The Lisbon Treaty improves the presentation of the European Union’s (European Community’s) powers to conclude international agreements (treaties), but first we take a look at the existing treaties.
***
Current treaties
Community pillar
The current divide between the European Community, with legal personality (Article 281 TEC), and the European Union, without, complicates the conclusion of international agreements and it is reflected in the existing main treaty provisions. (Cf. the latest consolidated version of the treaties, published OJEU 29.12.2006 C 321 E.)
Article 300 of the Treaty establishing the European Community (TEC) does not present a comprehensive view of the treaty making powers of the EC, but refers generally to the situations “Where this Treaty provides for the conclusion of agreements between the Community and one or more States or international organisations, …”. It then sets out the procedures for concluding treaties.
In addition, there are agreements with a more general scope and provisions related to a specific policy area or even a determined issue:
Article 310 TEC provides for the conclusion of association agreements with states or international organisations.
In the area of the common commercial policy (including customs tariffs and trade), the European Community exercises exclusive competence, with Article 133 TEC providing for international agreements to be concluded.
Article 111 TEC concerns the conclusion of formal agreements on an exchange-rate system for the ecu (nowadays euro) in relation to non-Community currencies.
Article 174 TEC concerns international agreements in the environmental area.
International agreements in the area of development cooperation are provided for by Article 180 TEC.
Agreements within the sphere of economic, financial and technical cooperation with third countries or international organisations are foreseen by Article 181a TEC, which also mentions the association agreements and the agreements to be concluded with membership candidates.
The flexibility clause Article 308 TEC has been used to fill voids.
***
Second and third pillar
Article 24 of the Treaty on European Union (TEU) refers to the procedure to conclude international agreements in implementation of the common foreign and security policy (CFSP; Title V) and police and judicial cooperation in criminal matters (Title VI; also Article 38 TEU).
***
Accession agreements
Accession treaties are an example of intergovernmental agreements, concluded between the acceding state and the existing member states (Article 50 TEU).
***
The current patchwork of treaty provisions is in need of clarification and reform. Operating on the international scene is complicated by the EC and EU split. The limits of EC and member state powers are far from clear in the light of the treaties.
It has fallen on the ECJ to give set out the respective external competences.
Ralf Grahn
Showing posts with label ECJ. Show all posts
Showing posts with label ECJ. Show all posts
Friday, 6 February 2009
Friday, 26 December 2008
EU procurement: Equal treatment, non-discrimination and transparency
Cavalier or corrupt contracting authorities are a menace to the public purse, taxpayer value and competitive businesses.
Is the European Community (European Union) concerned with public procurement only above certain threshold levels?
For those interested in good public governance and value for money, it is a relief to know that some common principles apply to all public contracts within the European Economic Area (EEA).
***
Article 2 principles
Article 2 of the Procurement Directive 2004/18/EC reminds us of three principles, which apply to public procurement, namely equal treatment, non-discrimination and transparency:
Article 2
Principles of awarding contracts
Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.
***
Recital 2
Recital 2 of the Procurement Directive 2004/18/EC, also known as the Classic Directive, explains that the provisions of the Treaty establishing the European Community (TEC) apply to all public procurement contracts. However, above certain threshold levels more detailed harmonised EC (EU) secondary legislation kicks in:
(2) The award of contracts concluded in the Member States on behalf of the State, regional or local authorities and other bodies governed by public law entities, is subject to the respect of the principles of the Treaty and in particular to the principle of freedom of movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and to the principles deriving therefrom, such as the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency. However, for public contracts above a certain value, it is advisable to draw up provisions of Community coordination of national procedures for the award of such contracts which are based on these principles so as to ensure the effects of them and to guarantee the opening-up of public procurement to competition. These coordinating provisions should therefore be interpreted in accordance with both the aforementioned rules and principles and other rules of the Treaty.
***
Treaty provisions
Here we look briefly at some of the main treaty provisions, which apply to public procurement contracts. (More detail can be found, in the light of the Lisbon Treaty, in previous blog posts on individual Articles.)
