The current Treaty establishing the European Community as well as the Treaty on the Functioning of the European Union (following from the Treaty of Lisbon) prohibit restrictions on the movement of capital and on payments between member states as well as between member states and third countries.
***
We move to a Chapter 4 ‘Capital and payments’. Article 63 of the Treaty on the Functioning of the European Union (TFEU), is presented as amended by the intergovernmental conference (IGC 2007) in the Treaty of Lisbon (ToL) and provisionally consolidated by the Council of the European Union (document 6655/08; page 93), with the location of the provision added from the table of equivalences (page 460 to 462):
Part Three ‘Policies and internal actions of the Union’
Title IV TFEU ‘Free movement of persons, services and capital’
Chapter 4 ‘Capital and payments’
Article 63 TFEU
(ex Article 56 TEC)
1. Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited.
2. Within the framework of the provisions set out in this Chapter, all restrictions on payments between Member States and between Member States and third countries shall be prohibited.
***
The IGC 2007 made no specific amendment to Article 56 TEC. Cf. OJ 17.12.2007 C 306/55. The provision is only renumbered.
***
The current key provision on capital and payments, Article 56 TEC, is found in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/63.
***
The European Convention preferred a shorter version of the opening provision of Section 4 ‘Capital and payments’ in the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/34):
SECTION 4
Capital and payments
Article III-45 Draft Constitution
Within the framework of this Section, restrictions both on the movement of capital and on payments between Member States and between Member States and third countries shall be prohibited.
***
The IGC 2004 adopted the wording of the draft in Article III-156 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/66).
***
We see that no substantial change has been adopted during the various stages of the treaty reform process after the Treaty of Nice, but the wording proposed by the European Convention and agreed by the IGC 2004 would arguably have been more elegant.
In this, as in many other cases, the IGC 2007 decided to save ink by preserving the current wording when the reasons for change would have been purely aesthetic.
***
Some suggestions for further reading, first two standard books:
Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law (Oxford University Press, Ninth Edition, 2006), Chapter 16 Free movement of payments and capital (pages 344-354)
Paul Craig and Gráinne de Búrca: EU Law, Text, Cases, and Materials (Oxford University Press, Fourth Edition, 2007), page 723 to 727 in Chapter 20 Free movement of capital and economic and monetary union
Then a few web resources:
The Commission’s introductory web page ‘Free movement of capital’ offers a quick overview and additional links (last updated 30 May 2007):
http://ec.europa.eu/internal_market/capital/index_en.htm
The web page ‘Treaty provisions’ presents the basic rules and further links (last update 27 August 2007):
http://ec.europa.eu/internal_market/capital/framework/treaty_en.htm
The European Parliament fact sheet 3.2.4 ‘Free movement of capital’ is an alternative presentation of the basics (last updated 25 October 2006):
http://www.europarl.europa.eu/facts/3_2_4_en.htm
The Commission’s Scadplus pages offer summaries or links to introductory pages on European Community legislation. In this case the starting point could be the web page ‘Single market for capital’ with more than thirty links on different aspects (no date):
http://europa.eu/scadplus/leg/en/s70001.htm
EU Law Blog has three posts on recent ECJ cases archived under ‘Capital: Free movement’:
http://eulaw.typepad.com/eulawblog/free_movement_of_capital/index.html
An example of the Court of Justice’s reasoning about the relationship between the provision of services and free movement of capital is Case C-452/04:
http://curia.europa.eu/jurisp/cgi-bin/gettext.pl?where=&lang=en&num=79938996C19040452&doc=T&ouvert=T&seance=ARRET
Ralf Grahn
Showing posts with label restrictions. Show all posts
Showing posts with label restrictions. Show all posts
Friday, 18 April 2008
Wednesday, 16 April 2008
EU TFEU: Remaining restrictions on services
In many cases the Treaty of Lisbon does little else than renumbering existing treaty provisions for coming consolidated versions of the revised Treaty on European Union and the renamed Treaty on the Functioning of the European Union.
***
The Treaty of Lisbon (ToL) presents no specific amendments concerning Article 54 of the Treaty establishing the European Community (TEC). Cf. points 59 and 60 in OJ 17.12.2007 C 306/55.
***
The latest consolidated version of the existing treaties gives us the wording of Article 54 TEC in force (OJ 29.12.2006 C 321 E/63):
Article 54 TEC
As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 49.
