Services in EU single market strategy

In the blog entry Evidence-based European market reforms?, we saw that the condensed single market communication could be used in parallel with the staff working document underpinning the reforms:

Upgrading the Single Market: more opportunities for people and business; Brussels, 28.10.2015 COM(2015) 550 final (22 pages)

A Single Market Strategy for Europe - Analysis and Evidence; Brussels, 28.10.2015 SWD(2015) 202 final (108 pages)

(We found that cross-border VAT offered crushing prima facie evidence of failure from the viewpoint of a single market for SMEs, but we left a detailed discussion until later.)

Domestic keys

The many facets of overdeveloped obstacles for (domestic and) cross-border services and the underdeveloped EU-wide markets were discussed in section 2.3, in the strategy COM(2015) 550 on pages 7-10, but in much greater detail in the analysis paper SWD(2015) 202, on pages 13-39.

Restrictions in the retail sector (section 2.4), page 10 in the communication and pages 39-50 in the supporting working paper, raise similar thoughts:   

EU “red tape” is not the only villain. In many cases the improvement of markets for services - to the benefit of consumers and businesses - requires reforms primarily in the EU member states.

The most concrete Commission proposal was a legislative act to create a services passport to demonstrate professional qualifications. Despite enforcement powers regarding clear breaches, increasingly the Commission seems to assume the role of a guiding mentor and motivational coach, hoping to sway local, regional or state authorities.

Discrimination

The discussion about discrimination (section 2.5), pages 10-12 of the communication and pages 51-54 of the evidence paper, turns to annoying geo-blocking and lame excuses, but with burdensome and fragmented VAT and copyright, how much single market can we realistically expect from SMEs (or anyone under contractual freedom)?

Since the Commission refers to Article 20(2) of the Services Directive 2006/123, let us at least take a look at the excuses provided by the non-discrimination provision:

Article 20

Non-discrimination

1. Member States shall ensure that the recipient is not made subject to discriminatory requirements based on his nationality or place of residence.

2. Member States shall ensure that the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria.

“Directly justified by objective criteria” is one more question to remember, when we deal with the concrete actions and proposals of the Commission, based on the 2015 strategy for the single market.

Ralf Grahn

How should EU fundamental rights and justice crack nuts?

When should the legislator use a sledgehammer to crack a nut (in more senses than one)?

When we advance from the existential importance of fundamental rights to a few lines about the colloquium, I have to admit to a lingering doubt about how intrusive criminal law should become.

I hope that bright thinkers contribute to the cross-border discussion in Europe, since similar problems confront the European and the national level.

Věra Jourová

- It is high time that member states fully implemented EU law to combat racism and xenophobia. I intend to take decisive actions to monitor this implementation and will focus on three points. First of all, member states must firmly and immediately investigate and prosecute racist hatred and violence. Second, I find it disgraceful that Holocaust denial is a criminal offence in only 13 member states. Last but not least, member states must decisively address hate speech, said the EU justice commissioner Věra Jourová in her closing remarks at the Commission's first colloquium on fundamental rights.

Hopefully her openness about the Commission's aims serves the purpose of a wider and improved discussion about the merits of justice policy and criminal law to advance societal aims. Commissioner Jourová promised a number of other actions to counter antisemitism and islamophobia, as well, some more and some less controversial.

Fundamental rights colloquium

Through the web page of the European Commission's first annual fundamental rights colloquium 1-2 October 2015 you can access material, including the thematic discussion notes to steer the discussions. The notes offer you a fairly detailed view of the issues at the colloquium, but worth continued discussion in Europe more widely:

Stepping up action to prevent and combat antisemitic and anti-Muslim hate crimes (Session I.a)

The role of local authorities, education and grass-root projects (Session I.b)

Tackling hate speech in a connected world (Session II.a)

Fostering equality legislation and promoting non-discrimination policies (Session II.b)

Ergo 

As you see, there are quite a number of related but separate issues demanding individual treatment.

You can follow, dig for material or participate under the Twitter hashtag #NoPlace4Hate

Ralf Grahn 

“Romagate” is everywhere, including Brussels and Belgium

From a human rights perspective, Stijn Smet on the Strasbourg Observers describes the “utterly unacceptable treatment of Roma by Sarkozy’s government”. The discriminatory practice violates both the freedom of movement within the EU and the prohibition of collective expulsions. The blog post links to the resolution by the European Parliament and the 5 August 2010 missive containing further instructions on the ‘evacuation’ of Roma camps.

However, the blog post does not stop there. It notes the existence of cases which fall under the radar screen of international media, but reveal a poisonous attitude towards Roma. One such case concerns the Brussels area, where there is now no place to station caravans legally. The blog entry describes attempts to prevent Roma from stationing their vans illegally, and it goes on to discuss to which extent states (including Belgium) have a positive obligation to provide spaces for the ‘Gypsy way of life’.

The blog post is an introduction to complex questions facing not only the European Union and the Council of Europe, but national, regional and local authorities all over Europe. This blog post needs to be read in European public administrations.




Ralf Grahn




P.S. The Day of Multilingual Blogging 26 September 2010is drawing closer. It is arranged by the European Commission Representation in the UK and joined by the multilingual blog aggregator Bloggingportal.eu as well as individual Eurobloggers.

Discrimination frustrates free movement in the EU

The free movement of people has been an aim since the 1957 EEC Treaty. Discrimination on grounds of nationality has been prohibited for as long. Directive 2004/38 on the right of the citizens of the (European) Union and their family members to move and reside freely within the territory of the Member States is supposed to enhance and protect these rights.



However, restrictive and discriminatory practices persist in the EU member states, making a mockery out of citizens’ rights. A short blog post on Talking about the EU – Moving on up (21 January 2010) – started a revealing discussion about Kafkaesque experiences of absurd practices facing people who move from one EU country to another (Britain).

From Sainsbury’s not accepting EU identity cards to problems opening a bank account, renting a flat or getting a contract for a mobile phone or broadband access, the ingenuity of private firms and landlords to frustrate movers seems endless.

This is an important discussion about the everyday experiences of EU citizens. You can contribute to the discussion on Talking about the EU.

What have you or your expat friends experienced?

What should be done?




Ralf Grahn




P.S. Educate yourself and brush up your language skills by reading Euroblogs. On Bruxelles2 (in French) the journalist Nicolas Grosverheyde writes expertly about the security and defence issues facing the European Union.



Bruxelles2 is listed with more than 500 great Euroblogs on growing multilingual Bloggingportal.eu, your useful one-stop-shop for fact, opinion and gossip on European affairs, i.a. politics, policies, communication, economics, finance, business, civil society and law. You can also subscribe to the RSS feed for new blog posts appearing on Bloggingportal.eu.

By the way, I also discuss European issues in Finnish on Eurooppaoikeus and in Swedish on Grahnblawg.

Aland Islands: Lisbon Treaty

What is so special about 21 April 2009?

Very little, in fact. It is just the anniversary of the EU Treaty of Lisbon in the Åland Islands (population 27,500). On this day a year ago, the authorities in autonomous Åland registered the arrival of the request by the President of Finland to approve the amending treaty with regard to the areas subject to local legislation.

About a month and four plenary sessions later the Åland Parliament sent the proposal to its Legal Committee, responsible for legal business which relates to the autonomy of Åland and to international treaties which are applicable to Åland.



No report has appeared. The status file this morning tells us that the matter is still being prepared.

Approval of the Lisbon Treaty is not listed on the preliminary agendas of the three coming plenary sessions.

***

How should we interpret the situation?

