The free movement of services shares many rules concerning the right of establishment in the Treaty on the Functioning of the European Union, as it does in the current Treaty establishing the European Community.
The pattern of this post is modified to take into account the publication of the consolidated Treaty of Lisbon, published 16 April 2008 by the Council of the European Union in the 23 treaty languages.
***
This is Article 62 of the Treaty on the Functioning of the European Union (TFEU), as amended by the intergovernmental conference (IGC 2007) in the Treaty of Lisbon (ToL) and consolidated by the Council of the European Union (document 6655/08; page 93), with the location of the provision added from the table of equivalences:
Part Three ‘Policies and internal actions of the Union’
Title IV TFEU ‘Free movement of persons, services and capital’
Chapter 3 ‘Services’
Article 62 TFEU
(ex Article 55 TEC)
The provisions of Articles 51 to 54 shall apply to the matters covered by this Chapter.
***
The IGC 2007 made no specific amendments to Article 55 TEC, but the provision and its referrals are renumbered. Cf. OJ 17.12.2007 C 306/55.
***
For the convenience of those who want to use the current TEC, we present the provision with the ones it refers to (from the latest consolidated version of the existing treaties, OJ 29.12.2006 C 321 E/63):
Article 55 TEC
The provisions of Articles 45 to 48 shall apply to the matters covered by this Chapter.
***
Article III-35 of the draft Treaty establishing a Constitution for Europe was essentially the same (OJ 18.7.2003 C 169/33):
Article III-35 Draft Constitution
Articles III-24 to III-27 shall apply to the matters covered by this Subsection.
***
Article III-150 of the Treaty establishing a Constitution for Europe followed the draft in style (OJ 16.12.2004 C 310/64):
Article III-150
Articles III-139 to III-142 shall apply to the matters covered by this Subsection.
***
No material change has been proposed during the reform cycle from the European Convention to the Treaty of Lisbon.
We have reached the last provision of Chapter 3 ‘Services’ in order to find out that we are told to go back to Articles 51 to 54 TFEU in Chapter 2 ‘Right of establishment’ to get things right.
With those readers in mind, who do not have the amended provisions at hand, we present the texts here (TFEU consolidation, pages 89 and 90):
Article 51 TFEU
(ex 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 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 52 TFEU
(ex Article 46 TEC)
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the coordination of the abovementioned provisions.
Article 53 TFEU
(ex Article 47 TEC)
1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.
2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
Article 54 TFEU
(ex Article 48 TEC)
Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
"Companies or firms" means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.
***
We see that some of the derogations (exceptions) from the right of establishment apply to the free movement of services: the exercise of public authority and the grounds of public policy, public security or public health.
There are legal bases for legislation and there is the principle of equal treatment of companies.
For a closer look, se for instance Chapter 22 ‘Freedom of establishment and to provide services’ in Paul Craig and Gráinne de Búrca: EU Law, Text, Cases, and Materials (Oxford University Press, 4th Edition, 2007).
Ralf Grahn
Showing posts with label right of establishment. Show all posts
Showing posts with label right of establishment. Show all posts
Thursday, 17 April 2008
Thursday, 10 April 2008
EU TFEU: Equality for investors
The EU Treaty of Lisbon accords capital investors from other member states equal treatment with nationals of the state of the company or firm. This declaratory or clarifying provision, Article 294 of the Treaty establishing the European Community, is moved into a more logical context within the Treaty of Lisbon, but without added substance.
***
In the Treaty of Lisbon (ToL), point 55, the intergovernmental conference (IGC 2007) decided to shift the location of Article 294 of the Treaty establishing the European Community (TEC). See Official Journal, OJ, 17.12.2007 C 306/55:
55) An Article 48a shall be inserted, with the wording of Article 294.
***
Our first task is to look up Article 294 TEC, in the latest consolidated version of the treaties, TEU and TEC, in OJ 29.12.2006 C 321 E/173. We notice that the Article is located in TEC Part Six ‘General and final provisions’, and the contents are the following:
Article 294 TEC
Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 48, without prejudice to the application of the other provisions of this Treaty.
