 van Schaik EU:C:1994:363, paragraph 19; Case C !451/99 Cura AnlagenEU:C:2002:195, paragraph 59; Case 54/05 Commission v Finland EU:C:2007:168,paragraph 40; Case C !110/95 Commission v Italy EU:C:2009:66, paragraph 60; CaseC!384/08 Attanasio Group EU:C:2010:133, paragraph 50; Case C !438/08 Commission vPortugal EU:C:2009:651, paragraph 48; Case C !184/10 Grasser EU:C:2011:324,

paragraph 26; and Case C !224/10 Apelt EU:C:2011:655, paragraph 47). By laying down, inAnnex III thereto, a minimum threshold of visual acuity for the worse eye for drivers ingroup 2, for the purposes of that annex, Directive 2006/126 aims to improve road safety andthus to attain an objective of general interest.

52 As far as concerns judicial review of the requirements of the principle of proportionalityrelating to the minimum standards for the visual acuity necessary to drive power-drivenvehicles, it must be observed that, as regards complex medical assessments such as those atissue in the main proceedings, the EU legislature has a broad discretion and review by theCourt is limited to verifying whether there has been a manifest error of assessment or amisuse of powers, or whether the legislature has manifestly exceeded the limits of itsdiscretion (see, to that effect Case C !425/ 08 Enviro Tech (Europe) EU:C:2009:635,paragraph 47; Case C !343/09 Afton Chemical EU:C:2010:419, paragraph 28; and CaseC!15/10 Etimine EU:C:2011:504, paragraph 60).

53 However, the fact remains that, in cases involving such discretion the EU legislature mustbase its choice on objective criteria (see, Case C !58/08 Vodafone and OthersEU:C:2010:321, paragraph 53) and it must ensure that fundamental rights are observed (see,to that effect, Joined Cases C !92/09 and C !93/09 Volker und Markus Schecke and Eifert EU:C:2010:662, paragraph 46; and Case C !236/09 Association belge des Consommateurs

Test-Achats and Others EU:C:2011:100, paragraph 17).


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54 As regards the necessity of the minimum standards for vision of drivers of power-drivenvehicles, it is essential, in order to ensure road safety, that the persons to whom a drivinglicence is issued possess sufcient physical capabilities, in particular with respect to theirvision, in so far as physical defects may have signicant consequences (see, by analogy, asregards airline pilots, Prigge and Others EU:C:2011:573, paragraph 67). It is well knownthat vision is essential for the purposes of driving power-driven vehicles and, accordingly,

the more that function is reduced, the more it becomes necessary to take into considerationrequirements relating to road safety.

55 Although the prohibition on issuing driving licences applied for to persons whose visualacuity has not reached a certain level is necessary and indeed constitutes an effective meansof improving road safety by excluding those persons from trafc, the fact remains that sucha prohibition must not constitute a disproportionate burden.

56 Thus, in a case such as that in the main proceedings, the principle of proportionalityrequires, in particular, the principle of equal treatment to be reconciled as far as possiblewith the requirements of road safety which determine the conditions for driving motorvehicles (see, by analogy, Johnston EU:C:1986:206, paragraph 38; Sirdar EU:C:1999:523,paragraph 26; and Case C !285/98 Kreil EU:C:2000:2, paragraph 23).

57 Therefore, it must be determined whether point 6.4 of Annex III to Directive 2006/126,which lays down the threshold of visual acuity of 0,1 for drivers of motor vehicles in group2 for the purposes of that annex, is not disproportionate in relation to the objective pursued.

58 It must be recalled that the minimum standards for physical and mental tness for drivingpower-driven vehicles in Annex III to Directive 2006/126 were laid down, as is clear fromrecital 8 in the preamble thereto, on road safety grounds, in accordance with Article 91(1)(c)

TFEU.

59 The committee on driving licences, established pursuant to Article 9 of Directive 2006/126,set up a the ‘Eyesight’ working group which published the report ‘New standards for thevisual functions of drivers’ in May 2005. According to that report, although strictrequirements for vision better serve the objective of road safety, those requirements shouldnot be such that they exclude persons from driving power-driven vehicles without goodreason, given the fundamental importance, both socially and economically of that activity inmodern society.

60 In that report, the experts in the working group, while admitting a lack of research data to

determine the minimum values for visual acuity, took the view that, as regards group 2drivers, for the purposes of Annex III to Directive 2006/126, that is, in particular, drivers of heavy goods vehicles, the minimum value of 0,5 for visual acuity in the worse eye, requiredby that directive, was no longer justied. However, although they took the view that it ispossible to support the argument that driving motor vehicles is a binocular activity and that,accordingly, no requirement concerning monocular visual acuity could be formulated fordrivers in group 2, the ‘Eyesight’ working group concluded that the greater responsibility of group 2 drivers supports the requirement for those drivers to have a ‘spare eye’ to be able, if necessary, to stop the vehicle they are driving on the side of the road using the worse eye.

61 Following those proposals by the ‘Eyesight’ working group, the EU legislature amendedAnnex III to Directive 2006/126, so that the minimum threshold for visual acuity required


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for the worse eye for group 2 drivers, for the purposes of that annex, was reduced from 0,5to 0,1. Furthermore, in its report, the ‘Eyesight’ working group also specically mentions theeffects of amblyopie for the drivers of power-driven vehicles.

62 That being so, it appears that the EU legislature amended that annex in the light of thatknowledge and attempted to limit as much as possible any interference with the rights of

persons suffering from visual defects.

63 However, it is clear from the order for reference that, for the referring court, even thethreshold of 0,1, adopted by Directive 2006/126, appears excessive.

64 As far as concerns the determination of that minimum value relating to visual acuityrequired by Directive 2006/126, it must be recalled that the EU legislature has a broaddiscretion as to complex medical questions, such as those relating to the visual acuitynecessary to drive power-driven vehicles. In such a context, the European Union judicaturecannot substitute its assessment of scientic and technical facts for that of the legislature onwhich the founding treaties have conferred that task (with regard to the latter, see, inter alia,

Afton Chemical EU:C:2010:419, paragraph 28).

65 Moreover, the ‘Eyesight’ working group notes in its report a lack of scientic studies onseveral aspects of eyesight for drivers of power-driven vehicles. In that connection,according to the case-law of the Court, where there is uncertainty as to the existence orextent of risks to the health of individuals, the EU legislature may take protective measureswithout having to wait until the reality and the seriousness of those risks become fullyapparent (see, to that effect, Case C !180/96 United Kingdom v Commission EU:C:1998:192,paragraph 99; Case C !192/01 Commission v Denmark EU:C:2003:492, paragraph 49; andCase C !77/09 Gowan Comércio Internacional e Serviços EU:C:2010:803, paragraph 73).