Two conflicting forces are at work. The European Union is a project of deepening integration, in other words lowering barriers. The driving force of local politics in Åland is to strengthen the particular traits of local society (language, culture, political and economic rights, administration, businesses, legislation etc.). The special status of Åland was accepted by the European Union when Finland became a member state in 1995; the Åland Protocol, enshrined by the Lisbon Treaty, even condones practices, which are contrary to core internal market principles (as long as discrimination of outsiders is practiced equally).

The Lisbon Treaty affects areas of autonomous Åland legislation only marginally, but a positive response requires a two thirds majority in the local parliament with 30 members.

The slow response has little to do with the Lisbon Treaty ‘per se’, but has been used as a bargaining chip to press for concessions from the Finnish Government with regard to EU affairs. Åland already is fully involved in the preparation and conduct of these matters, so the aspirations have taken aim at representation (Council, European Parliament, Court of Justice), a harder nut to crack.

If a coming proposal to approve the Lisbon Treaty fails to get the required qualified majority, it would lead to an unprecedented situation. The amending treaty would not be applicable in a part of the territory of a member state. But what would follow, if the rest of the European Union had moved forward from the Treaty of Nice?

Finland would have to notify the European Union, and it would have to negotiate some sort of new status for Åland. But what would the EU accept today, given that exemptions increasingly complicate the application of EU legislation in an expanding union?

If the Treaty of Lisbon falls in the Czech Republic, Germany, Ireland or Poland, the problem disappears. But so does Åland’s bargaining chip.

NB: Finland has concluded its ratification process. Åland decides only with regard to its own territory.


Ralf Grahn

EU TFEU: Tax provisions

The EU Treaty of Lisbon leaves the tax provisions (fiscal provisions) of the current Treaty establishing the European Community essentially unchanged.

Article 110 of the Treaty on the Functioning of the European Union prohibits tax discrimination within the internal market and imposes a requirement of neutrality on the member states’ governments.


***

Article 110 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/93:

Part Three ‘Union policies and internal actions’

Title VII Common rules on competition, taxation and approximation of laws

Chapter 2 Tax provisions


Article 110 TFEU
(ex Article 90 TEC)

No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.

***

In Article 2, point 78 of the Treaty of Lisbon (ToL) the IGC 2007 amended Article 88 of the Treaty establishing the European Community (TEC) and in point 79 it dealt with Article 93 TEC. This means that no specific amendments were made to Article 90 TEC. Cf. OJ 17.12.2007 C 306/69.

***

The TFEU table of equivalences tells us that Article 90 TEC first became Article 90 TFEU (ToL) in the original Treaty of Lisbon, but later renumbered Article 110 TFEU in the consolidated version (OJ 17.12.2007 C 306/211).

***

The current Article 90 of the Treaty establishing the European Community (TEC) is found under Title VI ‘Common rules on competition, taxation and approximation of laws’, Chapter 2 ‘Tax provisions’, in the latest consolidated version of the treaties in force (OJ 29.12.2006 C 321 E/78).

No specific amendment and no horizontal amendment; the wording of Article 90 TEC is exactly the same as Article 110 TFEU.

***

We have now seen that 90 TEC in force and 110 TFUE are exactly the same.

Still, for the sake of systematic comparison, we look at the arcana of the Article during the intervening treaty reform stages.

First, we turn to the European Convention, the closest thing to a constituent assembly EU citizens have had. The Article in question is located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter I ‘Internal market’, Section 6 ‘Fiscal provisions’.

Article III-59 of the draft Treaty establishing a Constitution for Europe was exactly the same as Article 90 TEC (OJ 18.7.2003 C 169/37).

***

In the Treaty establishing a Constitution for Europe the tax provisions were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter I ‘Internal market’, Section 6 ‘Fiscal provisions’.

Even if the first paragraph of Article III-170 was the same as Article III-59 proposed by the European Convention, the IGC 2004 created an Article with three paragraphs by housing Articles III-60 and III-61 of the draft Constitution under the same roof (OJ 16.12.2004 C 310/73. Cf. OJ 18.7.2003 C 169/37–38):

Article III-170 Constitution

1. No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.

2. Where products are exported by a Member State to the territory of another Member State, any repayment of internal taxation shall not exceed the internal taxation imposed on them whether directly or indirectly.

3. In the case of charges other than turnover taxes, excise duties and other forms of indirect taxation, remissions and repayments in respect of exports to other Member States may not be granted and countervailing charges in respect of imports from Member States may not be imposed unless the provisions contemplated have been previously approved for a limited period by a European decision adopted by the Council on a proposal from the Commission.

***

What has anyone been able to say about the unchanged Article 110 TFEU?


United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.3: Revised text of Part Three, Titles I to VI of the Treaty establishing the European Community (TEC): Internal Market and competition’ (Version 2, 23 October 2007) includes the current Title VI Common rules on competition, taxation and approximation of laws.

Peers indicated the changing numbering of Article 90 TEC and TFEU (ToL), to be renumbered Article 110 TFEU in the consolidated version, without comment (page 28).

The analysis 3.3 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm


***

The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 110 TFEU, Article 90 TFEU (ToL) in the original Lisbon Treaty (page 12):

“Unchanged from Article 90 TEC.”

The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

***

The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed taxation on page 60 (although the heading ‘2. Taxation’ continued with (tax) harmonisation from page 60 to 61).

Because this blog post is an introduction to the tax provisions, we reproduce the comments on Articles 90 to 93 TFEU (ToL), later renumbered Articles 110 to 113 TFEU in the consolidated version:

“Articles 90–93 (Constitution Articles III-170 – III-171) concern taxation. They incorporate the existing tax provisions set out in Articles 90 to 93 TEC. There is a considerable body of European law concerning the harmonisation across Member States of indirect taxes: that is, VAT and excise duties on alcoholic drinks, hydrocarbon oils and tobacco products. At present the Treaty base for this legislation is Article 93 TEC, which states:

The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market within the time limit laid down in Article 14. (122)

The new Article 93 (Constitution Article III-171) has one substantive change. Legislation for harmonising indirect taxes may be adopted (emphasis added) “provided that such harmonisation is necessary for the establishment or the functioning of the internal market and to avoid distortion of competition.” It remains the case that any such legislation must be agreed by the Council acting unanimously.”

---
Footnote 122 stated: Article 14 refers to the establishment of the single European market on 1 January 1993.
---

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

***

The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) is a valuable resource on the Treaty of Lisbon, but I found no reference to Article 110 TFEU (Article 90 TEC and ToL).

The report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf

In case anyone wants to dig deeper, taxes, unanimity and harmonisation are discussed ‘passim’ in Volume II of the report ‘Evidence’.


***

Sweden

The consultation paper ’Lissabonfördraget’ is still valuable as a description of the Lisbon Treaty amendments, and it is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

The Swedish government’s draft ratification bill ‘Lagrådsremiss – Lissabonfördraget’, was published 29 May 2008 and sent to the Council on Legislation (Lagrådet) for an expert opinion. The draft deals with the EU’s internal policy areas in Chapter 23 ‘Unionens interna åtgärder’, and section 23.1 presents the internal market (Inre marknaden), on pages 175 to 181.