***
Article 2 TEC Common market
Article 2 of the Treaty establishing the European Community (TEC) states:
The Community shall have as its task, by establishing a common market…
The common market is the original concept enshrined in the Treaty of Rome (EEC Treaty). Since the Single European Act (SEA) it has gradually been replaced by the term internal market in the treaty and secondary legislation. (The Commission seems to favour the single market.) The Treaty of Lisbon would replace the common market by the internal market throughout.
***
Article 3 TEC Community activities
Article 3 TEC sets out Community activities based on the objectives (tasks) mentioned in the previous Article. At least the following are relevant to the common market (internal market) and consequently to public procurement:
Article 3 TEC (parts)
1. For the purposes set out in Article 2, the activities of the Community shall include, as provided in this Treaty and in accordance with the timetable set out therein:
(a) the prohibition, as between Member States, of customs duties and quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect;
(b) a common commercial policy;
(c) an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital;
(d) measures concerning the entry and movement of persons as provided for in Title IV;
-----
(g) a system ensuring that competition in the internal market is not distorted;
(h) the approximation of the laws of Member States to the extent required for the functioning of the common market;
-----
***
Four freedoms
The four market freedoms – free movement of goods, persons, services and capital – meet the material scope of the Procurement Directive, which concerns the execution of works (buildings and civil engineering works), the supply of products (goods) and the provision of services.
The ECJ has given the fundamental treaty principles concrete meaning based on the specific treaty provisions.
***
Free movement of goods
TEC Articles 23 to 31 contain the main principles regarding the free movement of goods.
Article 28 TEC prohibits all restrictions on imports an all measures having equivalent effect between member states.
***
Free movement of services
The free movement of services is set out in Articles 49 to 55 TEC.
Article 49 TEC prohibits restrictions on the freedom to provide services in another member state.
***
Right of establishment
Restrictions on the freedom of establishment of nationals of a member state in another member state are prohibited according to Article 43 TEC (to Article 48 TEC).
***
Free movement for workers
Articles 39 to 42 TEC aim at securing the free movement for workers within the Community.
***
Non-discrimination
The four freedoms can be seen as expressions of a principle of equal treatment of all economic actors and persons within the internal market.
Equality comprises both (active) equal treatment and (passive) absence of discrimination.
Normally, acts in breach of the specific market freedoms also constitute discrimination on grounds of nationality, but in any case the fundamental prohibition against discrimination on grounds of nationality stands as a reminder to contracting authorities and as an anchor for economic operators from other member states:
Article 12 TEC
Within the scope of application of this Treaty, and without prejudice to any special provisions
contained therein, any discrimination on grounds of nationality shall be prohibited.
The Council, acting in accordance with the procedure referred to in Article 251, may adopt rules
designed to prohibit such discrimination.
***
Interpretative Communication
If a public contract falls within the scope of the Procurement Directive 2004/18/EC, the detailed rules apply to the award procedure above the thresholds.
The Commission has offered guidance on public procurement procedures in cases where the specific rules of the Directives do not apply:
Commission Interpretative Communication on the Community law applicable to contract awards not or not fully subject to the provisions of the Public Procurement Directives (OJ 1.8.2006 C 179/2).
The Interpretative Communication refers to the EU-wide competitive tendering procedures set up in the Procurement Directive 2004/18/EC and the Utilities Directive 2004/17/EC, but refers to two kinds of contracts that are not or only partially covered by the Directives:
— Contracts below the thresholds for application of the Public Procurement Directives;
— Contracts for services listed in Annex II B to Directive 2004/18/EC and in Annex XVII B to Directive 2004/17/EC that exceed the thresholds for application of these Directives.
(Concessions are a third such category, mentioned in footnote 3 on the first page.)
***
Obligation of transparency
After summarizing the EC Treaty rules and the basic standards for the award of contracts, the Communication reminds the contracting entities (authorities) of the obligation to evaluate if an intended contract might potentially be of interest to economic operators located in other member states.
The Commission proceeds to deal with adequate advertising:
According to the ECJ, the principles of equal treatment and of non-discrimination imply an obligation of transparency which consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the market to be opened up to competition.
The obligation of transparency requires that an undertaking located in another Member State has access to appropriate information regarding the contract before it is awarded, so that, if it so wishes, it would be in a position to express its interest in obtaining that contract.