66 Given the close connection between road safety and the protection of the health of roadusers, where the EU legislature adapts the minimum standards on visual acuity to scienticand technical progress, in accordance with Article 8 of Directive 2006/126, it is open to it, inthe provision of scientic uncertainties, to give priority to considerations relating to theimprovement of road safety. Thus, the fact that the legislature, concerned not to jeopardiseroad safety, has decided not to eliminate all minimum requirements for visual acuity of theworse eye for group 2 drivers, for the purposes of Annex III to that directive, cannot makethe adaptation measure disproportionate.

67 Finally, the referring court states that the fact that Mr Glatzel has not received the drivinglicence applied for may constitute discrimination within the meaning of Article 2 of the UNConvention on Disabilities. It is clear, in particular, from the wording of that article, entitled‘Denitions’, that discrimination based on disability includes all forms of discriminationincluding the refusal of reasonable accommodation.

68 In that connection, it must be recalled that the European Union approved the UNConvention on Disabilities by Decision 2010/48. Consequently, the provisions of thatconvention are, from the time of its entry into force, an integral part of the European Unionlegal order (see Case 181/73 Haegeman EU:C:1974:41, paragraph 5, and Z EU:C:2014:159,paragraph 73). Furthermore, it is clear from the appendix to Annex II to Decision 2010/48

that, as regards personal mobility, Directive 2006/126 is one of the legal acts of theEuropean Union which refer to matters governed by that convention.


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69 However, as is clear from the case-law of the Court, since the provisions of the UNConvention on Disabilities are subject, in their implementation or their effects, to theadoption of subsequent acts of the contracting parties, the provisions of that convention donot constitute, from the point of view of their content, unconditional and sufciently preciseconditions which allow a review of the validity of the measure of EU law in the light of theprovisions of that convention (see, to that effect, Z EU:C:2014:159, paragraphs 89 and 90).

70 However, the fact remains that, according to the case-law of the Court, the primacy of international agreements concluded by the European Union over provisions of secondarylegislation means that such provisions must, so far as is possible, be interpreted in a mannerthat is consistent with those agreements (see, inter alia, Case C !61/94 Commission vGermany EU:C:1996:313, paragraph 52 ; HK Danmark EU:C:2013:222 paragraph 29; and Z EU:C:2014:159, paragraph 72).

71 It must be held that point 6.4 of Annex III to Directive 2006/126 provides unequivocallythat drivers of motor vehicles in categories C1 and C1E must have minimum visual acuity of 0,1 for the worse eye. In those circumstances, it does not appear possible to give thatprovision of secondary law an interpretation which would enable it to circumvent the clearrule laying down that minimum value.

72 It follows from all of the foregoing considerations that the EU legislature, by laying downthe provision whose validity is challenged, has weighed the requirements of road safety andthe right of persons affected by a visual disability to non-discrimination in a manner whichcannot be regarded as disproportionate in relation to the objectives pursued.

73 Having regard to all of the foregoing considerations, it must be held that consideration of the question referred does not reveal any information capable of affecting the validity of

point 6.4 of Annex III to Directive 2006/126 in the light of Article 21(1) of the Charter.

The integration of persons with disabilities laid down in Article 26 of the Charter

74 It must be recalled, as is clear from Article 52(5) and (7) of the Charter and theExplanations relating to the Charter of Fundamental Rights (OJ 2007 C 303, p. 17)concerning Articles 26 and 52(5) of the Charter, that reliance on Article 26 thereof beforethe court is allowed for the interpretation and review of the legality of legislative acts of theEuropean Union which implement the principle laid down in that article, namely theintegration of persons with disabilities.

75 As regards the implementation of that principle by Directive 2006/126, it is clear inparticular from the wording of recital 14 in the preamble thereto that ‘[s]pecic provisionsshould be adopted to make it easier for physically disabled persons to drive vehicles’.Likewise, Article 5(2) of that directive refers to the conditions for the issue of drivinglicences to drivers with disabilities, in particular as regards the authorisation to drive adaptedvehicles.

76 Thus, in so far as Directive 2006/126 is a legislative act of the European Unionimplementing the principle contained in Article 26 of the Charter, the latter provision isintended to be applied to the case in the main proceedings.

77 Furthermore, by virtue of the second sentence of Article 51(1) of the Charter, the EU


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legislature is to observe and promote the application of the principles laid down in it. Asregards the principle of the integration of persons with disabilities, Article 26 of the Charterstates that the Union is to recognise and respect the right of persons with disabilities tobenet from measures designed to ensure their independence, social and occupationalintegration and participation in the life of the community.

78 Therefore, although Article 26 of the Charter requires the European Union to respect andrecognise the right of persons with disabilities to benet from integration measures, theprinciple enshrined by that article does not require the EU legislature to adopt any specicmeasure. In order for that article to be fully effective, it must be given more specicexpression in European Union or national law. Accordingly, that article cannot by itself confer on individuals a subjective right which they may invoke as such (see, to that effect, asregards Article 27 of the Charter, Case C !176/12 Association de mediation socialeEU:C:2014:2, paragraphs 45 and 47).

79 Having regard to all of the foregoing considerations, it must be held that the considerationof the question has not revealed any information capable of affecting the validity of AnnexIII, paragraph 6.4 of Directive 2006/126 in the light of Article 26 of the Charter.

Equality before the law laid down in Article 20 of the Charter

80 The referring court states that, for group 1 drivers under Annex III of Directive 2006/126,who do not satisfy the standards relating, in particular, to visual acuity, the issue of a drivinglicence may be envisaged in ‘exceptional cases’, where a driver submits to an individualexamination to test his tness to drive. Thus, the fact that there is no such possibility forgroup 2 drivers under that annex, may constitute a difference in treatment contrary toArticle 20 of the Charter.

81 As stated in paragraph 43 of the present judgment, that article, which is entitled ‘Equalitybefore the law’ aims to ensure inter alia that comparable situations do not receive differenttreatment.

82 Therefore, it must be ascertained whether the situation of drivers in group 1 under Annex IIIof Directive 2006/126 and that of group 2 drivers under the same annex are comparable.

83 In that connection, as the Advocate General observed in point 62 of his Opinion, that theEU legislature took care to create two categories of drivers on the basis of the size of thevehicle, the number of passengers carried and the responsibilities which accordingly result

from driving such vehicles. The characteristics of the vehicles concerned, such as the size,weight or manoeuvrability of those vehicles justify the existence of different conditions forthe issue of a driving licence in light of the way they are driven. Consequently, the situationsof those drivers of such vehicles are not comparable.

84 In so far as those situations are not comparable, a difference in treatment of the situationsconcerned does not infringe the right of drivers in one or other of the groups to ‘equalitybefore the law’ in Article 20 of the Charter.

85 Thus, since the situation of drivers in groups 1 and 2 is not comparable, Article 20 of theCharter does not preclude Annex III, paragraph 6 to Directive 2006/126, in so far as thatparagraph allows drivers in group 1 to be issued with a driving licence in ‘exceptional


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circumstances’, even in the absence of a visual acuity satisfying the requirements laid downby that directive for drivers in that group, but does not allow it for group 2 drivers.