Tax provisions are dealt with on page 179 in a section called ‘Bestämmelser om skatter’. The government of Sweden remarks on the essentially unchanged nature of the tax provisions in general and it then explains the clarification of Article 93 TFEU (ToL):

”Bestämmelser om skatter

Bestämmelserna om skatter är i princip oförändrade. I artikel 93 i EUF-fördraget om harmonisering av lagstiftningen om omsättningsskatter, punktskatter och andra indirekta skatter eller avgifter på den inre marknaden görs ett förtydligande. Som nödvändig förutsättning för att harmonisera lagstiftning anges som tillägg “att undvika snedvridning av konkurrensen”. Rådet ska, i likhet med nu gällande EG-fördrag, fatta beslut med enhällighet i skattefrågor efter att ha hört Europaparlamentet. (Se artikel 2.79 i Lissabonfördraget.)”

The draft bill ‘Lagrådsremiss – Lissabonfördraget’ can be downloaded through:

http://www.regeringen.se/sb/d/5676/a/106277

***

Finland

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), offers an introductury comment on taxes and charges (Veroja ja maksuja koskevat määräykset) and a brief statement on the unchanged nature of Article 90 TFEU (ToL), renumbered Article 110 TFEU (page 208):

”Määräykset koskevat veroihin ja maksuihin sovellettavia pääperiaatteita sekä neuvoston toimivaltaa niiden osalta ja ne vastaavat määräysten sanamuodon teknisiä tarkistuksia lukuun ottamatta pääasiallisesti nykyisen EYsopimuksen kolmannen osan VI osaston 2 luvun määräyksiä samoin kuin perustuslakisopimuksen III-171 ja III-172 artiklan määräyksiä.

90 artiklaa (uusi 110 artikla), joka kieltää jäsenvaltioita määräämästä muiden jäsenvaltioiden tuotteille korkeampia välillisiä tai välittömiä sisäisiä maksuja kuin kotimaisille tuotteille, ei muuteta.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), presents the same introductory remark on fiscal provisions under ’Bestämmelser om skatter och avgifter’ and the comment on the unchanged nature of Article 90 TFEU (ToL), the future Article 110 TFEU, on page 211:

”Bestämmelserna gäller de huvudprinciper som ska tillämpas på skatter och avgifter samt rådets befogenheter i fråga om dem och de motsvarar de tekniska anpassningarna av bestämmelsernas ordalydelse med undantag i huvudsak för bestämmelserna i avdelning VI kapitel 2 i det nuvarande EG-fördragets tredje del liksom även bestämmelserna i artiklarna III-171 och III-172 i det konstitutionella fördraget.

Artikel 90 (blivande artikel 110), som förbjuder medlemsstaterna att direkt eller indirekt på varor från andra medlemsstater lägga interna skatter eller avgifter som är högre än de skatter eller avgifter som direkt eller indirekt läggs på liknande inhemska varor, ändras inte.”

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf



Ralf Grahn

EU TFEU: Transport non-discrimination and direct effect

What’s in a name? When discrimination ‘shall be abolished’ is replaced by ‘shall be prohibited’ in the Treaty of Lisbon, non-discrimination and direct effect appear in a new light.


***

Article 95 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/86:

Part Three ‘Policies and internal actions of the Union’

Title VI TFEU ‘Transport’

Article 95 TFEU
(ex Article 75 TEC)

1. In the case of transport within the Union, discrimination which takes the form of carriers charging different rates and imposing different conditions for the carriage of the same goods over the same transport links on grounds of the country of origin or of destination of the goods in question shall be prohibited.

2. Paragraph 1 shall not prevent the European Parliament and the Council from adopting other measures pursuant to Article 91(1).

3. The Council shall, on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, lay down rules for implementing the provisions of paragraph 1.

The Council may in particular lay down the provisions needed to enable the institutions of the Union to secure compliance with the rule laid down in paragraph 1 and to ensure that users benefit from it to the full.

4. The Commission shall, acting on its own initiative or on application by a Member State, investigate any cases of discrimination falling within paragraph 1 and, after consulting any Member State concerned, shall take the necessary decisions within the framework of the rules laid down in accordance with the provisions of paragraph 3.

***

In Article 2, point 72 of the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) laid out the specific amendments to Article 75 TEC (OJ 17.12.2007 C 306/68):

72) Article 75 shall be amended as follows:

(a) in paragraph 1, the words ‘shall be abolished’ shall be replaced by ‘shall be prohibited’;

(b) in paragraph 2, the words ‘the Council’ shall be replaced by ‘the European Parliament and
the Council’;

(c) in the first subparagraph of paragraph 3, the words ‘the Economic and Social Committee’
shall be replaced by ‘the European Parliament and the Economic and Social Committee’.

***

The TFEU table of equivalences tells us that Article 75 TEC first became Article 75 TFEU (ToL), but later renumbered Article 95 TFEU in the consolidated version (OJ 17.12.2007 C 306/210).

***

The current Article 75 of the Treaty establishing the European Community (TEC) is found under Title V ‘Transport’ in the latest consolidated version of the treaties in force (OJ 29.12.2006 C 321 E/71–72):

Article 75 TEC

1. In the case of transport within the Community, discrimination which takes the form of carriers charging different rates and imposing different conditions for the carriage of the same goods over the same transport links on grounds of the country of origin or of destination of the goods in question shall be abolished.

2. Paragraph 1 shall not prevent the Council from adopting other measures pursuant to Article 71(1).

3. The Council shall, acting by a qualified majority on a proposal from the Commission and after consulting the Economic and Social Committee, lay down rules for implementing the provisions of paragraph 1.

The Council may in particular lay down the provisions needed to enable the institutions of the Community to secure compliance with the rule laid down in paragraph 1 and to ensure that users benefit from it to the full.

4. The Commission shall, acting on its own initiative or on application by a Member State, investigate any cases of discrimination falling within paragraph 1 and, after consulting any Member State concerned, shall take the necessary decisions within the framework of the rules laid down in accordance with the provisions of paragraph 3.

***

We look at the previous stages of the treaty reform process. First, the European Convention.

According to Article III-138 of the draft Treaty establishing a Constitution for Europe, in addition to minor amendments, the cases of discrimination mentioned shall be ‘prohibited’ instead of ‘abolished’ as in the current Article 75 TEC (OJ 18.7.2003 C 169/54):

Article III-138 Draft Constitution

1. In the case of transport within the Union, discrimination which takes the form of carriers charging different rates and imposing different conditions for the carriage of the same goods over the same transport links on grounds of the Member State of origin or of destination of the goods in question shall be prohibited.

2. Paragraph 1 shall not prevent the adoption of other European laws or framework laws pursuant to the first paragraph of Article III-134.

3. The Council of Ministers, on a proposal from the Commission, shall adopt European regulations or decisions for implementing paragraph 1. It shall act after consulting the European Parliament and the Economic and Social Committee.

The Council of Ministers may in particular adopt the European regulations and decisions needed to enable the institutions to secure compliance with the rule laid down in paragraph 1 and to ensure that users benefit from it to the full.

4. The Commission, acting on its own initiative or on application by a Member State, shall investigate any cases of discrimination falling within paragraph 1 and, after consulting any Member State concerned, adopt the necessary European decisions within the framework of the European regulations and decisions referred to in paragraph 3.

***

Article III-240 of the Treaty establishing a Constitution for Europe adopted the text of the European Convention with only some terminological change (OJ 16.12.2004 C 310/106–107).

***

The current Article 75 TEC depends on implementing measures to abolish discrimination with regard to carriers charging different rates and imposing different conditions for the carriage of the same goods over the same transport links on grounds of the country of origin or of destination of the goods. As such, Article 75 TEC is not directly applicable.

The Treaty of Lisbon (TFEU) has taken over the prohibition concerning discriminatory transport practices, proposed by the European Convention. A prohibition can be applied directly, without the need for implementing rules.