Ralf Grahn
Is the European Community (European Union) concerned with public procurement only above certain threshold levels?
For those interested in good public governance and value for money, it is a relief to know that some common principles apply to all public contracts within the European Economic Area (EEA).
***
Article 2 principles
Article 2 of the Procurement Directive 2004/18/EC reminds us of three principles, which apply to public procurement, namely equal treatment, non-discrimination and transparency:
Article 2
Principles of awarding contracts
Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.
***
Recital 2
Recital 2 of the Procurement Directive 2004/18/EC, also known as the Classic Directive, explains that the provisions of the Treaty establishing the European Community (TEC) apply to all public procurement contracts. However, above certain threshold levels more detailed harmonised EC (EU) secondary legislation kicks in:
(2) The award of contracts concluded in the Member States on behalf of the State, regional or local authorities and other bodies governed by public law entities, is subject to the respect of the principles of the Treaty and in particular to the principle of freedom of movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and to the principles deriving therefrom, such as the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency. However, for public contracts above a certain value, it is advisable to draw up provisions of Community coordination of national procedures for the award of such contracts which are based on these principles so as to ensure the effects of them and to guarantee the opening-up of public procurement to competition. These coordinating provisions should therefore be interpreted in accordance with both the aforementioned rules and principles and other rules of the Treaty.
***
Treaty provisions
Here we look briefly at some of the main treaty provisions, which apply to public procurement contracts. (More detail can be found, in the light of the Lisbon Treaty, in previous blog posts on individual Articles.)
***
Article 2 TEC Common market
Article 2 of the Treaty establishing the European Community (TEC) states:
The Community shall have as its task, by establishing a common market…
The common market is the original concept enshrined in the Treaty of Rome (EEC Treaty). Since the Single European Act (SEA) it has gradually been replaced by the term internal market in the treaty and secondary legislation. (The Commission seems to favour the single market.) The Treaty of Lisbon would replace the common market by the internal market throughout.
***
Article 3 TEC Community activities
Article 3 TEC sets out Community activities based on the objectives (tasks) mentioned in the previous Article. At least the following are relevant to the common market (internal market) and consequently to public procurement:
Article 3 TEC (parts)
1. For the purposes set out in Article 2, the activities of the Community shall include, as provided in this Treaty and in accordance with the timetable set out therein:
(a) the prohibition, as between Member States, of customs duties and quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect;
(b) a common commercial policy;
(c) an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital;
(d) measures concerning the entry and movement of persons as provided for in Title IV;
-----
(g) a system ensuring that competition in the internal market is not distorted;
(h) the approximation of the laws of Member States to the extent required for the functioning of the common market;
-----
***
Four freedoms
The four market freedoms – free movement of goods, persons, services and capital – meet the material scope of the Procurement Directive, which concerns the execution of works (buildings and civil engineering works), the supply of products (goods) and the provision of services.
The ECJ has given the fundamental treaty principles concrete meaning based on the specific treaty provisions.
***
Free movement of goods
TEC Articles 23 to 31 contain the main principles regarding the free movement of goods.
Article 28 TEC prohibits all restrictions on imports an all measures having equivalent effect between member states.
***
Free movement of services
The free movement of services is set out in Articles 49 to 55 TEC.
Article 49 TEC prohibits restrictions on the freedom to provide services in another member state.
***
Right of establishment
Restrictions on the freedom of establishment of nationals of a member state in another member state are prohibited according to Article 43 TEC (to Article 48 TEC).
***
Free movement for workers
Articles 39 to 42 TEC aim at securing the free movement for workers within the Community.
***
Non-discrimination
The four freedoms can be seen as expressions of a principle of equal treatment of all economic actors and persons within the internal market.
Equality comprises both (active) equal treatment and (passive) absence of discrimination.
Normally, acts in breach of the specific market freedoms also constitute discrimination on grounds of nationality, but in any case the fundamental prohibition against discrimination on grounds of nationality stands as a reminder to contracting authorities and as an anchor for economic operators from other member states:
Article 12 TEC
Within the scope of application of this Treaty, and without prejudice to any special provisions
contained therein, any discrimination on grounds of nationality shall be prohibited.