***
There seem to be no horizontal amendments, but the renumbering of the provision has to be checked, and we add the location of the Article within the Treaty on the Functioning of the European Union (TFEU):
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV TFEU) ‘Free movement of persons, services and capital’
Chapter 3 ‘Services’
Article 54 TFEU (ToL), renumbered Article 61 TFEU
As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 49 [ToL, renumbered Article 56 TFEU].
***
Article III-34 of the draft Treaty establishing a Constitution for Europe added an ‘of’, and the referral was different, but otherwise it was a clone of the current TEC Article (OJ 18.7.2003 C 169/33).
***
In Article III-149 of the Treaty establishing a Constitution for Europe ‘each Member State’ became ‘the Member States’ but the IGC 2004 accepted the ‘of’ added by the European Convention before ‘residence’. Naturally, the referral was different.
***
We can conclude that, from the TEC to the Lisbon Treaty, no substantial change has been proposed to the provision.
***
We see that restrictions on grounds of nationality or of residence are forbidden, which narrows the scope of legitimate remaining restrictions considerably. In addition, new restrictions would seem to go against the aim to achieve free movement of services.
The ‘sunset feeling’ evoked by Article 54 TEC has not inspired writers unduly, which a quick look at a number of textbooks validated. Müller-Graff explains why, in Streinz, EUV/EGV Vertrag über die Europäische Union und Vertrag zur Gründung der Europäischen Gemeinschaft (Verlag C.H.Beck, München 2003; page 742):
„Sein Regelungsgehalt wird von Art. 49 EGV mitumfasst, so dass er gestrichen werden könnte.“
In other words, Article 54 ToL (and 61 TFEU) is redundant, due to Article 49 TEC (and ToL, renumbered Article 56 TFEU).
This serves as a reminder, if one is needed, of how focused on institutional questions the later cycles of treaty reform have been and of how technical most of the modifications of the ‘Community’ policy areas have been, or to use the term preferred for the future ‘policies and internal actions of the Union’.
Ralf Grahn
***
The Treaty of Lisbon (ToL) presents no specific amendments concerning Article 54 of the Treaty establishing the European Community (TEC). Cf. points 59 and 60 in OJ 17.12.2007 C 306/55.
***
The latest consolidated version of the existing treaties gives us the wording of Article 54 TEC in force (OJ 29.12.2006 C 321 E/63):
Article 54 TEC
As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 49.
***
There seem to be no horizontal amendments, but the renumbering of the provision has to be checked, and we add the location of the Article within the Treaty on the Functioning of the European Union (TFEU):
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV TFEU) ‘Free movement of persons, services and capital’
Chapter 3 ‘Services’
Article 54 TFEU (ToL), renumbered Article 61 TFEU
As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 49 [ToL, renumbered Article 56 TFEU].
***
Article III-34 of the draft Treaty establishing a Constitution for Europe added an ‘of’, and the referral was different, but otherwise it was a clone of the current TEC Article (OJ 18.7.2003 C 169/33).
***
In Article III-149 of the Treaty establishing a Constitution for Europe ‘each Member State’ became ‘the Member States’ but the IGC 2004 accepted the ‘of’ added by the European Convention before ‘residence’. Naturally, the referral was different.
***
We can conclude that, from the TEC to the Lisbon Treaty, no substantial change has been proposed to the provision.
***
We see that restrictions on grounds of nationality or of residence are forbidden, which narrows the scope of legitimate remaining restrictions considerably. In addition, new restrictions would seem to go against the aim to achieve free movement of services.
The ‘sunset feeling’ evoked by Article 54 TEC has not inspired writers unduly, which a quick look at a number of textbooks validated. Müller-Graff explains why, in Streinz, EUV/EGV Vertrag über die Europäische Union und Vertrag zur Gründung der Europäischen Gemeinschaft (Verlag C.H.Beck, München 2003; page 742):
„Sein Regelungsgehalt wird von Art. 49 EGV mitumfasst, so dass er gestrichen werden könnte.“
In other words, Article 54 ToL (and 61 TFEU) is redundant, due to Article 49 TEC (and ToL, renumbered Article 56 TFEU).
This serves as a reminder, if one is needed, of how focused on institutional questions the later cycles of treaty reform have been and of how technical most of the modifications of the ‘Community’ policy areas have been, or to use the term preferred for the future ‘policies and internal actions of the Union’.
Ralf Grahn
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