On the other hand, given the general ban on ‘any discrimination on grounds of nationality’ in Article 18 TFEU (currently Article 12 TEC), what is the scope for the special prohibition in the area of transport policy and with regard to certain forms of discrimination?

***

We now check our preliminary conclusions against how others who have scrutinised the Lisbon Treaty have informed ratifying parliaments and the public.


United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.3: Revised text of Part Three, Titles I to VI of the Treaty establishing the European Community (TEC): Internal Market and competition’ (Version 2, 23 October 2007) includes the current Title V Transport.

Peers highlighted the differences between the current Article 75 TEC, the Constitutional Treaty and the Lisbon Treaty, but found no need to comment on Article 75 TFEU (ToL), to be renumbered Article 95 TFEU in the consolidated version (page 21–22).

The analysis 3.3 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm

***

The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). The comment on Article 95 TFEU, Article 75 TFEU (ToL) in the original Lisbon Treaty, focuses of the requirement to consult the European Parliament (page 11):

“In substance the same as Article 75 TEC, with a new requirement to consult the EP.”

The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

***

The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) wrapped up Transport in a brief comment on page 56:

“F. Transport

Title V, Articles 70-80 (Constitution Articles III-236 – 245) are on transport and are based largely on Articles 70 – 75 TEC, but with a change in the voting procedure to the OLP with QMV, except for Article 72, which replaces unanimity in the Constitution Article III-237 with a “special legislative procedure”. Other, minor, changes are Article 75(c), which adds the EP to those bodies to be consulted, and Article 78 (Constitution Article III-243), allowing the Article concerning German unification to be repealed after 5 years.

Present Articles 154 – 156 on Trans-European Networks (TENS) have been moved to Title VII and contain only minor amendments.”

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

***

The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) made no explicit reference to Article 95 TFEU.

The report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf

***

Sweden

The consultation paper of the government of Sweden, ‘Lissabonfördraget; Statsrådsberedningen, Departementsserien (Ds), Ds 2007:48’ published 20 December 2007, bundled together transport and trans-European networks under the headline ‘Transporter och transeuropeiska nät’ (page 280 to 282).

The text offers an overview of the coming Title VI ‘Transport’. Without mentioning Article 75 TFEU (ToL), the future Article 95 TFEU, the consultation paper describes the current rules to abolish discrimination on page 281 and mentions the change that the European Parliament has to be consulted according to Article 75(3) TFEU (ToL):

“Beslutsförfarandet för att genomföra avskaffande av diskriminering vid transporter inom gemenskapen ändras på så sätt att Europaparlamentet ska höras innan rådet fattar beslut med kvalificerad majoritet (artikel 75.3 i EUF-fördraget).”

The consultation paper ’Lissabonfördraget’ is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

***

Finland

The systematic Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), explains the amendments to Article 75 TFEU (ToL), renumbered Article 95 TFEU, although it does not draw any connclusions from the difference between measures to abolish discrimination and an outright prohibition (page 206):

”75 artiklaa (uusi 95 artikla), joka koskee syrjintää yhteisön sisäisessä liikenteessä tavaroiden alkuperä- tai määrämaan perusteella, muutetaan siten, että syrjinnän poistamisen sijasta käytetään ilmaisua ”Unionin sisäisessä liikenteessä on kiellettyä”.

SEUT 75 artikla vastaa pääosin perustuslakisopimuksen III-240 artiklaa. Perustuslakisopimuksen III-240 artiklan 1 kohdassa käytetään kuitenkin ilmaisun ”tavaroiden alkuperä- tai määrämaa” sijasta ilmaisua ”tavaroiden alkuperä- tai määräjäsenvaltio”. Sen lisäksi perustuslakisopimuksen III-240 artiklan 2 ja 3 kohdassa yksilöidään käytettävät säädösinstrumentit.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf

The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), offers the same explanation on pages 208–209:

”Artikel 75 (blivande artikel 95), som gäller diskriminering vid transporter inom gemenskapen på grund av godsets ursprungs- eller bestämmelseland, ändras så att man i stället för avskaffandet av diskriminering använder ”vid transporter inom unionen ska all sådan diskriminering vara förbjuden".

Artikel 75 i EUF-fördraget motsvarar i huvudsak artikel III-240 i det konstitutionella fördraget. I artikel III-240.1 i det konstitutionella fördraget används dock uttrycket "godsets ursprungs- eller bestämmelsemedlemsstat” i stället för ”godsets ursprungs- eller bestämmelseland". I artikel III-240.2 och III-240.3 i det konstitutionella fördraget specificeras de rättsaktsinstrument som ska användas.”

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf

***

The current Article 75 TEC does not, if I understand correctly, have direct effect, since it depends on implementing measures. But the new TFEU 95 prohibition on discrimination should be directly applicable as ‘lex specialis’. In a concrete case the provision’s scope for non-discrimination and direct effect requires study, with the general ban on discrimination based on nationality (18 TFEU, 12 TEC) as a guiding light for interpretation.

Should my reasoning be correct, I am surprised that my sources have paid so little attention to the proposed change.


Ralf Grahn

EU TFEU: Commercial state monopolies

’Politics makes strange bedfellows’, but not more than the free movement of goods and state monopolies of a commercial character within the European Community (European Union).

***

Article 31 of the Treaty establishing the European Community (TEC) first becomes Article 31 of the Treaty on the Functioning of the European Union (TFEU) according to the original Treaty of Lisbon (ToL) numbering. When the amending treaty is consolidated, the provision is renumbered Article 37.

The wording for the unaltered provision is found in the latest consolidated version of the current treaties, Official Journal, OJ 29.12.2006 C 321 E/53, to which we add the Lisbon Treaty context (Tables of equivalence, OJ 17.12.2007 C 306/207):

Part Three Policies and internal actions of the Union

Title Ia (renumbered Title II) Free movement of goods

Chapter 2 (renumbered Chapter 3) Prohibition of quantitative restrictions between Member States

Article 31 TFEU (ToL), renumbered Article 37 TFEU

1. Member States shall adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States.

The provisions of this Article shall apply to any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States. These provisions shall likewise apply to monopolies delegated by the State to others.

2. Member States shall refrain from introducing any new measure which is contrary to the principles laid down in paragraph 1 or which restricts the scope of the articles dealing with the prohibition of customs duties and quantitative restrictions between Member States.

3. If a State monopoly of a commercial character has rules which are designed to make it easier to dispose of agricultural products or obtain for them the best return, steps should be taken in applying the rules contained in this Article to ensure equivalent safeguards for the employment and standard of living of the producers concerned.

***

Errata

I apologise for my mistake concerning the Title given as ‘Title I The internal market’ in the posts on Articles 27a to 30 according to the Lisbon Treaty numbering (renumbered Articles 33 to 36). The correct version is ‘Title Ia (renumbered Title II) Free movement of goods’.

I have served myself a generous helping of Easter humble pie.

***

The European Convention took over the contents of the provision, with nearly identical wording in Article III-44 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/34).

The same applies to Article III-155 of the Treaty establishing a Constitution for Europe.

***

State monopolies of a commercial character and the principle of free movement of goods are rather awkward companions, but the monopolies are not prohibited by Article 31 TFEU (ToL; renumbered Article 37 TFEU), only to be adjusted to ensure the abolition of discrimination.

The provision applies to goods and between member states (internal market), not regarding third countries.

Existing commercial monopolies have to be adjusted, and the introduction of new measures is forbidden (standstill clause).