The Council, acting in accordance with the procedure referred to in Article 251, may adopt rules
designed to prohibit such discrimination.
***
Interpretative Communication
If a public contract falls within the scope of the Procurement Directive 2004/18/EC, the detailed rules apply to the award procedure above the thresholds.
The Commission has offered guidance on public procurement procedures in cases where the specific rules of the Directives do not apply:
Commission Interpretative Communication on the Community law applicable to contract awards not or not fully subject to the provisions of the Public Procurement Directives (OJ 1.8.2006 C 179/2).
The Interpretative Communication refers to the EU-wide competitive tendering procedures set up in the Procurement Directive 2004/18/EC and the Utilities Directive 2004/17/EC, but refers to two kinds of contracts that are not or only partially covered by the Directives:
— Contracts below the thresholds for application of the Public Procurement Directives;
— Contracts for services listed in Annex II B to Directive 2004/18/EC and in Annex XVII B to Directive 2004/17/EC that exceed the thresholds for application of these Directives.
(Concessions are a third such category, mentioned in footnote 3 on the first page.)
***
Obligation of transparency
After summarizing the EC Treaty rules and the basic standards for the award of contracts, the Communication reminds the contracting entities (authorities) of the obligation to evaluate if an intended contract might potentially be of interest to economic operators located in other member states.
The Commission proceeds to deal with adequate advertising:
According to the ECJ, the principles of equal treatment and of non-discrimination imply an obligation of transparency which consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the market to be opened up to competition.
The obligation of transparency requires that an undertaking located in another Member State has access to appropriate information regarding the contract before it is awarded, so that, if it so wishes, it would be in a position to express its interest in obtaining that contract.
Ralf Grahn
Tuesday, 7 October 2008
EU: Excessive government deficits Ig
At the intergovernmental level, under the ‘old’ Stability and Growth Pact, the failure of France and Germany to avoid excessive budget deficits and the inability of the Council to decide on effective recommendations, in the first case where sanctions should have been meted out, brought the Stability and Growth Pact into disrepute and led to the subsequent court case launched by the Commission.
***
ECJ
The European Court of Justice was called upon to resolve questions relating to the excessive deficit procedure under the ‘old’ Stability and Growth Pact in case C-27/04, when the Council had left the procedure against France and Germany in abeyance.
The 13 July 2004 judgment of the ECJ in Commission / Council concerning annulment of measures of the Council 15 November 2003, was the following:
1. Declares the action of the Commission of the European Communities inadmissible in so far as it seeks annulment of the failure of the Council of the European Union to adopt the formal instruments contained in the Commission’s recommendations pursuant to Article 104(8) and (9) EC;
2. Annuls the Council’s conclusions of 25 November 2003 adopted in respect of the French Republic and the Federal Republic of Germany respectively, in so far as they contain a decision to hold the excessive deficit procedure in abeyance and a decision modifying the recommendations previously adopted by the Council under Article 104(7) EC;
See :
http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=en&Submit=Rechercher&alldocs=alldocs&docj=docj&docop=docop&docor=docor&docjo=docjo&numaff=C-27/04 &datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100
***
C-27/04 analysis
Barbara Dutzler and Angelika Hable, in ‘The European Court of Justice and the Stability Pact ─ Just the Beginning?’ (European Integration online Papers, EIoP, Vol. 9 (2005) No. 5, 1 March 2005), presented the excessive deficit procedure step by step, as applied to Germany and France, as well as a detailed analysis of the ECJ judgment:
http://eiop.or.at/eiop/pdf/2005-005.pdf
***
New Stability and Growth Pact analysis
Franz-Christoph Zeitler, member of the executive board of the Deutxche Bundesbank ‘What remains of the Stability and Growth Pact?’ (26 August 2005) assessed the ‘new’ Stability and Growth Pact, saying that overall the fiscal rules have been significantly weakened. By contrast, the challenges facing a stability-oriented fiscal policy in terms of public acceptance have grown considerably:
http://www.bundesbank.de/download/presse/reden/2005/20050826zeitler_en.pdf
According to Zeitler:
“The problems and weaknesses of the old pact were not due to it being too rigid. On the contrary, they lay in the weakness of the political decision-making process for the incentives and sanctions system and in a preventive effect which was too modest.”