86 Having regard to all of the foregoing considerations, it must be held that consideration of the question does not reveal any information capable of affecting the validity of point 6.4 of Annex III to Directive 2006/126 in the light of Articles 20, 21(1) or 26 of the Charter.

Costs

87 Since these proceedings are, for the parties to the main proceedings, a step in the actionpending before the national court, the decision on costs is a matter for that court. Costsincurred in submitting observations to the Court, other than the costs of those parties, are notrecoverable.

On those grounds, the Court (Fifth Chamber) hereby rules:

The examination of the question does not reveal any information capable of affectingthe validity of point 6.4 of Annex III to Directive 2006/126/EC of the EuropeanParliament and of the Council of 20 December 2006 on driving licences, as amended byCommission Directive 2009/113/EC of 25 August 2009 in the light of Articles 20, 21(1)or 26 of the Charter of Fundamental Rights of the European Union.

[Signatures]



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Fundamental rights and non-discrimination.

INTRODUCTION

The founding Treaties contained no specific provisions on fundamental rights. The creditfor gradually developing a system of guarantees for fundamental rights throughout theEuropean Union has to go to the Court of Justice.

The rulings given by the Court have been essentially based on:

Article 220 (ex Article 164) of the EC Treaty establishing the European Community,which requires the Court to ensure that the law is observed in the interpretation andapplication of the Treaty;

the political dimension of the Community, which is grounded in a European modelof society, including the protection of fundamental rights recognised by all Member States.

By bringing fundamental rights to the fore, those who drafted the Treaty of Amsterdamwere endeavouring to give formal recognition to human rights. The provisions of the newTreaty include the following:

Article 6 (ex Article F) of the EU Treaty has been amended so as to reaffirm theprinciple of respect for human rights and fundamental freedoms;

a procedure is laid down for dealing with cases where a Member State hascommitted a breach of the principles on which the Union is based;

more effective action is to be taken to combat not only discrimination based onnationality but also discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation;

new provisions on equal treatment for men and women are inserted in the Treatyestablishing the European Community;

individuals are afforded greater protection with regard to the processing and free

movement of personal data;the Final Act was accompanied by declarations on the abolition of the deathpenalty, respect for the status of churches and philosophical or non-confessionalorganisations, and on the needs of persons with a disability.

BACKGROUND

The place given to fundamental rights in the Community Treaties has changedconsiderably since the European venture was first launched. At the outset, fundamentalrights were not a central concern of those who drafted the Paris and Rome Treaties,

which reflect a sectoral and functionalist approach. The Treaty of Paris, whichestablished the European Coal and Steel Community (ECSC), is concerned solely with

Fundamental rights and non-discrimination. http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=...

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the coal and steel industries. This sectoral approach gained strength after the failure, in1954, of the European Defence Community (EDC) and the concomitant moves towardspolitical union. It thus became a feature of the Rome Treaties establishing the European

Atomic Energy Community (Euratom) and the European Economic Community (EEC). Although the EEC Treaty was wider in scope than the other two, all three Treatiescovered well-defined economic spheres.

One consequence of this sectoral approach was to set the founding Treaties apart fromany basic law of a constitutional nature which incorporated a solemn declaration onfundamental rights. The Treaties in question were not suited to the inclusion of such apreamble, particularly since the Council of Europe's European Convention on HumanRights (ECHR), signed in 1950, already provided an advanced model for the protection of human rights in Europe.

The situation changed rapidly as the Court of Justice, in the judgments it handed down,began to monitor the respect shown for fundamental rights by the Community institutionsand the Member States whenever they took action within the areas covered by

Community law. The Court recognised, for example, the right to property and the freedomto engage in economic activity, which are essential to the smooth operation of the internalmarket. The Court held that fundamental rights ranked as general principles of Community law and that they were based on two:

the constitutional traditions of the Member States;

the international Treaties to which the Member States belonged (and the ECHR inparticular).

In 1977 the European Parliament, the Commission and the Council signed a Joint

Declaration in which they undertook to continue respecting the fundamental rights arisingfrom the two sources identified by the Court. In 1986 a further step was taken when thepreamble to the Single European Act included a reference to the promotion of democracyon the basis of fundamental rights.

The EU Treaty states that "[t]he Union shall respect fundamental rights, as guaranteed bythe European Convention for the Protection of Human Rights and FundamentalFreedoms signed in Rome on 4 November 1950 and as they result from theconstitutional traditions common to the Member States, as general principles of Community law" (Article 6(2), ex Article F.2).

At the same time, the idea that the Community as such should accede to the ECHR hadbegun to circulate. The Council decided to ask the Court's opinion on whether membership of the Convention would be compatible with the Treaties. In its opinion of 28 March 1996 the Court held that, as Community law stood at that time, the Communitywas not competent to accede to the Convention.

As European integration has progressed, the European Union has gradually widened itsfield of action, reflecting the determination of the Member States to act as one in areaswhich until now have been a strictly national preserve (e.g. internal security or the fightagainst racism and xenophobia). In view of these changes, which necessarily go beyondthe sectoral context of the Community's early days and impinge on the daily life of European citizens, there is a need for clear legal texts which proclaim respect for


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fundamental rights as a basic principle of the European Union. The Treaty of Amsterdammeets this need.

PRINCIPLES

The Treaty of Amsterdam clarifies Article 6 (ex Article F) of the Treaty on European Unionby stating unequivocally that the Union is founded on the principles of liberty, democracy,respect for human rights and fundamental freedoms, and the rule of law, principles whichare common to the Member States.

It also amends the preamble to the EU Treaty, confirming the Member States' attachmentto fundamental social rights as defined in the European Social Charter of 1961 and theCommunity Charter of the Fundamental Social Rights of Workers of 1989.

Before the Treaty of Amsterdam entered into force, Article F.2 of the EU Treaty stressedrespect for the rights guaranteed by the ECHR and those resulting from the constitutionaltraditions common to the member states. However, under former Article L (nowrenumbered Article 46) the powers of the Court of Justice did not extend to Article F, solimiting its impact. Since ensuring respect for the law in the interpretation and applicationof the Treaty is the Court's task, the scope of fundamental rights was correspondinglyreduced.

By amending Article 46, the Treaty of Amsterdam ensures that Article 6(2) will be applied.The Court now has the power to decide whether the institutions have failed to respectfundamental rights.

BREACH BY A MEMBER STATE OF THE PRINCIPLES ON WHICH THE UNION ISBASED

The Treaty of Amsterdam proclaims that the Union is founded on the principles of liberty,democracy, respect for human rights and fundamental freedoms, and the rule of law,principles which are common to the Member States. At the same time, the new Treatyacknowledges that these principles may be infringed by a Member State and lays downthe procedure which the Union should follow in dealing with the Member Stateconcerned.