***

A few examples:

National monopolies on the sale of alcoholic beverages in Sweden and Finland have been adjusted, but the sale of medicinal preparations in Sweden did not ensure non-discrimination.

In a preliminary ruling the Court of Justice found (case C-438/02) that the way in which Apoteket is organised and operates, and more particularly its system of selecting medicinal preparations, is liable to place trade in medicinal preparations from other Member States at a disadvantage as compared with trade in Swedish medicinal preparations. Thus, that State monopoly is not arranged in such a way as to exclude any discrimination against medicinal preparations from other Member States. It thus infringes Article 31(1) EC.


Ralf Grahn

EU TFEU: Legitimate restrictions on imports and exports

The free movement of goods is a fundamental principle of the internal market of the European Community (European Union). There are, however, other societal values, which call for attention, and they can vary between the member states.

A balance has to be sought between these different values, leaving scope for national sensitivities, but preventing discriminatory use.

***

Since the intergovernmental conference (IGC 2007) had nothing in particular to say about the contents of Article 30 of the Treaty establishing the European Community (TEC), we start by looking up the provision in the latest consolidation of the treaties OJ 29.12.2006 C 321 E/53:


Article 30 TEC

The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

***

In the Treaty of Lisbon (ToL) Article 30 TEC becomes Article 30 of the Treaty on the Functioning of the European Union (TFEU). In later consolidated versions the provision and the two Articles referred to are renumbered according to the Tables of equivalences referred to in the IGC 2007 Article 5 of the Treaty of Lisbon (OJ 17.12.2007 C 306/207). We indicate the Article numbers and the location of the provision:

Part Three Policies and internal actions of the Union

Title I The internal market

Chapter 2 (renumbered Chapter 3) Prohibition of quantitative restrictions between Member States

Article 30 TFEU (ToL), new numbering Article 36 TFEU

The provisions of Articles 28 [TFEU (ToL), new number Article 34 TFEU] and 29 [TFEU (ToL), renumbered Article 35 TFEU] shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

***

I routinely check my rendering against Klemens H. Fischer: Der Vertrag von Lissabon, the IIEA: Treaty on the Functioning of the European Union (Consolidated version) and the Statewatch Analysis by Steve Peers. If I find an anomaly, I check again.

***

Because the draft Treaty establishing a Constitution for Europe had only one Article prohibiting quantitative restrictions on both imports and exports, the referral was different, but otherwise the European Convention took over the text of Article 30 TEC word for word in its Article III-43 (OJ 18.7.2003 C 169/34).

The same goes for Article III-154 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/66).

***

The grounds for exceptions (derogations) from the free movement of goods may be easier to read if presented in the form of a list:

· Public morality

· Public policy

· Public security

· Protection of health

· Protection of national treasures

· Protection of industrial and commercial property

These are only possible grounds for prohibitions or restrictions on the free movement of goods by the member states.

In order to override the commercial interest of free flow of goods, the exceptions have to be justified on objective grounds. They have to be necessary to achieve the policy aim in question, and they have to be proportional, namely no more disruptive than needed to attain their objective.

The Court of Justice (‘of the European Union’, as it is to be known) is the final arbiter of when restrictive measures are legitimate and when they constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. Derogations or exceptions are interpreted narrowly.

One example of a national measure on public morality grounds that would fail is a prohibition of imports of pornographic products, if domestic goods of the same kind were allowed.


Ralf Grahn

EU TFEU: Customs union

Within the internal market customs duties on imports and exports are banned. But in addition to these obvious prohibitions other charges or ‘taxes’ can have discriminatory effects. The Court of Justice has repeatedly drawn the line between genuine measures and discriminatory practices.

***

Article 25 of the Treaty establishing the European Community (TEC) is one of the provisions left alone by the intergovernmental conference (IGC 2007) in the Treaty of Lisbon (ToL). In the renamed Treaty on the Functioning of the European Union (TFEU) the Article number is initially preserved, but in later versions of the treaty the provision will appear as Article 30 (OJ 17.12.2006 C 306/207):

Part Three Union policies and internal actions

Title II Free movement of goods

Chapter 1 The customs union

Article 25 TFEU (ToL), renumbered Article 30 TFEU

Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.

***

The unchanged provision can be followed through the preceding stages:

Article 25 TEC in OJ 29.12.2006 C 321 E/52.

Article III-38 Draft Constitution in OJ 18.7.2003 C 169/34.

Article III-151(4) Constitution in OJ 16.12.2004 C 310/65.

***

As a customs union the European Community (in the future the European Union) has a common customs border in relation to third countries.

Within the customs union customs duties are prohibited on both imports and exports.

This prohibition is extended to all discriminatory measures, whatever they are called. For instance inspection charges on imported goods or ‘taxes’ targeting imports unfairly compared to domestic products are prohibited. A measure is judged not by its name, but by its effects.

Since taxation is largely a matter for the member states, and the efforts to harmonise taxation have yielded fairly modest results, the Court of Justice (to be known as the Court of Justice of the European Union, CJEU) has frequently had to pronounce legislative acts of member states to be contrary to the prohibition.

***

If your business wants support or advice on business opportunities within the European Union or information on EU legislation, you can turn to one of the 600 partner organisations of the Enterprise Europe Network, in 40 countries, launched in February 2008, but building on previous experience.

More about the Enterprise Europe Network on:

http://www.enterprise-europe-network.ec.europa.eu/index_en.htm

***

A citizen or business facing problems caused by misapplication of internal market law by public authorities can use the good offices of the SOLVIT network to solve problems without legal proceedings:

http://ec.europa.eu/solvit/site/index_en.htm

***

Discriminating charges having equivalent effect, including customs duties of a fiscal nature, between member states are less a question of misapplication of EC legislation and more of mis-legislation. Therefore the Court of Justice has often been called on to draw the lines between prohibited and justified national measures.

The handy Alphabetical Table of Subject-matter (Table alphabétique des matières) covers the volumes from 1985 to 2001. Unfortunately it is available only in French, but under ‘Droits de douane et taxes d’effet équivalent’ you find more than four tightly spaced pages of cited cases:

http://curia.europa.eu/fr/content/outils/tm.pdf

Without the ECJ as the final arbiter individuals and businesses would often lack the means to effectively challenge discriminating legislation.


Ralf Grahn

EU TFEU: Combating discrimination: procedures

Discrimination is an evil. But should it be fought by prohibitions or by employing active countermeasures? These questions confront nearly every organisation, including the European Union. In the case of the EU the dimension of Union and member state powers is added.

A deeper understanding of these issues presupposes some knowledge of the legal basis on which the European Union acts in questions relating to discrimination.

Since the Treaty of Lisbon has been agreed between the member states’ governments, it is natural to take the amending treaty as our point of departure.

***

In Part Two – Non-discrimination and citizenship, the intergovernmental conference (IGC 2007) inserted an Article 16e on combating discrimination into the Treaty establishing the European Community (TEC). The Treaty of Lisbon (ToL) gave the treaty a new name: the Treaty on the Functioning of the European Union (TFEU). Here is the text of the IGC 2007 (Official Journal 17.12.2007 C 306/50):

33) An Article 16 E shall be inserted, with the wording of Article 13; in paragraph 2, the words ‘when the Council adopts Community’ shall be replaced by ‘the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt the basic principles of the Union's’ and the words at the end of the paragraph ‘it shall act in accordance with the procedure referred to in Article 251’ shall be deleted.

