Free movement of Goods, Persons, Services and Capital in the E U

Free movement of Goods, Persons, Services and Capital in the EU Prof.dr.sc. Hana Horak EuropeanMarketLaw BDIB

Free movement provisions in EU Law • application of Community free movement provisions to national measures that may seekto hinder the exercise of such rights • ECJ (European Court of Justice) in relation to theachievement of free movement rights in the context of goods, persons, servicesand capital

the ECJ is the arbiter ofthe application of free movement rights with respect to the migrant, be it in the context ofgoods, persons, services or capital • an assessment of the concept of non‐discrimination on nationality grounds

Art 18 TFEU (ex Art. 12 TEC) “Within the scope of application of thisTreaty…any discrimination on grounds of nationality shall be prohibited” – generalprohibition; it applies unlessdiscrimination is prohibited in specific circumstances by the Treaty • requirement for perfect equality of treatment in Member States…in a situation governed by Community law and nationals of the Member State.

“Discrimination” denotes less favourable treatment of the imported good, service, capital or person • Community national by comparison to that given to the domestic good and to the hostnational

The prohibition encompasses both direct and indirect discrimination • Example: Case 2/74 Jean Reyners v.Belgian State, 1974, ECR 631 -Belgian law permitted only the host national tobecome lawyers.Where the measure appears to be nationality‐neutral, thediscrimination is indirect if the national measure is intrinsically liable to have a greatereffect on the migrant national in comparison to the host national.

Goods Article 28 (ex Article 23 TEC) “1. The Union shall comprise a customs union which shall cover all trade in goods and which shallinvolve the prohibition between Member States of customs duties on imports and exports and of allcharges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.”

Article 30 (ex Article 25 TEC) “Customs duties on imports and exports and charges having equivalent effect shall be prohibitedbetween Member States. This prohibition shall also apply to customs duties of a fiscal nature.”

Article 34 (ex Article 28 TEC) “Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.” Article 35 (ex Article 29 TEC) “Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.”

Direct discrimination means the imported good has received different and usually lessfavorable treatment by comparison with the treatment which the domestic good has received • Example: Case 34/79, Regina v. Maurice Donald Henn and John Frederick Ernest Darby, 1979, ECR 3795 - discriminatory national laws resulted directly in a total prohibition with respect to the imported good.

instances of direct discrimination have, for example, resulted in thedesignation: • of “measures having equivalent effect to quantitative restrictions” (Art. 34 TFEU), • phytosanitary inspections imposed by Germany only on imported apples (Case 4/75, Rewe‐Zentralfinanz eGmbH v.Landwirtschaftskammer, 1975, ECR843) • nationalmeasure relating to the purity of beer (Case 178/84, Commission of the European Communities v. Federal Republic of Germany, 1987, ECR1-227)

the imposition of a minimum price for fuel whichresulted in the import being unable to benefit from lower cost prices in the country oforigin (Case 231/83, Henri Cullet and Chambre syndicale des reparateurs automobiles et detaillants de produitspetroliers v. Centre Leclerc a Toulouse and Centre Leclerc a Saint‐Orens‐de‐Gameville, 1985, ECR305) • an Irish law which required petrol importers to buy 35 per cent of theirrequirements from the state‐owned old refinery at a centrally fixed price (Case 72/83, Campus Oil Limited and others v. Minister for Industry and Energy and others, 1984 ECR 2727) • a Swedishlaw prohibiting private individuals from importing alcoholic beverages (Case C‐170/04, Klas Rosengren and others v. Riksĺklagaren, 2007, ECR I‐4071)

“The national measure will be held to be indirectly discriminatory where trade rules, notthemselves discriminatory as to product origin, impose a greater impact on the importedgood. “ (Art. 34 TFEU) • TheDassonville definition of the “measure having equivalent effect” clearly contemplatesthis (Case 8/74, Procureur du Roi v. Benoit and Gustave Dassonville, 1974 E.C.R. 837)

Such was confirmed by Case 120/78 Rewe‐Zentral A.G. v. Bundesmonopolverwaltung furBranntwein, 1979, ECR 649(Cassis de Dijon)where German trade rules relating tominimum alcoholiccontent levels constituted an obstacle to the free movement of cassis between France andGermany • The national rules were effective to bar French cassis from the Germanmarket

Further examples of indirect discrimination include the Case 249/81 Commission of the EuropeanCommunities v. Ireland, 1982, ECR4005,in which the Irish Goods Council promoted Irish goods to thedetriment of the imported product, and • Case 207/83 Commission of the EuropeanCommunities v. United Kingdom of Great Britain andNorthern Ireland,1985, ECR1201,where national rules relating todesignation of origins were held unlawful

Workers Article 45(ex Article 39 TEC) “1. Freedom of movement for workers shall be secured within the Union. 2. Such freedom of movement shall entail the abolition of any discrimination based on nationalitybetween workers of the Member States as regards employment, remuneration and other conditions ofwork and employment.”