Establishment of the existence of a breach

On a proposal from the Commission or one third of the member states, the Council - inthe shape of the heads of state or government - may determine the existence of a breachby a Member State. The breach must be "serious and persistent". The EuropeanParliament has to give its assent by a majority of its members and a two-thirds majority of the votes cast. The government of the Member State in question is first invited to submitits observations.

The Council's decision establishing a breach will be considered unanimous even where aMember State abstains.

Suspension of the Member State concerned

Once a serious and persistent breach has been established, the Council may (but need

not necessarily) suspend some of the Member State's rights under the Treaty. However,the country remains bound by its obligations. The suspension of rights might, for


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instance, involve withdrawing the Member State's voting rights in the Council.

At this second stage, the Council acts by a qualified majority, disregarding the votes of the Member State concerned.

Variation or revocation of the suspension

If there is a change in the situation that led to a Member State's suspension, the Councilcan decide to vary or revoke the measures taken.

When taking such a decision, the Council acts by a qualified majority, disregarding thevotes of the Member State concerned.

THE FIGHT AGAINST DISCRIMINATION

Article 12 (ex Article 6) of the EC Treaty provides that any discrimination on the groundsof nationality is prohibited. At the same time, Article 141 (ex Article 119) lays down theprinciple of non-discrimination between men and women, though only as far as equal pay

is concerned.The Treaty of Amsterdam restates the principle of non-discrimination in stronger terms,adding two new provisions to the EC Treaty.

The new Article 13

This Article complements Article 12, which prohibits discrimination on grounds of nationality. The new Article enables the Council to take appropriate action to combatdiscrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

When the Council acts on the basis of Article 13, it does so unanimously on a proposalfrom the Commission and after consulting the European Parliament.

Declaration regarding persons with a disability

The new Article 13 provides for measures to combat discrimination based on disability.The Intergovernmental Conference that drew up the Treaty of Amsterdam sought to offer an even stronger guarantee by including a declaration in the Final Act, stating that theCommunity institutions must take account of the needs of persons with a disability whenadopting measures to approximate Member States' legislation..

EQUALITY BETWEEN MEN AND WOMEN

Article 2 of the Treaty provides that it will be the Community's task to promote theharmonious, balanced and sustainable development of economic activities,environmentally-friendly growth, a high degree of convergence of economic performance,a high level of employment and social protection, the raising of the standard of living andquality of life, economic and social cohesion and solidarity among Member States. Article3 lists the various measures which the Community should take to carry out the tasksspecified in Article 2.

The Treaty of Amsterdam extends these two Articles to include equality between men

and women, which previously figured only in Article 141 (ex Article 119) of the EC Treaty


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(more restricted in scope since it relates only to equal pay). The two additions made areas follows:

Amendment of Article 2

The list of tasks facing the Commission will include the promotion of equality betweenmen and women.

Amendment of Article 3

A new paragraph has been added, reading as follows:

"In all the other activities referred to in this Article, the Community shall aim to eliminateinequalities, and to promote equality, between men and women."

PROCESSING OF PERSONAL DATA

The main Community measure in this area is the 1995 Directive on the protection of individuals with regard to the processing of personal data and on the free movement of such data. In the absence of a specific legal basis, this Directive was adopted under

Article 95 (ex Article 100a) of the EC Treaty, which concerns the approximation of legislation relating to the single market.

The free movement of persons necessarily entails the establishment of informationsystems on a European scale. In view of these changes, a new article has been insertedin the EC Treaty, making the rules on the protection of individuals applicable to theCommunity institutions themselves.

The new Article 286

This Article will consist of two paragraphs which will provide respectively that:

from 1 January 1999, Community acts on the protection of individuals with regard tothe processing of personal data and the free movement of such data apply to theCommunity institutions and bodies;

before 1 January 1999, the Council is to establish an independent supervisory bodyresponsible for monitoring the application of those Community acts to Communityinstitutions and bodies.


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JUDGMENT OF THE COURT9 September 2003 *

In Case C-25/02,

REFERENCE to the Court under Article 234 EC by the Bundesverwaltugericht (Germany) for a preliminary ruling in the proceedings pending before

court between

Katharina Rinke

and

Ärztekammer Hamburg,

on the interpretation of Article 5 of Council Directive 86/457/EEC 15 September 1986 on specific training in general medical practice (OJ L 267, p. 26) and Article 34 of Council Directive 93 16 EEC of 5 April 1993 tofacilitate the free movement of doctors and the mutual recognition of tdiplomas, certificates and other evidence of formal qualifications (OJ 1993 Lp. 1), and on the compatibility of those provisions with the prohib ition of inddiscrimination on grounds of sex as laid down in Council Directive 76 20 7/EECof 9 February 1976 on the implementation of the principle of equal treatmenmen and women as regards access to employment, vocational training promotion, and working conditions (OJ 1976 L 39, p. 40),


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THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.-P. Puissochet M. Wathelet,R. Schintgen and C.W.A. Timmermans (Presidents of Chambers), C. GulmD.A .O. Ed ward, A. La Pergola, P. Jann (Rapporteur), V. Skouris, F. MacN . Colneric, S. von Bahr, J.N. Cunha Rodrigues and A. Rosas, Judges,

Advocate General: L.A. Geelhoed,

Registrar: M.-F. Contet, Principal Administrator,

after considering the written observations submitted on behalf of:

— M s Rinke, by D. Goergens, Rechtsanwältin,

— the Swedish Governm ent, by A. Kruse, acting as Agent,

— the Council of the European Union, by A. Lo M onaco and J.-P. Hix, acting asAgents,

— the Commission of the European Com munities, by M . Patak ia, N . Yeand B. Martenczuk, acting as Agents,

having regard to the Report for the Hearing,

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RINKE

after hearing the oral observations of Ms Rinke, the Council and the Commissat the hearing on 12 November 2002,

after hearing the Opinion of the Advocate General at the sitting on 6 Febru2003 ,

gives the following

Judgment

1 By orde r of 8 N ov em ber 2 0 0 1 , received at the Co urt on 31 Jan ua ry 20 02 ,

Bundesverwaltungsgericht (Federal Administrat ive Court) referred two questfor a preliminary ruling under Article 234 EC on the interpretation of Article 5Council Direct ive 86 457 EEC of 15 September 1986 on specific training ingeneral medical practice (OJ 1986 L 267, p. 26) and Article 34 of CounDirective 93 16 EEC of 5 April 1993 to facilitate the free movement of doctorsand the mutual recognition of their diplomas, certificates and other evidenceformal qualifications (OJ 1993 L 165, p. 1), and on the compatibility of thprovisions with the prohibition of indirect discrimination on grounds of sexlaid down in Council Direct ive 76/207/EEC of 9 February 1976 on timplementat ion of the principle of equal t reatment for men and women regards access to employment , vocat ional t ra ining and promotion, and workcondit ions (OJ 1976 L 39, p. 40).