***
There is no express amendment of the wording and the only horizontal amendment is to replace ‘this Treaty’ by ‘the Treaties’ according to point 2(b)) in the Lisbon Treaty. We check the numbering in the original Lisbon Treaty and the renumbering for the coming consolidated versions of the provision and the referral, and we add the location of the provision within the treaty for ease of reading. The treaty itself is renamed the Treaty on the Functioning of the European Union (TFEU), and here is what the provision should look like:
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 48a TFEU (ToL), renumbered Article 55 TFEU
Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 48 [ToL, renumbered Article 54 TFEU], without prejudice to the application of the other provisions of the Treaties.
***
The European Convention initiated the tidying up exercise by placing the provision at the end of Subsection 2 ‘Freedom of establishment’, as Article III-28. Naturally, the preceding Article of the draft Treaty establishing a Constitution for Europe referred to was numbered differently and it spoke of the other provisions of the Constitution, but the contents remained the same (OJ 18.7.2003 C 169/33).
***
The IGC 2004 followed the lead of the draft Constitution in every aspect save one. The Treaty establishing a Constitution for Europe limited its referral to the second paragraph of the preceding Article (OJ 16.12.2004 C 310/63):
Article III-143 Constitution
Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of the second paragraph of Article III-142, without prejudice to the application of the other provisions of the Constitution.
***
In other words, the IGC 2007 followed the lead of the European Convention in finding more amenable surroundings for the Article, but by taking over the wording of the present TEC it did not follow the Constitutional Treaty in referring only to the second paragraph of the preceding Article.
***
We can easily agree with the conclusion in the ‘Comparative table of the current EC and EU Treaties as amended by the Treaty of Lisbon (Cm 7311; page 8) about Article 55 TFEU (Article 48a ToL): In substance the same as Article 294 TEC.
But we would like to offer a few hints to the readers who want to know what the present (and future) provision might mean in practice.
Not much, it seems. The principle of equal treatment for capital investors follows from other treaty provisions, so the Article is only declaratory. I quote Rudolf Streinz, EUV/EGV, Vertrag über die Europäische Union und Vertrag zur Gründung der Europäischen Gemeinschaft (Verlag C.H. Beck, München 2003; page 2434):
„Art. 294 EGV hat heute keine praktische Bedeutung mehr. Bestenfalls kann der Vorschrift klarstellende Bedeutung zukommen, dass nicht nur die Gründung und Leitung von Unternehmen (vgl. Art. 43 EGV), sondern auch das Halten einer Beteiligung unter die Freiheitsberechtigungen des Vertrages fallen. In seinem persönlichen und sachlichen Anwendungsbereich ist Art. 294 EGV aber subsidiär gegenüber den Grundfreiheiten. Die dem sachlichen Anwendungsbereich nach relevante Niederlassungsfreiheit und die Kapitalverkehrsfreiheit gehen zudem über den Gewährleistungsinhalt des Art. 294 EGV hinaus, weil sie nicht nur Diskriminierungen nach der Staatsangehörigkeit, sondern jegliche Beschränkung verbieten.“
In other words, other provisions on free movement cater for this and more. In due time, we are going to look at the provisions with relevance.
Ralf Grahn
***
In the Treaty of Lisbon (ToL), point 55, the intergovernmental conference (IGC 2007) decided to shift the location of Article 294 of the Treaty establishing the European Community (TEC). See Official Journal, OJ, 17.12.2007 C 306/55:
55) An Article 48a shall be inserted, with the wording of Article 294.
***
Our first task is to look up Article 294 TEC, in the latest consolidated version of the treaties, TEU and TEC, in OJ 29.12.2006 C 321 E/173. We notice that the Article is located in TEC Part Six ‘General and final provisions’, and the contents are the following:
Article 294 TEC
Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 48, without prejudice to the application of the other provisions of this Treaty.
***
There is no express amendment of the wording and the only horizontal amendment is to replace ‘this Treaty’ by ‘the Treaties’ according to point 2(b)) in the Lisbon Treaty. We check the numbering in the original Lisbon Treaty and the renumbering for the coming consolidated versions of the provision and the referral, and we add the location of the provision within the treaty for ease of reading. The treaty itself is renamed the Treaty on the Functioning of the European Union (TFEU), and here is what the provision should look like:
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 48a TFEU (ToL), renumbered Article 55 TFEU
Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 48 [ToL, renumbered Article 54 TFEU], without prejudice to the application of the other provisions of the Treaties.