In relation to the worker, examples include the precondition of French nationality forpermanent employment of public sector nurses (Case 307/84, Commission of the European Communities v. French Republic,1986, ECR I-725) based on the application of Art 45 (2) TFEU wherein the conditions of work and employment favored Italianresearchers (Case 225/85, Commission of the European Communities v. Italian Republic, 1987 ECR2625) and where the German foreign ministry distinguished between local staffhaving German nationality and those who did not(Case C‐214/94, Ingrid Boukhalfa v. Bundesrepublic Deutschland, 1996, ECR I‐2253)

In relation to rights of establishmentfor example, a French measure required doctors established in other Member States tocancel their registration in that state as a precondition to practicing in France (Case 96/85, Commission of the European Communities v. French Republic, 1986, ECR 1-475)

In Case 79/85 D. H. M.Segers v. Bestuur van de Bedrijfsvereniging voor Bank‐ en Verzekeringswezen, Groothandelen Vrije Beroepen, 1986,ECR2375) the host national was favored in respect of admission to national sickness insurance benefits ‐ the discrimination in the Dutch law based on the location ofthe registered office

in relation to the right to provide services, a residence requirement imposed byHolland in the context ofundertaking a professional activity made it “impossible forpersons residing in another member State to provide services.” (Case 39/75, Robert‐GerardusCoenen and others v. Sociaal‐EconomischeRaad, 1975 ECR1547) • The same situationwasinCase C‐294/89, Commission of the European Communities v. French Republic, 1991, E.C.R. I‐3591where the national law required the migrant lawyer providing services to work with a French lawyer and in • CaseC‐353/89, Commission of the European Communities v. Kingdom of the Netherlands, 1991 E.C.R. I‐4069, an obligation imposed on national broadcasting bodies established in the Netherlands to have all or some oftheir programmes made by a Dutch undertaking was directly discriminatory.

With respect to the free movement of persons, much jurisprudence exists which has beenfounded on the application of the principle of discrimination, which is indirect in nature. • With regard to the worker, for example, the imposition of a time limit on the duration ofthe employment relationship between universities and foreign language assistants washeld to be indirectly discriminatory (Case 33/88 Pilar Allue and Carmel Mary Coonan v. Universita degli studi di Venezia, 1989 E.C.R. 1591)

Other examples relate to Case C‐272/92 Maria Chiara Spotti v. Freistaat Bayern, 1993 E.C.R. I‐5185, where the awarding of fixed term contracts in respect of language posts filled mainly by foreign‐assistants and • Case 16/78 Criminal proceedings against Michel Choquet, 1978 E.C.R. 2293, where an insistence that themigrant worker obtain a fresh driving license, thereby duplicating one held in the home state, could haveindirectly prejudiced exercise of free movement rights.

Case C‐90/96, David Petrie and Others v. Universita degli studi di Verona and Camilla Bettoni, 1997, ECR I‐6527, an Italian law regarding employment of temporaryteachers acted to the detriment of the migrant national • Case C‐221/89, The Queen v. Secretary of State for Transport ex parte Factortame and Others,1991 E.C.R.‐3905, in relation to the right ofestablishment, the United Kingdom stipulated the possession of UK nationality asprecondition for ship ownership

In relation to the right to provide services, a Belgian rule for example was held unlawful where it provided that fee charging employment agenciesshould be subject to the grant of a license ( Joined cases 110 & 111/78, Ministere public and ‘Chambre syndicale des agents artistiques et impresarii deBelgique’ ASBL v. Willy van Wesemael and others, 1970)

in Case C‐451/03 Servizi Ausiliari DottoriCommercialisti Srl v. Calafiori, 2005 E.C.R. I‐3875, an Italian law providing that tax assistance was to beexclusively given by authorized Italian tax advice centers financed by Italy was heldindirectly discriminatory

The concept of ‘indirect’ discrimination has been deemed by the Court to embrace theimposition of dual burden rules on the migrant national. • Examples of such rules include therequirement to hold particular qualifications (Case C‐340/89, Irene Vlassopoulou v. Ministerium für Justiz, Bundes‐ und Europaangelegenheiten Baden‐Württemberg, 1991 ECR1‐2357) or licenses(Case 292/86, Claude Gullung v. Conseil de l”ordre des avocats du barreau de Colmar et de Saverne, 1988 ECR111)

In such instances, the migrantsatisfies two different sets of rules (those of the home and host states); • the host Nationalby comparison satisfies only one set of rules; those of the host state. The resultant ‘dualburden’ placed on the migrant has occasionally been referred to by • the Court as an“indistinctly applicable measure.” (Case 143/87, Christopher Stanton and SA belge d”assurances "L’Étoile 1905" v. Institut national d”assurancessociales pour travailleurs indépendants (Inasti), 1988 E.C.R. 3877)

a broad definition of theconcept of ’indirect’ discrimination. The concept embraces instances where the nationalmeasure “is intrinsically liable to affect migrant workers more than national workers and ifthere is a consequent risk that it will place the former at a particular disadvantage (Case C‐237/94, John O’Flynn v. Adjudication Officer, 1996 E.C.R. I‐2617)

Capital Article 63 TFEU (ex Article 56 TEC) “Within the framework of the provisions set out in this Chapter, all restrictions on themovement of capital between Member States and between Member States and third countries shall beprohibited.”

Direct and indirect discrimination have been prohibited. • In Case C‐302/97, Klaus Konle v. Republik Österreich,1999 E.C.R.I‐3099, the Austrian law which exempted the host national from the requirements of authorization pre‐land acquisition was held directly discriminatory to migrant nationals inrespect of capital movements between Member States • In Case C‐423/98, Alfredo Albore, 2000 E.C.R. I‐05965 therequirement placed on solely the migrant national of prior authorization with respect tothe purchase of property in areas of military importance was similarly held unlawful • InC‐512/03, Blanckaert v. Inspecteur van de Belastingdienst/Particulieren/Ondernemingen buitenland te Heerle,2005 E.C.R. I‐07685 it was noted that “Less favorable tax treatment fornon‐residents only mightdeter the latter from investing in property in the Netherlands.”

Free movement of Goods, Persons, Services and Capital in the E U