2 Tho se quest ions have been raised in proceeding s betwe en M s Rinke an d Ärztekammer Hamburg (Hamburg Chamber of Medical Pract i t ioners) conceing the refusal by the latter to issue Ms Rinke with a certificate of 'speci

training in general medical practice' and to confer on her the right to use the t'General Medical Practi t ioner ' .

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Legal background

3 According to Article 1(1) of Directive 76/207, its purpose is to put into effethe Member States the principle of equal treatment for men and womenregards access to employment, including promotion, and vocational trainingas regards working conditions and social security.

4 Th e principle of equal trea tment, for the purpose of Article 2(1) of Dire76/207, means that there must be no discrimination whatsoever on groundssex, whether directly or indirectly, by reference in particular to marital or fastatus.

5 Under Article 3 of Directive 76/207 , the application of the principle of etreatment means that there must be no discrimination whatsoever on groundsex with respect to the conditions of access to jobs or posts and to all levels ooccupational hierarchy.

That provision requires Member States to take the measures necessary to abany laws, regulations and administrative provisions that are contrary to principle of equal treatment.

7 The same obligation is imposed on M em ber States by Article 4(a) of Dire76/207 with regard to access to all types and to all levels of vocational guidavocational training, advanced vocational training and retraining.

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RINKE

8 Article 2( l)(b ) of Directive 86 /457 provides that specific training in genmedical practice must last at least two years and must be full-time.

9 Article 5 of Directive 86/457 is worded as follows:

1 Without prejudice to the principle of full-time training laid down Article 2(l)(b), Member States may authorise specific part-time traininggeneral medical practice in addition to full-time training where the followparticular conditions are met:

— the total duration of training may not be shortened because it is befollowed on a part-time basis,

— the weekly duration of part-time training may not be less than 60%weekly full-time training,

— part-time training must include a certain number of full-time trainperiods, both for the training conducted at a hospital or clinic and for training given in an approved medical practice or in an approved cenwhere doctors provide primary care. These full-time training periods shalof sufficient number and duration as to provide adequate preparation foreffective exercise of general medical practice.

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2. Part-time training must be of a level of quality equivalent to that of full-training. It shall lead to a diploma, certificate or other evidence of forqualification, as referred to in Article 1.'

10 Directive 86 /457 has been incorporated into Directive 93/16.

1 1 Article 34 of Directive 93/16 has the same content as Article 5 of Dire86/457.

1 2 Article 25 of Directive 93/16 allows Member States to authorise specitraining on a part-time basis under conditions approved by the competnational authorities when training on a full-time basis would not be practicfor well-founded individual reasons. In contrast to Article 34 of Directive 9Article 25 does not require tha t a certain number of training periods musfull-time.

Dispute in the main proceedings and questions for a preliminary ruling

13 M s Rinke is a doctor. During her specific training in general medicine she wopart-time in a general medical practice, in particular from 1 April 1994

31 March 1995, working more than 60% of normal working hours as a furtraining assistant.

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RINKE

14 On 4 M ay 1995 Ms Rinke applied to the respondent in the main proceedinga certificate of 'specific training in general medical practice' and the right tothe title 'General Medical Practitioner'. By decision of 5 May 1995 respondent in the main proceedings rejected that request on the ground thaaccordance with the first sentence of the second paragraph of Article 13b o'Hamburgische Ärztegesetz' (Hamburg Law on Medical Practitioners), prescribed training had to be carried out in a general medical practice foleast six months on a full-time basis.

15 Ms Rinke brought an action before the Verwaltungsgericht (Adm inistra

Court) against that decision, arguing that the rule in the HamburgisÄrztegesetz is contrary to the principle of non-discrimination laid downCommunity law by Directive 76/207. The requirement imposed by Article 5(Directive 86/457 ought, she submitted, to be overridden by the fundameprinciple of non-discrimination.

16 The Ärztekamm er Ham burg contended that the full-time training requirethat legislation was objectively justified.

17 The Verwaltungsgericht dismissed the action. On 18 February 1999 Bundesverwaltungsgericht dismissed the appeal against the decision of Verwaltungsgericht. It held that the rule adopted by the Hamburg legislaturein any event justified with regard to Community law by Article 34(1) of Dire93/16, which corresponds to Article 5(1) of Directive 86/457. That rule,Bundesverwaltungsgericht held, overrode Directive 76/207 on equal treatbecause it was both more specific and m ore recent. It complied with the prinprohibiting arbitrary measures and with the principle of proportionality.

18 By decision of 9 January 20 01 the Bundesverfassungsgericht (Federal Cstitutional Court) set aside that judgment on appeal by Ms Rinke and referrecase back to the Bundesverwaltungsgericht. The latter, the Bundesverfassu

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gericht held, had, in effect, infringed the applicant's right to a hearing beforproper statutory court by failing to refer the question of the relationship betArticle 34(1) of Directive 93/16 and Directive 76/207 on equal treatment tCourt of Justice of the European Communities for a preliminary ruling. Noit clear that the principles that more specific and more recent legal rules precedence were necessarily principles that could be applied in CommunityFurther, the principle of non-discrimination might enjoy the status ofundamental right in Community law and take precedence over Directive 9

19 By orde r of 8 Novem ber 200 1 the Bundesverwaltungsgericht decided to stproceedings. In its view there was no doubt that excluding the possibilitcompleting all training on a part-time basis affected women to a greater ethan men, as experience showed that a greater proportion of women advantage of the opportunities offered by part-time work. However, it wascertain that Directive 76/207 applied in the present case. In contrast to the of discrimination of part-time workers compared with full-time workers whave been the subject of the Court's case-law, the present case did not relaunfavourable consequences attached to certain employment conditions. On

contrary , the legislature precluded a certain form of activity — part-twork — for all workers concerned.

20 Further, the obligation to undertake full-time training in a general medpractice could be justified by factors which had nothing to do with discriminatio

on g roun ds of sex. On the other hand, Article 25 of Directive 93 /16, which rto specialist medical training in general medical practice, did not provideperiods of mandatory full-time training.

21 On the assumption that the requirement to undertake full-time trainconstituted an infringement of the principle of non-discrimination, the quethen arose as to how to resolve such incompatibility of legal rules.

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RINKE

22 Th e Bu ndes verw altun gsge richt therefore decided to refer the following q ues tto the Court for a preliminary ruling:

' (1) Does the requirement laid down in Directives 86/457/EEC and 93/16/EECthe effect that certain components of the specific training in general medipractice — com plet ion of w hich confers the right to use the tit le ge nemedical prac ti t ion er — m ust be un der tak en ful l- t ime, consti tute ind irdiscrimination on grounds of sex within the meaning of Direct76 207 EEC?

(2) If the answer to Question 1 is yes:

(a) How is the incompatibility of Directive 76/207 /EEC, on the one hwith Directives 86/457/EEC and 93/16/EEC, on the other, to resolved?