***
Excessive deficit procedures: current and closed
The European Commission, Economic and Financial Affairs, offers information on the Stability and Growth Pact with a page on ongoing and closed excessive deficit procedures concerning specific countries:
http://ec.europa.eu/economy_finance/sg_pact_fiscal_policy/excessive_deficit9109_en.htm
***
This glimpse at the existing (‘new’) Stability and Growth Pact, including the excessive deficit procedure, has not resulted in conclusive evidence of the margins of appreciation or the limits of Council discretion concerning small, exceptional and temporary excesses above the reference value of 3 % of GDP, in a situation where fiscal restraint seems to be heading for abandonment (suspension) following the financial turmoil and weakening real economy in Europe.
Even under exceptional circumstances, extraordinary budgetary excesses would presumably have to meet the tests of necessity and proportionality.
Readers with knowledge and views are invited to comment.
Ralf Grahn
***
ECJ
The European Court of Justice was called upon to resolve questions relating to the excessive deficit procedure under the ‘old’ Stability and Growth Pact in case C-27/04, when the Council had left the procedure against France and Germany in abeyance.
The 13 July 2004 judgment of the ECJ in Commission / Council concerning annulment of measures of the Council 15 November 2003, was the following:
1. Declares the action of the Commission of the European Communities inadmissible in so far as it seeks annulment of the failure of the Council of the European Union to adopt the formal instruments contained in the Commission’s recommendations pursuant to Article 104(8) and (9) EC;
2. Annuls the Council’s conclusions of 25 November 2003 adopted in respect of the French Republic and the Federal Republic of Germany respectively, in so far as they contain a decision to hold the excessive deficit procedure in abeyance and a decision modifying the recommendations previously adopted by the Council under Article 104(7) EC;
See :
http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=en&Submit=Rechercher&alldocs=alldocs&docj=docj&docop=docop&docor=docor&docjo=docjo&numaff=C-27/04 &datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100
***
C-27/04 analysis
Barbara Dutzler and Angelika Hable, in ‘The European Court of Justice and the Stability Pact ─ Just the Beginning?’ (European Integration online Papers, EIoP, Vol. 9 (2005) No. 5, 1 March 2005), presented the excessive deficit procedure step by step, as applied to Germany and France, as well as a detailed analysis of the ECJ judgment:
http://eiop.or.at/eiop/pdf/2005-005.pdf
***
New Stability and Growth Pact analysis
Franz-Christoph Zeitler, member of the executive board of the Deutxche Bundesbank ‘What remains of the Stability and Growth Pact?’ (26 August 2005) assessed the ‘new’ Stability and Growth Pact, saying that overall the fiscal rules have been significantly weakened. By contrast, the challenges facing a stability-oriented fiscal policy in terms of public acceptance have grown considerably:
http://www.bundesbank.de/download/presse/reden/2005/20050826zeitler_en.pdf
According to Zeitler:
“The problems and weaknesses of the old pact were not due to it being too rigid. On the contrary, they lay in the weakness of the political decision-making process for the incentives and sanctions system and in a preventive effect which was too modest.”
***
Excessive deficit procedures: current and closed
The European Commission, Economic and Financial Affairs, offers information on the Stability and Growth Pact with a page on ongoing and closed excessive deficit procedures concerning specific countries:
http://ec.europa.eu/economy_finance/sg_pact_fiscal_policy/excessive_deficit9109_en.htm
***
This glimpse at the existing (‘new’) Stability and Growth Pact, including the excessive deficit procedure, has not resulted in conclusive evidence of the margins of appreciation or the limits of Council discretion concerning small, exceptional and temporary excesses above the reference value of 3 % of GDP, in a situation where fiscal restraint seems to be heading for abandonment (suspension) following the financial turmoil and weakening real economy in Europe.
Even under exceptional circumstances, extraordinary budgetary excesses would presumably have to meet the tests of necessity and proportionality.
Readers with knowledge and views are invited to comment.