***

The main clue offered by the IGC is ‘the wording of Article 13’, which means that we turn to the current TEC (in the latest consolidated version, together with the TEU, OJ 29.12.2006 C 321 E/48):

Article 13 TEC

1. Without prejudice to the other provisions of this Treaty and within the limits of the powers conferred by it upon the Community, the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

2. By way of derogation from paragraph 1, when the Council adopts Community incentive measures, excluding any harmonisation of the laws and regulations of the Member States, to support action taken by the Member States in order to contribute to the achievement of the objectives referred to in paragraph 1, it shall act in accordance with the procedure referred to in Article 251.

***

The Zen of consolidation is to let the current text, the horizontal amendments and the express rewording flow together into a harmonious whole. Since the Lisbon Treaty uses one set of numbering, but offers renumbering for ultimate use, we mention both the ToL and the later Article numbers:

Article 16e TFEU (ToL), renumbered Article 19 TFEU

1. Without prejudice to the other provisions of the Treaties and within the limits of the powers conferred by them upon the Union, the Council, acting unanimously in accordance with a special legislative procedure and after obtaining the consent of the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

2. By way of derogation from paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt the basic principles of the Union's incentive measures, excluding any harmonisation of the laws and regulations of the Member States, to support action taken by the Member States in order to contribute to the achievement of the objectives referred to in paragraph 1.

***

We notice that both paragraphs changed, although the first exclusively by the way of insidious horizontal amendments. Luckily, we can check our result against the ones who have gone before us: the consolidated TFEU versions on offer from the IIEA, the UK’s FCO, Statewatch or Open Europe. The practically minded, of course, turn to one of these consolidated versions immediately.

Web addresses and additional information on consolidated language versions of the Lisbon Treaty can be found in my latest general update:

Consolidated Lisbon Treaty Update (16 February 2008)

Then there are two later specific updates:

EU: Complete Dutch consolidated Lisbon Treaty (23 February 2008)

EU Lisbon Treaty: Ratification and consolidation in Finland (24 February 2008)

***

Although the Treaty of Lisbon amends the current treaties, the general purpose of the IGC 2007 was to enact at least the institutional innovations of the IGC 2004, if the Mandate did not stipulate otherwise.

Substantially, even if not formally, the two preceding stages are therefore of interest to the student of EU law and politics.

The European Convention, chaired by Valéry Giscard d’Estaing, proposed the following Article III-8 in the draft Treaty establishing a Constitution for Europe, Part III The policies and functioning of the Union, Title II Non-discrimination and citizenship (OJ 18.7.2003 C 169/29-30):

Article III-8 Draft Constitution

1. Without prejudice to the other provisions of the Constitution and within the limits of the powers conferred by it upon the Union, a European law or framework law of the Council of Ministers may establish the measures needed to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. The Council of Ministers shall act unanimously after obtaining the consent of the European Parliament.

2. European laws or framework laws may establish basic principles for Union incentive measures and define such incentive measures, to support action taken by Member States, excluding any harmonisation of their laws and regulations.

***

The IGC 2004 agreed on the following wording, in Part III The policies and functioning of the Union, Title II Non-discrimination and citizenship, Article III-124 (OJ 16.12.2004 C 310/56):

Article III-124 Constitution

1. Without prejudice to the other provisions of the Constitution and within the limits of the powers assigned by it to the Union, a European law or framework law of the Council may establish the measures needed to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. The Council shall act unanimously after obtaining the consent of the European Parliament.

2. By way of derogation from paragraph 1, European laws or framework laws may establish basic principles for Union incentive measures and define such measures, to support action taken by Member States in order to contribute to the achievement of the objectives referred to in paragraph 1, excluding any harmonisation of their laws and regulations.

***

The Convention introduced the ‘consent’ of the European Parliament instead of mere consultation as in the current 13(1) TEC. This was taken up in the Constitution and in the Lisbon Treaty, although the real dampener of expectations is that there has been no movement on the requirement of unanimity in the Council for action (measures).

The second paragraph, on incentive measures (supporting action) already adopted under the co-decision procedure, was given a somewhat strange form by the Convention, to ‘establish basic principles for Union incentive measures and define such incentive measures’ instead of adopting them, and the Constitution essentially followed in its footsteps.

Even odder is the wording of paragraph 2 of the Lisbon Treaty, when the European Parliament and the Council, acting in accordance with the ordinary legislative procedure ‘may adopt the basic principles of the Union's incentive measures’. If only basic principles can be adopted, what happens to the needed concrete measures?

***

The principle of non-discrimination is abundantly represented in the amended treaties. Some examples:

Article 1a TEU (ToL), renumbered Article 2 TEU, with non-discrimination as a value common to the Member States.

Article 2 TEU (ToL), renumbered Article 3 TEU, with the aim of the Union to combat social exclusion and discrimination.

Article 5b TFEU (ToL), renumbered Article 10 TFEU, with the aim to combat discrimination when defining and implementing Union policies. The “sister” of Article 16e (new 19) we studied today, and therefore rendered here in full to refresh our memories:

“In defining and implementing its policies and activities, the Union shall aim to combat
discrimination based on sex, racial or ethnic origin, religion or belief, disability, age
or sexual orientation.”

Article 16d TFEU (ToL), renumbered Article 18 TFEU, prohibiting discrimination on grounds of nationality, where measures can be adopted according to the ordinary legislative procedure.

Article 16e TFEU (ToL), renumbered Article 19 TFEU, the various stages of which we have studied in this post, on action to combat discrimination and on basic principles for incentive measures.

Article 30 TFEU (ToL), renumbered Article 36 TFEU, on discrimination or a disguised restriction on trade between Member States.

Article 31 TFEU (ToL), renumberd Article 37 TFEU, on discrimination regarding the conditions under which goods are procured and marketed between nationals of Member States.

Article 34 TFEU (ToL), renumbered Article 40 TFEU, on the prohibition of any discrimination between producers or consumers within the Union concerning the common agricultural market organisation.

Article 39 TFEU (ToL), renumbered Article 45 TFEU, on the prohibition against discrimination based on nationality between workers in the context of free movement.

Article 58 TFEU (ToL), renumbered Article 65 TFEU, which prohibits arbitrary discrimination or disguised restrictions on the free movement of capital and payments.

Article 75 TFEU (ToL), renumbered Article 95 TFEU, which prohibits discrimination in the case of transport within the Union.

Article 87 TFEU (ToL), renumbered Article 107, which allows, as compatible with the internal market, state aid having a social character, granted to individual consumers, if granted without discrimination related to the origin of the products concerned.

Article 94 TFEU (ToL), renumbered Article 114 TFEU, with the prohibition of national provisions as means of arbitrary discrimination or a disguised restriction on trade between Member States, within the context of approximation (harmonisation) of the laws of the member states.

Article 141 TFEU (ToL), renumbered Article 157 TFEU, on equal pay without discrimination based on sex.

Article 184 TFEU (ToL), renumbered Article 200 TFEU, prohibiting direct or indirect discrimination between imports from various Member States when introducing or changing customs duties on goods imported into the associated overseas countries and territories.

Article 188j TFEU (ToL), renumbered Article 214 TFEU, with non-discrimination as a principle of humanitarian aid operations.

Article 280a TFEU (ToL), renumbered Article 326 TFEU, which requires that enhanced cooperation complies with the Treaties and Union law, and that it does not undermine the internal market or economic, social and territorial cohesion and that it shall not constitute a barrier to or discrimination in trade between Member States or distort competition between them.