(b) Does the prohibition of indirect discrimination on grounds of constitute a basic unwritten right under Community law that overriany conflicting rule in secondary Community legislation?'

The questions submitted for preliminary ruling

23 It is appropriate to begin by considering Question 2.

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RINKE

Question 1

Observations of the parties

29 M s Rinke and the Swedish G ove rnm ent argue tha t the provisions wh ich requpart-time training in general medicine to include a certain number of full-tim

training periods place considerably more women at a disadvantage than meTherefore, there is indirect discrimination on grounds of sex unless thosprovisions can be justified by objective factors independent of sex. However, this case, such a justification does not exist, as is demonstrated by the fact that other specialist medical training can be undertaken on a wholly part-time basThe presumed aim of the provisions in quest ion, namely to improve thprotection of public health, may be achieved by other measures that are ndiscriminatory.

30 The Council and the Commission take the contrary view that the principleequal treatment is not infringed. According to the Council, the provisions question do not place part-time trainee doctors at a greater disadvantage ththeir full-time colleagues — the conditions governing access to the profession the same, practical training and periods of full-time training being compulsory both categories of trainee doctors. The Commission argues that the questiwhether that requirement affects a larger proportion of women than men mustdecided by the national courts, which must refer for that purpose to the availastatistical information. The very general findings in the order for reference are sufficient to satisfy the requirements for a finding of indirect discrimination.

31 In any event, the Council and the Commission submit that Article 5(1) Directive 86/457 and Article 34(1) of Directive 93/16 are justified by object

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JUDGMENT OF 9 9 2003 — CASE C-25/02

reasons which are unrelated to any discrimination on grounds of sex. provisions seek to ensure training of a high quality to allow the free movemegeneral medical practitioners and to guarantee a high level of health protecPart-time training in general medical practice poses a number of problems wcan be overcome only by certain periods of full-time training. As to the possfor specialist practitioners to undertake all of their training on a part-time bthe Commission takes the view that the latter do not occupy the same ceposition in the health care system as general practitioners.

Findings of the Court

32 First, the rule that par t-tim e training must include a certain number of periofull-time training does not constitute direct discrimination, since it appliemale and female workers alike. It is thus necessary to examine whether i

constitute indirect discrimination.

33 According to settled case-law , a provision involves indirect discrimination afemale workers when, although worded in neutral terms, it works to disadvantage of a much higher percentage of women than men, unless

difference in treatment is justified by objective factors unrelated to discrimination on grounds of sex (see, to that effect, Case C-226/98 Jørgensen[2000] ECR I-2447, paragraph 29).

34 It is therefore necessary to examine whethe r the requirement tha t general m

training must include a certain number of periods of full-time training does iwork to the disadvantage of a much higher percentage of women than men

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RINKE

35 It is clear from the statistical d ata referred to by th e Advocate General a t points 3 6and 37 of his Opin ion tha t the percentage of women work ing par t - t ime is muchhigher than that of men work ing on a part- t ime basis . That fact , which can beexplained in par t icular by the uneq ual division of domest ic tasks between w om enand men shows that a much higher percentage of women than m en wishing t ot rain in general medicine have difficulties in w orki ng ful l- time d uring p art of theirtraining. Thus, such a requirement does in fact place women a t a par t iculardisadvantage as com pared w i th men.

36 In those circumstances, it is necessary t o examine whether such a r equ i rement isjustified by objective factors un relate d to d iscr iminat ion on g rounds of se x.

37 It mus t be observed in this regard that , according to the third recital in thepreamble to Direct ive 86/457 and the 16th recital in the p reamble t o Directive93/16 , specific training for a general medical practi t ioner must prepare him betterto fulfil his part icu lar function, wh ich depe nds to a great extent on his personalknowledge of his pa t ients ' environment and consists in giving advice on theprevent ion of i l lness, protecting the pat ie nt 's general hea lth and providingappropr ia te t rea tment .

38 As the Council and the Commission rightly state the harmonisa tion atCommunity level of that training not only facilitates the free movement ofdoctors but also contributes to a high level of public health protection in theCommunity.

39 In the pursuit of those objectives the Community legislature must be allowed awide margin of discretion which cannot however render meaningless the

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implementation of a fundamental principle of Community law such as elimination of indirect discrimination on grounds of sex.

40 In Article 5(1) of Directive 86/457 and Article 34(1) of Directive 93/16 Community legislature considered that adequate preparation for the effecexercise of general medical practice requires a certain number of periodsfull-time training, both for students in hospitals or clinics and for thoseapp roved medical practices or in approved centres where doctors provide primcare. That measure can be considered as being appropriate to achieve tobjectives pursued. It was reasonable for the legislature to take the view thatrequirement enables doctors to acquire the experience necessary, by followpatients' pathological conditions as they may evolve over time, and to obsufficient experience in the various situations likely to arise more particularlgeneral medical practice.

41 Th e Community legislature has left to the nat ional legislatures the task of fithe number and duration of full-time training periods. It has simply stated those periods must be of such a number and duration as adequately to preparthe effective exercise of general medical practice. In view of the margindiscretion which the Community legislature has in the matter in question, sumeasure may be regarded as not exceeding what is necessary to achieve objectives set out in paragraph 38.

42 It follows tha t the requirement in question must be regarded as justifiedobjective factors independent of any discrimination on grounds of sex.

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RINKE

43 The answer must therefore be tha t exam ination of Question 1 has faileddisclose any factor capable of affecting the validity of the provision containeArticle 5(1) of Directive 86/457 and Article 34(1) of Directive 93/16, accordinwhich part-time training in general medical practice must include a certnumber of periods of full-time training.

Costs

44 The costs incurred by the Swedish Governm ent, the Council and the Com miswhich have submitted observations to the Court, are not recoverable. Since thproceedings a re, for the parties to the m ain proceed ings, a step in the proceedpending before the national court, the decision on costs is a matter for that co

On those grounds,

THE COURT,

in answer to the questions referred to it by the Bundesverwaltungsgericht order of 8 November 2001, hereby rules:

1. Compliance with the prohibition of indirect discrimination on grounds of sis a condition governing the legality of all measures adopted by thCommunity institutions.

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2. Examination of Question 1 has failed to disclose any factor capableaffecting the validity of the provision contained in Article 5 1) of CouDirective 86 457 EEC of 15 September 1986 on specific training in generamedical practice and Article 34 1) of Council Directive 93 16 EEC of 5 April1993 to facilitate the free movement of doctors and the mutual recognitiontheir diplomas, certificates and other evidence of formal qualificatioaccording to which part-time training in general medical practice minclude a certain number of periods of full-time training.

Rodriguez Iglesias Puissochet Wathelet

Schintgen Timmermans Gulmann

Edward La Pergola Jann

Skouris Macken Colneric

von Bahr Cunha Rodrigues Rosas

Delivered in open court in Luxembourg on 9 September 2003.