Ralf Grahn
Saturday, 12 April 2008
EU TFEU: Scope of services
The European Court of Justice (ECJ) has done much to give meaning to the treaty provisions regarding the right to provide (and to receive) cross-border services within the European Community (European Union).
By preserving the treaty rules, the Treaty of Lisbon upholds the benefits of the internal market to both service providers and receivers of services.
We look at a short reform history of Article 50 of the Treaty establishing the European Community, with examples of services, and we suggest further reading for the ones who want to explore the context.
***
The Treaty of Lisbon (ToL) makes the briefest mention of Article 50 of the Treaty establishing the European Community (TEC). The only express amendment, in OJ 17.12.2007 C 306/55 is the following:
57) In Article 50, third paragraph, the words ‘the State’ shall be replaced by ‘the Member State’.
***
The surrounding provision is found in the latest consolidated version of the treaties, the current TEU and TEC, in the Official Journal (OJ 29.12.2006 C 321 E/62):
Article 50 TEC
Services shall be considered to be ‘services’ within the meaning of this Treaty where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.
‘Services’ shall in particular include:
(a) activities of an industrial character;
(b) activities of a commercial character;
(c) activities of craftsmen;
(d) activities of the professions.
Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals.
***
If the Lisbon Treaty enters into force, the provision should exist in the following context, with the express and horizontal amendments as well as renumbering concerning the Treaty on the Functioning of the European Union (TFEU):
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 3 ‘Services’
Article 50 TFEU (ToL), renumbered Article 57 TFEU
Services shall be considered to be ‘services’ within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.
‘Services’ shall in particular include:
(a) activities of an industrial character;
(b) activities of a commercial character;
(c) activities of craftsmen;
(d) activities of the professions.
Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided, under the same conditions as are imposed by that State on its own nationals.
***
Article III-30 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/33) and Article III-145 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/63) differ so little from the current and future provision that it is there is no need to repeat them here.
***
The UK FCO’s ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command paper 7311) concludes, quite correctly, that Article 57 TFEU (Article 50 ToL) is:
“In substance the same as Article 50 TEC.”
***
Yesterday’s post ‘EU TFEU: Freedom to provide services’ looked at the drafting history of Article 49 TEC and ToL (renumbered Article 56 TFEU) and suggested a number of web resources for further study.
Today, we recommend a book text on the substantive EU law on services:
Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law Ninth Edition (Oxford University Press, 2006), Chapter 22 ‘Freedom to provide services; freedom to receive services’ (page 468 to 493), which describes the evolution of ECJ jurisprudence on services.
With the marginal changes of the Lisbon Treaty (not yet in force) readers can rely on the text concerning the treaty provisions, but since publication the so called Services Directive was finally enacted.
Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJ 27.12.2006 L 376, p. 36–68:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:376:0036:0068:EN:PDF
The Service Directive, addressed to the member states, has entered into force, but they have time until 28 December 2009 to transpose its provisions.
The Service Directive is much less distinguished by the quality of its contents than by the collective sigh of relief generated by the fact that it was enacted at all, having become one of the spectres haunting the French referendum debate on the Constitutional Treaty in 2005.
For the sake of fairness, a more upbeat view is presented by the UK Department for Business, Enterprise and Regulatory Reform (BERR) in its 5 November 2007 consultation paper ‘Implementing the Services Directive, Consultation Document on Implementing the EU Services Directive in the UK’, where Gareth Thomas MP, Parliamentary Under Secretary of State for Trade and Consumer Affairs, said (page 3):
“I believe the Service Directive is a genuinely market-opening measure that will bring real benefits to the UK.”
See:
http://www.berr.gov.uk/files/file42207.pdf
Ralf Grahn
By preserving the treaty rules, the Treaty of Lisbon upholds the benefits of the internal market to both service providers and receivers of services.
We look at a short reform history of Article 50 of the Treaty establishing the European Community, with examples of services, and we suggest further reading for the ones who want to explore the context.
***
The Treaty of Lisbon (ToL) makes the briefest mention of Article 50 of the Treaty establishing the European Community (TEC). The only express amendment, in OJ 17.12.2007 C 306/55 is the following:
57) In Article 50, third paragraph, the words ‘the State’ shall be replaced by ‘the Member State’.