***
The European Convention initiated the tidying up exercise by placing the provision at the end of Subsection 2 ‘Freedom of establishment’, as Article III-28. Naturally, the preceding Article of the draft Treaty establishing a Constitution for Europe referred to was numbered differently and it spoke of the other provisions of the Constitution, but the contents remained the same (OJ 18.7.2003 C 169/33).
***
The IGC 2004 followed the lead of the draft Constitution in every aspect save one. The Treaty establishing a Constitution for Europe limited its referral to the second paragraph of the preceding Article (OJ 16.12.2004 C 310/63):
Article III-143 Constitution
Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of the second paragraph of Article III-142, without prejudice to the application of the other provisions of the Constitution.
***
In other words, the IGC 2007 followed the lead of the European Convention in finding more amenable surroundings for the Article, but by taking over the wording of the present TEC it did not follow the Constitutional Treaty in referring only to the second paragraph of the preceding Article.
***
We can easily agree with the conclusion in the ‘Comparative table of the current EC and EU Treaties as amended by the Treaty of Lisbon (Cm 7311; page 8) about Article 55 TFEU (Article 48a ToL): In substance the same as Article 294 TEC.
But we would like to offer a few hints to the readers who want to know what the present (and future) provision might mean in practice.
Not much, it seems. The principle of equal treatment for capital investors follows from other treaty provisions, so the Article is only declaratory. I quote Rudolf Streinz, EUV/EGV, Vertrag über die Europäische Union und Vertrag zur Gründung der Europäischen Gemeinschaft (Verlag C.H. Beck, München 2003; page 2434):
„Art. 294 EGV hat heute keine praktische Bedeutung mehr. Bestenfalls kann der Vorschrift klarstellende Bedeutung zukommen, dass nicht nur die Gründung und Leitung von Unternehmen (vgl. Art. 43 EGV), sondern auch das Halten einer Beteiligung unter die Freiheitsberechtigungen des Vertrages fallen. In seinem persönlichen und sachlichen Anwendungsbereich ist Art. 294 EGV aber subsidiär gegenüber den Grundfreiheiten. Die dem sachlichen Anwendungsbereich nach relevante Niederlassungsfreiheit und die Kapitalverkehrsfreiheit gehen zudem über den Gewährleistungsinhalt des Art. 294 EGV hinaus, weil sie nicht nur Diskriminierungen nach der Staatsangehörigkeit, sondern jegliche Beschränkung verbieten.“
In other words, other provisions on free movement cater for this and more. In due time, we are going to look at the provisions with relevance.
Ralf Grahn
Wednesday, 9 April 2008
EU TFEU: Right of establishment for companies and firms
It looks quite harmless: Companies and firms are offered the same freedom of establishment as natural persons within the European Community (European Union).
News and debate tend to focus on (unexpected) change, but the EU’s Treaty of Lisbon is as important for what it preserves, like the equal treatment of commercial companies.
First, we look at the treaty reform cycle from the current Treaty establishing the European Community, via the draft Constitution and the Constitutional Treaty to the Lisbon Treaty. Then, we give a few hints on further reading, which show that seemingly boring and inoffensive provisions are anything but that from the viewpoint of enterprises and tax authorities.
***
When we reach Article 48 of the Treaty establishing the European Community (TEC), we see that the intergovernmental conference (IGC 2007) makes no express amendment in the Treaty of Lisbon (ToL) to what is to become the Treaty on the Functioning of the European Union (TFEU). Cf. Official Journal, OJ 17.12.2007 C 306/55.
***
We find Article 48 TEC in force in the latest consolidated version of the treaties, TEU and TEC, OJ 29.12.2006 C 321 E/61:
Article 48 TEC
Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.
***
There is no express amendment and only one horizontal one (‘Community’ replaced by ‘Union’ according to point 2(a)) in the Lisbon Treaty. We check the numbering in the original Lisbon Treaty and the renumbering for the coming consolidated versions, and we add the location of the provision within the treaty for ease of reading. Here is the ‘new’ Article:
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 48 TFEU (ToL), renumbered Article 54 TFEU
Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.
***
The European Convention inserted the word ‘Union’ instead of ‘Community’, and ‘Chapter’ was called ‘Subsection’, but there was no material difference between Article III-27 of the draft Treaty establishing a Constitution for Europe and the current TEC provision, and even one formal difference less as regards the ToL TFEU (OJ 18.7.2003 C 169/32-33).