***

The listing shows us that there are two main contexts and groups of anti-discriminatory provisions in the EU treaties:

We have prohibitions, action to combat and incentive measures concerning discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

The second group is related to the internal market, meant to function as if there were no national borders between the member states.

Another question worth mentioning is the distinction between prohibitions of discrimination and active measures to mitigate evils, and the relative merits of these approaches.

***

Since today’s article regarded the legal basis for action to combat discrimination and for adopting basic principles of the Union's incentive measures, we conclude with suggested reading for those who want to know what the European Community (Union) actually does.

The Commission’s DG Employment, Social Affairs & Equal Opportunities has a web page titled Action against discrimination, Civil Society:

http://ec.europa.eu/employment_social/fundamental_rights/index_en.htm

News and links are on offer to the interested.


Ralf Grahn

EU TFEU: Nationality and non-discrimination

The declaration by the French foreign minister Robert Schuman on 9 May 1950 started the ongoing quest to build Europe “through concrete achievements which first create a de facto solidarity”.

Already the Treaty establishing the European Coal and Steel Community (ECSC) prohibited discriminating practices (Article 4).

Since the then Article 7 of the Treaty establishing the European Economic Community (EEC), non-discrimination on the grounds of nationality has been a fundamental principle of the common market, enriched by the landmark decisions of the European Court of Justice.

Today, the prohibition of discrimination on grounds of nationality is found in Article 12 of the Treaty establishing the European Community, but achieving the mindset expressed by ‘de facto solidarity’ is a never ending challenge for both national governments and citizens.

***

We start to look at Part Two of the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU). In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) gave Part Two a new headline: Non-discrimination and citizenship of the Union (adding ‘Non-discrimination and’). See Official Journal (OJ) 17.12.2007 C 306/50:

NON-DISCRIMINATION AND CITIZENSHIP

31) The heading of Part Two shall be replaced by the following heading: ‘NON-DISCRIMINATION AND CITIZENSHIP OF THE UNION’.

32) An Article 16 D shall be inserted, with the wording of Article 12.

***

We are sent scurrying for Article 12 TEC, currently in Part One, Principles. The provision can be found in the latest consolidated version of the present TEU and TEC, in OJ 29.12.2006 C 321 E/48:

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.

***

After the obligatory horizontal amendments, we have the text of the Lisbon Treaty provision before our eyes:

Part Two – Non-discrimination and citizenship of the Union

Article 16d TFEU (ToL), after renumbering Article 18 TFEU

Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.

The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt rules designed to prohibit such discrimination.

***

The European Convention proposed to give the fundamental principle of non-discrimination on grounds of nationality the visibility it deserved by placing the provision in Article I-4(2) of Part I, Title I Definition and objectives of the Union, of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/8):

Article I-4 Draft Constitution
Fundamental freedoms and non-discrimination

1. Free movement of persons, goods, services and capital, and freedom of establishment shall be guaranteed within and by the Union, in accordance with the provisions of the Constitution.

2. In the field of application of the Constitution, and without prejudice to any of its specific provisions, any discrimination on grounds of nationality shall be prohibited.

***

Article III-7 of the draft Constitution contained the basis for legislation (OJ 18.7.2003 C 169/29):

TITLE II
NON-DISCRIMINATION AND CITIZENSHIP

Article III-7 Draft Constitution

European laws or framework laws may lay down rules to prohibit discrimination on grounds of nationality as referred to in Article I-4.

***

The IGC 2004 followed the same approach in the Treaty establishing a Constitution for Europe, where Title I Definition and objectives of the Union, of Part I, contained Article I-4(2) (OJ 16.12.2004 C 310/12):

Article I-4 Constitution
Fundamental freedoms and non-discrimination

1. The free movement of persons, services, goods and capital, and freedom of establishment shall
be guaranteed within and by the Union, in accordance with the Constitution.

2. Within the scope of the Constitution, and without prejudice to any of its specific provisions, any discrimination on grounds of nationality shall be prohibited.

***

The legal basis is found in Article III-123 of the Constitutional Treaty (OJ 16.12.2004 C 310/56):

TITLE II
NON-DISCRIMINATION AND CITIZENSHIP

Article III-123 Constitution

European laws or framework laws may lay down rules to prohibit discrimination on grounds of nationality as referred to in Article I-4(2).

***

A few remarks by your glossator:

The position of the prohibition of discrimination on grounds of nationality may be less dignified in the Lisbon Treaty than in the Constitution, but the fundamental principle is preserved and its scope widens from the ‘Community’ to encompass the treaties as a whole.

Specific provisions against discrimination and the (gradual) establishment of EU citizenship as a fundamental status for equal rights bolster the classical non-discrimination requirement on the basis of nationality.

The ordinary legislative procedure applies, replacing the co-decision procedure (Article 251 TEC), although many problems relate to partial practices rather than lack of legislation.

***

An introduction to the inventiveness concerning discrimination on grounds of nationality is offered, free of charge, by the ECJ’s Digest of case-law (available only in French).


Ralf Grahn


Sources:

Declaration of 9 May 1950 (the Schuman declaration)
http://europa.eu/abc/symbols/9-may/decl_en.htm

European Court of Justice: Répertoire de jurisprudence communautaire (Digest of Community case-law), B – The European Community (EEC/EC), B-01.05 Interdiction de discrimination en raison de la nationalité (Derniére mise à jour au 02/03/2008), 83 summaries
http://curia.europa.eu/common/recdoc/repertoire_jurisp/bull_cee/data/index_B-01_05.htm

EU TFEU: Combating discrimination

The European Union is bound by prohibitions on discrimination and the European Community is allowed action to combat discrimination on various grounds.

The Treaty of Lisbon introduces a horizontal aim to combat discrimination on specific grounds in the policies and activities of the European Union.

***

The intergovernmental conference (IGC 2007) inserted a new provision having general applicability into the Treaty of Lisbon (ToL), more precisely the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU). See OJ 17.12.2007 C 306/48:

Article 5b TFEU (ToL), to be renumbered Article 10 TFEU

In defining and implementing its policies and activities, the Union shall aim to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

***

Reading is fine, but understanding is better. We set out to see the origins of this new transversal provision, by looking first at the Treaty establishing a Constitution for Europe, where Title I Provisions of general application of Part III The policies and functioning of the Union has this to offer (OJ 16.12.2004 C 310/55):

Article III-118 Constitution

In defining and implementing the policies and activities referred to in this Part, the Union shall aim to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

***

We are able to see that the only difference is of an editorial nature, the substance including the specific grounds for discrimination to combat being identical in the Lisbon Treaty and the Constitution.

***

If we find something in the Constitutional Treaty, there is cause to take a peek at what the European Convention proposed in the draft Treaty establishing a Constitution for Europe. Part III The policies and functioning of the Union, and its Title I Clauses of general application offer us this provision (OJ 18.7.2003 C 169/29):

Article III-3 Draft Constitution

In defining and implementing the policies and activities referred to in this Part, the Union shall aim to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

***

The draft Constitution and the Constitution are identical in this respect.

***

Article III-3 of the draft Constitution has been described as a new horizontal provision, which would apply to the Constitution and the Lisbon Reform Treaty, as well.

Let us see if there are any points of reference in the current treaties, the TEU and the TEC.

***

One provision to check would seem to be Article 6 TEU, especially paragraph 2 with its reference to the European Convention for the Protection of Human Rights and Fundamental Freedoms (the latest consolidated version of the current TEU and TEC being found in OJ 29.12.2006 C 321 E/1, with Article 6 TEU on page 12):

Article 6 TEU

1. 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.