***
The surrounding provision is found in the latest consolidated version of the treaties, the current TEU and TEC, in the Official Journal (OJ 29.12.2006 C 321 E/62):
Article 50 TEC
Services shall be considered to be ‘services’ within the meaning of this Treaty where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.
‘Services’ shall in particular include:
(a) activities of an industrial character;
(b) activities of a commercial character;
(c) activities of craftsmen;
(d) activities of the professions.
Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals.
***
If the Lisbon Treaty enters into force, the provision should exist in the following context, with the express and horizontal amendments as well as renumbering concerning the Treaty on the Functioning of the European Union (TFEU):
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 3 ‘Services’
Article 50 TFEU (ToL), renumbered Article 57 TFEU
Services shall be considered to be ‘services’ within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.
‘Services’ shall in particular include:
(a) activities of an industrial character;
(b) activities of a commercial character;
(c) activities of craftsmen;
(d) activities of the professions.
Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided, under the same conditions as are imposed by that State on its own nationals.
***
Article III-30 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/33) and Article III-145 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/63) differ so little from the current and future provision that it is there is no need to repeat them here.
***
The UK FCO’s ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command paper 7311) concludes, quite correctly, that Article 57 TFEU (Article 50 ToL) is:
“In substance the same as Article 50 TEC.”
***
Yesterday’s post ‘EU TFEU: Freedom to provide services’ looked at the drafting history of Article 49 TEC and ToL (renumbered Article 56 TFEU) and suggested a number of web resources for further study.
Today, we recommend a book text on the substantive EU law on services:
Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law Ninth Edition (Oxford University Press, 2006), Chapter 22 ‘Freedom to provide services; freedom to receive services’ (page 468 to 493), which describes the evolution of ECJ jurisprudence on services.
With the marginal changes of the Lisbon Treaty (not yet in force) readers can rely on the text concerning the treaty provisions, but since publication the so called Services Directive was finally enacted.
Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJ 27.12.2006 L 376, p. 36–68:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:376:0036:0068:EN:PDF
The Service Directive, addressed to the member states, has entered into force, but they have time until 28 December 2009 to transpose its provisions.
The Service Directive is much less distinguished by the quality of its contents than by the collective sigh of relief generated by the fact that it was enacted at all, having become one of the spectres haunting the French referendum debate on the Constitutional Treaty in 2005.
For the sake of fairness, a more upbeat view is presented by the UK Department for Business, Enterprise and Regulatory Reform (BERR) in its 5 November 2007 consultation paper ‘Implementing the Services Directive, Consultation Document on Implementing the EU Services Directive in the UK’, where Gareth Thomas MP, Parliamentary Under Secretary of State for Trade and Consumer Affairs, said (page 3):
“I believe the Service Directive is a genuinely market-opening measure that will bring real benefits to the UK.”
See:
http://www.berr.gov.uk/files/file42207.pdf
Ralf Grahn
Sunday, 6 April 2008
EU TFEU: Freedom of establishment derogation: Exercise of official authority
The freedom of establishment within the European Community (European Union) is not limitless. There are legitimate derogations or exemptions, of which the exercise of official authority is one.
We look at what, if anything, the EU’s Treaty of Lisbon changes compared to the current Treaty establishing the European Community, and if the draft Constitution and the Constitutional Treaty would have made any difference.
A case note offers an example of practical considerations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference briefly mentions Article 45 of the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU). See Official Journal, OJ, 17.12.2007 C 306/54:
53) In Article 45, second paragraph, the words ‘The Council may, acting by a qualified majority on a proposal from the Commission,’ shall be replaced by ‘The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may’.
***
For contents and meaning we turn to the latest consolidated version of the current treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/60:
Article 45 TEC
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The Council may, acting by a qualified majority on a proposal from the Commission, rule that the provisions of this Chapter shall not apply to certain activities.
***
To arrive at a consolidated Lisbon Treaty version of an Article requires that we check if one or more of the following apply: express amendments, horizontal amendments, renumbering of the provision and renumbering of possible referrals.
The location of the Article is thrown in as a matter of reading convenience in a post read in isolation.