***
Article III-142 of the Treaty establishing a Constitution for Europe took over the draft text word for word (OJ 16.12.2004 C 310/62).
***
After the anodyne statements above, one could easily believe that freedom of establishment for companies is an inoffensive continuation of the principles concerning humans (natural persons), so a few references to actual tensions may be in order.
For further reading available on the web concerning the freedom of establishment as regards companies and firms, you could turn to Nicole Rothe: Freedom of establishment of legal persons within the European Union: An analysis of the European Court of Justice decision in the Überseering case; Case C-208/00:
https://www.wcl.american.edu/journal/lawrev/53/rothe.pdf?rd=1
KPMG’s Euro Tax Flash Issuue 37, 12 September 2006, comments on ‘ECJ decision in Cadbury Schweppes Case (C-196/04):
http://kpmgbe.lcc.ch/dbfetch/52616e646f6d49561b7f558b02435e7dd48a4524c074812ef9097bad01a90f9f/euro_tax_flash_2006_09_12_2.pdf
Frank Muntendam, of Ernst & Young, commented on the Cadbury Schweppes case ‘The end of CFC legislation in Europe?’:
http://www.ey.com/global/content.nsf/Luxembourg_E/Question:_The_end_of_CFC_legislation_in_Europe
A fresh overview is offered by Federico M. Mucciarelli in ‘Companies’ Emigration and EC Freedom of Establishment (15 October 2007):
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1078407#PaperDownload
Ralf Grahn
News and debate tend to focus on (unexpected) change, but the EU’s Treaty of Lisbon is as important for what it preserves, like the equal treatment of commercial companies.
First, we look at the treaty reform cycle from the current Treaty establishing the European Community, via the draft Constitution and the Constitutional Treaty to the Lisbon Treaty. Then, we give a few hints on further reading, which show that seemingly boring and inoffensive provisions are anything but that from the viewpoint of enterprises and tax authorities.
***
When we reach Article 48 of the Treaty establishing the European Community (TEC), we see that the intergovernmental conference (IGC 2007) makes no express amendment in the Treaty of Lisbon (ToL) to what is to become the Treaty on the Functioning of the European Union (TFEU). Cf. Official Journal, OJ 17.12.2007 C 306/55.
***
We find Article 48 TEC in force in the latest consolidated version of the treaties, TEU and TEC, OJ 29.12.2006 C 321 E/61:
Article 48 TEC
Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.
***
There is no express amendment and only one horizontal one (‘Community’ replaced by ‘Union’ according to point 2(a)) in the Lisbon Treaty. We check the numbering in the original Lisbon Treaty and the renumbering for the coming consolidated versions, and we add the location of the provision within the treaty for ease of reading. Here is the ‘new’ Article:
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 48 TFEU (ToL), renumbered Article 54 TFEU
Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.
***
The European Convention inserted the word ‘Union’ instead of ‘Community’, and ‘Chapter’ was called ‘Subsection’, but there was no material difference between Article III-27 of the draft Treaty establishing a Constitution for Europe and the current TEC provision, and even one formal difference less as regards the ToL TFEU (OJ 18.7.2003 C 169/32-33).
***
Article III-142 of the Treaty establishing a Constitution for Europe took over the draft text word for word (OJ 16.12.2004 C 310/62).
***
After the anodyne statements above, one could easily believe that freedom of establishment for companies is an inoffensive continuation of the principles concerning humans (natural persons), so a few references to actual tensions may be in order.
For further reading available on the web concerning the freedom of establishment as regards companies and firms, you could turn to Nicole Rothe: Freedom of establishment of legal persons within the European Union: An analysis of the European Court of Justice decision in the Überseering case; Case C-208/00:
https://www.wcl.american.edu/journal/lawrev/53/rothe.pdf?rd=1
KPMG’s Euro Tax Flash Issuue 37, 12 September 2006, comments on ‘ECJ decision in Cadbury Schweppes Case (C-196/04):
http://kpmgbe.lcc.ch/dbfetch/52616e646f6d49561b7f558b02435e7dd48a4524c074812ef9097bad01a90f9f/euro_tax_flash_2006_09_12_2.pdf
Frank Muntendam, of Ernst & Young, commented on the Cadbury Schweppes case ‘The end of CFC legislation in Europe?’:
http://www.ey.com/global/content.nsf/Luxembourg_E/Question:_The_end_of_CFC_legislation_in_Europe
A fresh overview is offered by Federico M. Mucciarelli in ‘Companies’ Emigration and EC Freedom of Establishment (15 October 2007):
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1078407#PaperDownload
Ralf Grahn
Tuesday, 8 April 2008
EU TFEU: Mutual recognition of diplomas
The recognition of diplomas and professional qualifications is important for self-employed (and employed) persons to seize EU-wide opportunities to establish themselves outside their country of origin.