R. Grass

Registrar

G.C. Rodriguez Iglesias

President

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1

Charles River Associates Annual Conference

5 December 2012, Brussels

Legal certainty, proportionality, effectiveness: theCommission's practice on remedies

Alexander ITALIANER Director GeneralDirectorate General for CompetitionEuropean Commission



2

Ladies and Gentlemen,

It is always a pleasure to be back at the CRA conference and I would like to thank CristinaCaffarra for inviting me again.

Today, I will speak about the Commission's practice on remedies, and more precisely aboutthe convergence that exists between merger control and antitrust in this area.

We seldom refer to our approach on remedies across instruments and I thought this wouldbe of interest to you.

Remedies lie at the core of competition law enforcement. To give you some figures,between 2004 and October 2012, we cleared 147 mergers subject to commitments, of which115 in Phase I and 32 in Phase II. In the same period we took 26 antitrust commitmentdecisions.

In mergers, the right remedies allow companies to get on with their business plans, after arelatively quick interaction with the Commission. In antitrust, we may either imposeremedies based on Article 7 of Regulation 1/2003, or receive them from parties and makethem binding under Article 9. When companies voluntarily offer the right commitments,they can avoid costly procedures and possible sanctions with associated reputational risks.

The Commission's practice with merger remedies is now long-established. In antitrust, ourexperience has grown since the introduction of Article 9 commitments. We have drawn onthe practical lessons learned from mergers and convergence has also been brought forwardby applying the same guiding principles in both instruments.

I believe that this convergence has led to increased predictability for companies andpractitioners and has strengthened our remedy policy overall.

I will first speak about designing good remedies, then about the Commission's recentpractice and converging trends, and I will finish with issues related to implementation.

1. The search for the right remedy: guiding principles

Defining adequate remedies is a complex exercise for all sides.

When companies propose remedies upfront, they will primarily have in mind the impact on

business. For the Commission on the other hand, what matters most is the suitability of theremedies to fully address a particular competition concern or distortion. We also have tothink about the practical implementation of the envisaged remedies from the outset.

So these two objectives may not coincide.

This is why discussions on remedies with the parties are essential, though of course they arenot a bargaining process. A constructive dialogue allows the Commission to endorse



3

remedies which effectively eliminate competition concerns, are proportionate and providelegal certainty.

Effectiveness, proportionality and legal certainty are the guiding principles in all our

remedies cases.

A. I consider that the most important "innovation" in our remedies these last years has beena simplification push on our side for both mergers and antitrust, leading to greatereffectiveness.

Our case experience had taught us that if remedies are too specific, they are not practicaland the risk of circumvention is higher.

So we are encouraging remedies that are simple, workable and easy to implement. Let megive you some illustrations:

1. In terms of antitrust cases for example, the structural remedies in the RWE, E.ONelectricity or ENI antitrust cases - about which I will talk later - were swiftlyimplemented. They ensured that the abuse could not be repeated and created theconditions for undistorted competition on energy markets. Similarly, in the DeutscheBahn/Arriva merger, the divestiture of Arriva’s German subsidiary clearly removedthe concerns arising from the parties’ overlap in the German rail and bus passengertransport markets.

2. In terms of process, our search for effectiveness and proportionality is apparent inthe increased number and quality of our market tests in mergers and antitrust.

Market testing is a key tool which allows us to tailor the remedies to the competitionconcerns.

Effectiveness is also guiding more specific process elements – such as for instancebuyer approval by the Commission in mergers. In oligopolistic markets for example,this implies that significant competitors of the merging parties are unlikely to beaccepted as suitable purchasers of divested assets.

B. As to proportionality, the Commission has made it clear that a remedy cannot be madebinding if it does not adequately address competition concerns. Also, if equally effective, the

Commission will prefer the less burdensome remedy for companies.

Such a situation arose in the acquisition by Kinnevik of Billerud, two Swedishpackaging paper companies, cleared last week. We realised that the divestiture of awhole paper mill would have been disproportionate, so following a market test, weconsidered that the carve-out and divestiture of a single paper machine would besufficient to effectively remove our concerns. The machine will remain in a mill



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owned by the merged entity, and the purchaser will operate it at the same site,whilst being an independent competitor .

Designing good remedies means effectively removing competition concerns, through

workable and proportionate solutions for businesses.

C. Through these solutions, we offer legal certainty to the businesses concerned by tellingthem that they can carry-on with their plans. We assure other market players thatcompetition will remain undistorted or be restored. And we set useful precedents forbusinesses to know, in general, the kind of remedies we are likely to adopt in futureoccasions.

Let me turn to our recent practice.

2. Remedies and convergence in practice

Legally speaking, a discussion on remedies starts from different premises in mergers andantitrust:

Merger transactions bring about a lasting change in the structure of the firms competing inthe market. There is thus an inherent link between structural remedies and the very scope ofour merger assessment.

In antitrust, on the other hand, anti-competitive agreements or abuses of market power arenormally of a behavioural nature. When the Commission wishes to bring an infringement toan end according to Art 7 of Reg. 1/2003, it may impose on the companies concerned eitherbehavioural or structural remedies, depending on the conduct at hand. Structural remediescan however only be used in antitrust where there is no equally effective behaviouralremedy or where such behavioural remedy would be more burdensome for companies. Thismay explain why behavioural remedies have classically been more frequent in antitrust.

Despite these differences, there are many similarities in the types of remedies we use. Letme explain.

A. Structural remedies

In mergers , divestitures are an effective way to address concerns resulting from horizontaloverlaps, and may also be the best means to respond to vertical or conglomerate concerns.For instance in phase I cases, they frequently allow us to reach the standard of being "clear-cut" so that we can rule-out any serious doubts.

The benchmark for the acceptance of any other remedies in mergers is that they should beas effective as divestitures.

We have had many such structural merger remedies recently:



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In UTC/ Goodrich, the business of Goodrich in aircraft electrical power generationand distribution was divested. The package included offering a competing enginesupplier, Rolls-Royce, an option to acquire one of Goodrich's R&D projects.

In Universal/ EMI, the remedies entailed a significant structural part through thedivestment by Universal of iconic artists, labels and local EMI entities. Thebehavioural aspects of the commitments related to the removal of Most FavouredNation clauses as a complement to the main structural remedies. This behaviouralcommitment will allow competitors to negotiate more freely with digital customersand ensure a level-playing field. We considered this effective as the ban of MostFavoured Nation clauses was straight-forward and could be easily monitored, inparticular by other market players.

In Glencore/Xstrata, we accepted the termination of a long-term exclusive off-takeagreement that Glencore held with the largest zinc smelter in Europe, which had ade-facto structural impact on the market. This contract termination ensures thatcompetition in the European zinc metal market is preserved.