Thus, we should end up with the following Article, consolidated according to the Treaty of Lisbon:
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 2 ‘Right of establishment’
Article 45 TFEU (ToL), renumbered Article 51 TFEU
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may rule that the provisions of this Chapter shall not apply to certain activities.
***
Article III-24 of the draft Treaty establishing a Constitution for Europe introduced ‘European laws or framework laws’ (co-decision, ordinary legislative procedure) into the second paragraph, arguably in plainer language (OJ 18.7.2003 C 169/32):
Article III-24 Draft Treaty
This Subsection shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
European laws or framework laws may exempt certain activities from application of this Subsection.
***
Article III-139 of the Treaty establishing a Constitution for Europe replaced the word ‘exempt’ by ‘exclude’, but made no other changes (OJ 16.12.2004 C 310/62).
***
We see that the IGC 2007, by-passing such ‘cosmetic’ changes in such cases, manages to keep the number and volume of Lisbon Treaty amendments down, by reverting to the TEC text.
***
Suitable further reading is offered by Peer Zumbansen in a note on the case C-283/99 ‘No Need To Be Italian: ECJ Hands Down Third Case Related To Nationality Requirements For Private Security Guards’, published in the German Law Journal Vol. 2 No. 10 – 15 June 2001, and available on the web:
http://www.germanlawjournal.com/print.php?id=29
Freedom of movement of workers, freedom of establishment and the limits of derogations are discussed.
Ralf Grahn
P.S. Finally the consolidated Lisbon Treaties are due to arrive, 15 April 2008. On Europe day, 9 May 2008 they are published in book form.
We look at what, if anything, the EU’s Treaty of Lisbon changes compared to the current Treaty establishing the European Community, and if the draft Constitution and the Constitutional Treaty would have made any difference.
A case note offers an example of practical considerations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference briefly mentions Article 45 of the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU). See Official Journal, OJ, 17.12.2007 C 306/54:
53) In Article 45, second paragraph, the words ‘The Council may, acting by a qualified majority on a proposal from the Commission,’ shall be replaced by ‘The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may’.
***
For contents and meaning we turn to the latest consolidated version of the current treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/60:
Article 45 TEC
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The Council may, acting by a qualified majority on a proposal from the Commission, rule that the provisions of this Chapter shall not apply to certain activities.
***
To arrive at a consolidated Lisbon Treaty version of an Article requires that we check if one or more of the following apply: express amendments, horizontal amendments, renumbering of the provision and renumbering of possible referrals.
The location of the Article is thrown in as a matter of reading convenience in a post read in isolation.
Thus, we should end up with the following Article, consolidated according to the Treaty of Lisbon:
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 2 ‘Right of establishment’
Article 45 TFEU (ToL), renumbered Article 51 TFEU
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may rule that the provisions of this Chapter shall not apply to certain activities.
***
Article III-24 of the draft Treaty establishing a Constitution for Europe introduced ‘European laws or framework laws’ (co-decision, ordinary legislative procedure) into the second paragraph, arguably in plainer language (OJ 18.7.2003 C 169/32):
Article III-24 Draft Treaty
This Subsection shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
European laws or framework laws may exempt certain activities from application of this Subsection.
***
Article III-139 of the Treaty establishing a Constitution for Europe replaced the word ‘exempt’ by ‘exclude’, but made no other changes (OJ 16.12.2004 C 310/62).
***
We see that the IGC 2007, by-passing such ‘cosmetic’ changes in such cases, manages to keep the number and volume of Lisbon Treaty amendments down, by reverting to the TEC text.
***
Suitable further reading is offered by Peer Zumbansen in a note on the case C-283/99 ‘No Need To Be Italian: ECJ Hands Down Third Case Related To Nationality Requirements For Private Security Guards’, published in the German Law Journal Vol. 2 No. 10 – 15 June 2001, and available on the web:
http://www.germanlawjournal.com/print.php?id=29
Freedom of movement of workers, freedom of establishment and the limits of derogations are discussed.
Ralf Grahn
P.S. Finally the consolidated Lisbon Treaties are due to arrive, 15 April 2008. On Europe day, 9 May 2008 they are published in book form.
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