Overcoming obstacles to mobility leads to a better match between the supply and the demand for professional services, bringing gains to individuals as well as the receiving country.
We look at the current Treaty establishing the European Community, the following steps during the treaty reform process – the draft Constitution and the Constitutional Treaty – and the wording of the Treaty of Lisbon undergoing ratification.
Because the right of establishment and the recognition of diplomas potentially concern huge numbers of European Union citizens, there are a few hints on further reading for those who want to gain a basic understanding and an additional link for people with a concrete interest to find out where they stand (or where their education might lead).
***
What does the Treaty of Lisbon (ToL) do to Article 47 of the Treaty establishing the European Community (TEC)? The intergovernmental conference (IGC 2007) decided on the following express amendments in what becomes the Treaty on the Functioning of the European Union (TFEU), as you can see in the Official Journal, OJ, 17.12.2007 C 306/55:
54) Article 47 shall be amended as follows:
(a) the following phrase shall be added at the end of paragraph 1: ‘and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.’;
(b) paragraph 2 shall be deleted and paragraph 3 shall be renumbered 2; a change shall be made to the French which does not concern the English version.
***
Disconnected amendments like this serve two purposes of the student of EU law. First, they invite us to read the treaties still in force. Second, since attaining 27 national ratifications on any substantial treaty reform is less than certain, reading the current provisions may mean that we study the future ones as well.
Anyway, we look at the current Article 47 TEC by retrieving it from the latest consolidated version of the existing treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/61:
Article 47 TEC
1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications.
2. For the same purpose, the Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self‑employed persons. The Council, acting unanimously throughout the procedure referred to in Article 251, shall decide on directives the implementation of which involves in at least one Member State amendment of the existing principles laid down by law governing the professions with respect to training and conditions of access for natural persons. In other cases the Council shall act by qualified majority.
3. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
***
We have the basic text and the express amendments. In addition, possible horizontal amendments here, the ordinary legislative procedure), the renumbering of the Article (Tables of equivalences) and the renumbering of referrals, if any (but here none), offer us the opportunity to construct the wording of the provision according to the Lisbon Treaty. The location of the Article (Tables of equivalences) is added to make it easier to remember the context. We should end up with the following consolidated Lisbon Treaty provision:
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 47 TFEU (ToL), renumbered Article 53 TFEU
1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.
2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
***
The latest span of treaty reform, from Nice to Lisbon, would be incomplete without a look at the European Convention and the IGC 2004.
First, Article III-26 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/32):
Article III-26 Draft Constitution
1. European framework laws shall make it easier for persons to take up and pursue activities as self-employed persons. It shall cover:
(a) the mutual recognition of diplomas, certificates and other evidence of formal qualifications;
(b) the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.
2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
***
The IGC 2004 replaced ‘it’ by ‘they’ in the first paragraph and added ‘of such professions’ in the second paragraph. Cf. OJ 16.12.2004 C 310/62.
In other words, already the draft Constitution abolished the Article 47(2) TEC requirement of unanimity in the Council regarding directives where the implementation involves in at least one Member State amendment of the existing principles laid down by law governing the professions with respect to training and conditions of access for natural persons.
***
Arguably, enhanced mobility is in the interest of EU citizens because it offers them new opportunities. In practice, fewer obstacles mean that it may be easier for a spouse to take up his or her profession if the family moves to another member state, and fewer cases of highly qualified people working as dishwashers. Added supply should work in favour of consumers, too.
Fifty years from the Treaty of Rome have shown that harmonisation requiring unanimity tends to turn into a bad joke, or at least quite cumbersome.
Abolishing the unanimity rule in a small but important question is a welcome step for individuals.