These examples demonstrate the Commission's proportionate approach when faced withmergers raising serious competition concerns. Even such mergers can be cleared if partiesoffer adequate remedies. In all these cases, the remedies effectively removed our concernsand also entailed proportionate commitments from the companies.

In antitrust too, structural remedies have increased because they are simpler and easier toimplement, and our merger experience inspired us in this sense.

Once the mandated divestiture has taken place, the change in the market structure will solvethe antitrust concerns if behavioural commitments cannot do the job. There will be virtuallyno way to circumvent the remedy or alter its effectiveness.

Many cases have dealt with major structural problems calling for structural solutions. Typicalexamples are the ENI and RWE cases. We had concerns that the vertically integrated gasincumbents had foreclosed the downstream supply markets by refusing indispensable accessto transmission capacity. The abusive conduct stemmed from the very structure of theundertakings: the concern was that they were favouring the interests of their group andleveraging their control of the network to maintain their dominance downstream.

We made the structural remedies binding because in our view only structural remediescould effectively address our concerns. RWE divested its transmission grid and ENI its sharein certain international pipelines. This ensured that the abuse could never be repeated andcreated the conditions for undistorted competition downstream.

Here the lessons learnt from merger divestitures also served us well.



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The remedies contributed to effectively opening-up energy markets to competition inaddition to the regulatory provisions fostering liberalisation.

Let me turn to behavioural remedies.

B. Behavioural remedies

In mergers , non-divestiture remedies are to be assessed on a case-by-case basis. They can bedifficult to monitor and there are risks related to their effectiveness post-merger.

For example, the use of price caps involves a heavy degree of market intervention which weregard as generally outside the mission of a competition authority. We have also found thatfirewalls are virtually impossible to monitor.

Commitments relating to the future behaviour of the merged entity are thus only acceptableif their workability is fully ensured by effective implementation and if they do not causedistortive effects.

And we normally do not endorse behavioural commitments if they are just a “declaration ofintent” from parties not to abuse their market power.

This is why the Commission has rather limited merger experience in this regard.

In antitrust too, we tend to only accept behavioural remedies when they bring about apositive change on the market, recognising that behavioural remedies may in certaincircumstances be the only solution to effectively remove our concerns.

We've had such examples in the financial sector with the cases concerning Standard & Poor'sand Visa MIFs.

In the Visa MIFs case we accepted commitments that capped interchange feesrelating to debit cards. The commitments increased the transparency of applicableinterchange fees for the participants and users of the Visa card scheme and removedother limitations on merchants.

In the S&P case, we accepted that S&P abolished licensing fees that financialinstitutions had to pay for the mere use of US International Securities IdentificationNumbers (ISINs) in Europe. The fees for the distribution of these numbers were also

reduced.

In both cases, the behavioural commitments tackled overpricing issues and improved theefficiency of the financial markets. Strong behavioural commitments were the only option toaddress our concerns and restore a level-playing field.

Let me now refer to a third type of commitments: access commitments.



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C. Access commitments

Where appropriate, and by virtue of the principle of proportionality, in some cases weconsider merger remedies short of a divestiture. These can be remedies to give access to a

critical technology or infrastructure or to ensure interoperability. Such remedies can lowerentry barriers for new competitors, without requiring more far reaching remedies such asthe complete divestiture of technology or infrastructure.

What is sensitive here is that access terms, in particular access fees, can rarely be defined inadvance; they have to leave room for the particular situation of potential beneficiaries. Inother instances – such as access to technical interfaces - the release of technical informationis critical, so a monitoring mechanism is often required.

In general, access-type remedies need to contain straight-forward obligations that can bemonitored effectively. They should usually provide for a dispute settlement mechanism,

including a fast track arbitration procedure.

Over the last years the Commission has cleared several airline mergers on the basis of slotrelease remedies, a type of access remedy. The legal standard is that such remedies mustlead to actual, sufficient and timely entry of new competitors. Where such conditions werenot met, a prohibition unfortunately remained the only option, such as in Ryanair/Aer Lingusor Olympic/Aegean.

Similar remedies were used in our antitrust practice. For example in the Oneworld case, weendorsed quasi-structural remedies under the form of slot releases at relevant airports.Some slots have been taken-up by competitors, which shows that the remedies wereeffective in opening up the market to competition.

We also accepted similar remedies ensuring interoperability between technologies in bothinstruments.

In Intel/ McAfee, the commitments offered by Intel ensure that vendors of rivalproducts have access to the necessary information to use Intel's processing units andchipsets. These were straight-forward obligations, monitored by a trustee. This wasan effective solution to the problems identified, and we preserved the efficiencies ofthe merger. It is worth mentioning that in this case we drew inspiration from theinteroperability requirements in the Microsoft 2004 antitrust case. This shows thatthe experience we gain with remedies in one area often helps us reach betterremedies in the other instrument.

A comparable example is that of the mobile security joint-venture between ARM,Giesecke & Devrient and Gemalto approved last month in the field of trustedexecution environments for consumer electronics. Our concerns related to ARM'svery strong position upstream as a supplier of intellectual property. We accepted



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commitments similar to those in Intel/McAfee, ensuring the effective access ofcompetitors to interoperability information.

In Cisco/Tandberg we considered however that a structural remedy, in combination

with a behavioural remedy, was needed to ensure interoperability with otherproviders of videoconferencing solutions. The structural aspects included a transferof intellectual property rights to an independent body, as well as the open sourcingof an IT protocol. The behavioural side concerned Cisco's commitment to continue toimplement this protocol and its future versions, as licensed by the independentindustry body. This was important because the availability of the protocol would notbe of use if Cisco did not itself continue using it.

Remedies relating to access have been more frequent in antitrust, with cases also relating tointeroperability - such as the Microsoft 2004 case, or access to transport capacity - EON Gasand GDF. Such remedies may in general be appropriate where the infringement does notderive from the structure of the undertaking but from its conduct on the market.

In the E.ON gas and GDF cases for example, the market foreclosure resulted from thelong term booking of a large share of the transport capacity by the gas incumbents.The commitments entailed the immediate divestiture of significant capacity, as wellas a commitment not to book more than 50% of the long term bookable capacity for15 years. These remedies were proportionate to the concerns identified, and therewas no clear need in these two cases, to go for the full divestiture of transportnetworks. The remedies were effective and allowed third parties the access to thetransport capacity needed to compete downstream.

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I think the numerous examples I have just given you show that there is increasedconvergence between antitrust and mergers in our practice on remedies.

This is true both for the types of remedies and the overarching principles of effectiveness,proportionality and legal certainty that guide us.

Over the last years, this convergence has improved the quality of our remedies, theircapacity to address competition concerns and, in parallel, their workability for companies.

This brings me to the final issue, that of implementation.

3. Implementation and monitoring

The principles of effectiveness and proportionality also underpin our remedy policy in theimplementation and monitoring phase.

In this respect the Remedies Notice has clearly set the ground in mergers and we constantlydraw inspiration from it in our antitrust cases too.





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