2. The Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law.

3. The Union shall respect the national identities of its Member States.

4. The Union shall provide itself with the means necessary to attain its objectives and carry through its policies.

***

The European Human Rights Convention, consolidated with later amending protocols, can be found on the web pages of the Council of Europe:

http://conventions.coe.int/Treaty/Commun/QueVoulezVous.asp?NT=005&CM=7&DF=2/25/2008&CL=ENG

Our attention turns to Article 14, as amended by Protocol 11:

Article 14 – Prohibition of discrimination

The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.

***

On the face of it, most of the specific grounds for prohibited discrimination seem to be shared by the European Human Rights Convention and the Lisbon Treaty, but a more thorough examination would be required to ascertain if, for instance, ‘birth or other status’ have been given the same scope by the European Court of Human Rights as ‘disability, age or sexual orientation’ enumerated in the Treaty of Lisbon.

***

One of the mainstays of the common market has been the prohibition of discrimination on grounds of nationality, to be found in the existing Article 12 TEC (OJ 29.12.2006 C 321 E/48):

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.

***

We come even closer when we take a look at the specific grounds for discrimination to combat in the current Article 13 TEC:

Article 13 TEC

1. Without prejudice to the other provisions of this Treaty and within the limits of the powers conferred by it upon the Community, the Council, acting unanimously on a proposal from the
Commission and after consulting the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

2. By way of derogation from paragraph 1, when the Council adopts Community incentive measures, excluding any harmonisation of the laws and regulations of the Member States, to support action taken by the Member States in order to contribute to the achievement of the objectives referred to in paragraph 1, it shall act in accordance with the procedure referred to in Article 251.

***

The grounds mentioned in Article 13 TEC and Article 5b TFEU (ToL) are identical, and more than a prohibition against discrimination the current treaty envisions active action to combat discrimination.

We are going to leave the question open for now, if the present requirement for unanimity is upheld in the Treaty of Lisbon.

***

The fundamental rights of the citizens of the European Union (or universally), caused a fair amount of commotion among member states’ governments. This warrants a closer look at the Charter of Fundamental Rights and related expressions of concern.

We take note of the fact that the Charter of Fundamental Rights of the European Union includes a prohibition of discrimination, by the EU institutions and the member states when implementing EU law, on various grounds, many of them fairly familiar by now (OJ 14.12.2007 C 303/7):

Article 21 Charter
Non-discrimination

1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, 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 Treaties and without prejudice to any of their specific provisions, any discrimination on grounds of nationality shall be prohibited.

***

We refer the interested reader to the Explanations relating to the Charter of Fundamental Rights (OJ 14.12.2007 C 303/24):

Explanation on Article 21 — Non-discrimination

Paragraph 1 draws on Article 13 of the EC Treaty, now replaced by Article 19 of the Treaty on the Functioning of the European Union, Article 14 of the ECHR and Article 11 of the Convention on Human Rights and Biomedicine as regards genetic heritage. In so far as this corresponds to Article 14 of the ECHR, it applies in compliance with it.

There is no contradiction or incompatibility between paragraph 1 and Article 19 of the Treaty on the Functioning of the European Union which has a different scope and purpose: Article 19 confers power on the Union to adopt legislative acts, including harmonisation of the Member States' laws and regulations, to combat certain forms of discrimination, listed exhaustively in that Article. Such legislation may cover action of Member State authorities (as well as relations between private individuals) in any area within the limits of the Union's powers. In contrast, the provision in Article 21(1) does not create any power to enact anti-discrimination laws in these areas of Member State or private action, nor does it lay down a sweeping ban of discrimination in such wide-ranging areas. Instead, it only addresses discriminations by the institutions and bodies of the Union themselves, when exercising powers conferred under the Treaties, and by Member States only when they are implementing Union law. Paragraph 1 therefore does not alter the extent of powers granted under Article 19 nor the interpretation given to that Article.

Paragraph 2 corresponds to the first paragraph of Article 18 of the Treaty on the Functioning of the European Union and must be applied in compliance with that Article.

***

Naturally, should we be confronted with a problem pertaining to the Charter, we have to be aware of the Protocol on the application of the Charter of Fundamental Rights of the European Union to Poland and to the United Kingdom, these countries wanting to evade enforceable rights (OJ 17.12.2007 C 306/154-155):

PROTOCOL
ON THE APPLICATION OF THE CHARTER OF FUNDAMENTAL
RIGHTS OF THE EUROPEAN UNION TO POLAND AND TO THE
UNITED KINGDOM

THE HIGH CONTRACTING PARTIES,

WHEREAS in Article 6 of the Treaty on European Union, the Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union;

WHEREAS the Charter is to be applied in strict accordance with the provisions of the aforementioned Article 6 and Title VII of the Charter itself;

WHEREAS the aforementioned Article 6 requires the Charter to be applied and interpreted by the courts of Poland and of the United Kingdom strictly in accordance with the explanations referred to in that Article;

WHEREAS the Charter contains both rights and principles;

WHEREAS the Charter contains both provisions which are civil and political in character and those which are economic and social in character;

WHEREAS the Charter reaffirms the rights, freedoms and principles recognised in the Union and makes those rights more visible, but does not create new rights or principles;

RECALLING the obligations devolving upon Poland and the United Kingdom under the Treaty on European Union, the Treaty on the Functioning of the European Union, and Union law generally;

NOTING the wish of Poland and the United Kingdom to clarify certain aspects of the application of the Charter;

DESIROUS therefore of clarifying the application of the Charter in relation to the laws and administrative action of Poland and of the United Kingdom and of its justiciability within Poland and within the United Kingdom;

REAFFIRMING that references in this Protocol to the operation of specific provisions of the Charter are strictly without prejudice to the operation of other provisions of the Charter;

REAFFIRMING that this Protocol is without prejudice to the application of the Charter to other Member States;

REAFFIRMING that this Protocol is without prejudice to other obligations devolving upon Poland and the United Kingdom under the Treaty on European Union, the Treaty on the Functioning of the European Union, and Union law generally,

HAVE AGREED UPON the following provisions, which shall be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union:

Article 1

1. The Charter does not extend the ability of the Court of Justice of the European Union, or any court or tribunal of Poland or of the United Kingdom, to find that the laws, regulations or administrative provisions, practices or action of Poland or of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that it reaffirms.

2. In particular, and for the avoidance of doubt, nothing in Title IV of the Charter creates justiciable rights applicable to Poland or the United Kingdom except in so far as Poland or the United Kingdom has provided for such rights in its national law.

Article 2

To the extent that a provision of the Charter refers to national laws and practices, it shall only apply to Poland or the United Kingdom to the extent that the rights or principles that it contains are recognised in the law or practices of Poland or of the United Kingdom.

***

We have joint Declaration (number 1) concerning the Charter of Fundamental Rights of the
European Union, with one more reminder of the limited impact of the Charter (OJ 17.12.2007 C 306/247):

1. Declaration

The Charter of Fundamental Rights of the European Union, which has legally binding force, confirms the fundamental rights guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States.

The Charter does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined by the Treaties.

***

Citizens’ rights received special attention from two member state governments, leading to three additional declarations:

53. Declaration by the Czech Republic on the Charter of Fundamental Rights of the European Union

61. Declaration by the Republic of Poland on the Charter of Fundamental Rights of the European Union

62. Declaration by the Republic of Poland concerning the Protocol on the application of the Charter of Fundamental Rights of the European Union in relation to Poland and the United Kingdom

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Combating discrimination is set to be a generally applicable principle of EU action.


Ralf Grahn