***
The Commission’s internal market directorate general presents a general background on the web page ‘Living and working in the Single Market’, with further links:
http://ec.europa.eu/internal_market/top_layer/index_15_en.htm
The Commission’s Scadplus pages offer a look more specifically aimed at ‘Recognition of qualifications: introduction’ (last update 7 March 2006):
http://europa.eu/scadplus/leg/en/cha/c00003d.htm
Introductory information is presented on the web page ‘Professional qualifications’, too:
http://ec.europa.eu/internal_market/top_layer/index_15_en.htm
***
Some readers may want more than an overview, for instance if they contemplate moving to another country within the European Economic Area (EEA).
The most important piece of secondary legislation is Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (Text with EEA relevance), OJ 30.9.2005 L 255/22.
Despite or by virtue of its 120 pages, including detailed annexes, the directive may be of interest to considerable numbers of Europeans. The directive replaces the bulk of earlier secondary legislation on professional qualifications, and the new framework is in force since 20 October 2007:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:255:0022:0142:EN:PDF
Ralf Grahn
Overcoming obstacles to mobility leads to a better match between the supply and the demand for professional services, bringing gains to individuals as well as the receiving country.
We look at the current Treaty establishing the European Community, the following steps during the treaty reform process – the draft Constitution and the Constitutional Treaty – and the wording of the Treaty of Lisbon undergoing ratification.
Because the right of establishment and the recognition of diplomas potentially concern huge numbers of European Union citizens, there are a few hints on further reading for those who want to gain a basic understanding and an additional link for people with a concrete interest to find out where they stand (or where their education might lead).
***
What does the Treaty of Lisbon (ToL) do to Article 47 of the Treaty establishing the European Community (TEC)? The intergovernmental conference (IGC 2007) decided on the following express amendments in what becomes the Treaty on the Functioning of the European Union (TFEU), as you can see in the Official Journal, OJ, 17.12.2007 C 306/55:
54) Article 47 shall be amended as follows:
(a) the following phrase shall be added at the end of paragraph 1: ‘and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.’;
(b) paragraph 2 shall be deleted and paragraph 3 shall be renumbered 2; a change shall be made to the French which does not concern the English version.
***
Disconnected amendments like this serve two purposes of the student of EU law. First, they invite us to read the treaties still in force. Second, since attaining 27 national ratifications on any substantial treaty reform is less than certain, reading the current provisions may mean that we study the future ones as well.
Anyway, we look at the current Article 47 TEC by retrieving it from the latest consolidated version of the existing treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/61:
Article 47 TEC
1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications.
2. For the same purpose, the Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self‑employed persons. The Council, acting unanimously throughout the procedure referred to in Article 251, shall decide on directives the implementation of which involves in at least one Member State amendment of the existing principles laid down by law governing the professions with respect to training and conditions of access for natural persons. In other cases the Council shall act by qualified majority.
3. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
***
We have the basic text and the express amendments. In addition, possible horizontal amendments here, the ordinary legislative procedure), the renumbering of the Article (Tables of equivalences) and the renumbering of referrals, if any (but here none), offer us the opportunity to construct the wording of the provision according to the Lisbon Treaty. The location of the Article (Tables of equivalences) is added to make it easier to remember the context. We should end up with the following consolidated Lisbon Treaty provision:
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 47 TFEU (ToL), renumbered Article 53 TFEU
1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.
2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
***
The latest span of treaty reform, from Nice to Lisbon, would be incomplete without a look at the European Convention and the IGC 2004.
First, Article III-26 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/32):
Article III-26 Draft Constitution
1. European framework laws shall make it easier for persons to take up and pursue activities as self-employed persons. It shall cover:
(a) the mutual recognition of diplomas, certificates and other evidence of formal qualifications;
(b) the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.
2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.
***
The IGC 2004 replaced ‘it’ by ‘they’ in the first paragraph and added ‘of such professions’ in the second paragraph. Cf. OJ 16.12.2004 C 310/62.
In other words, already the draft Constitution abolished the Article 47(2) TEC requirement of unanimity in the Council regarding directives where the implementation involves in at least one Member State amendment of the existing principles laid down by law governing the professions with respect to training and conditions of access for natural persons.
***
Arguably, enhanced mobility is in the interest of EU citizens because it offers them new opportunities. In practice, fewer obstacles mean that it may be easier for a spouse to take up his or her profession if the family moves to another member state, and fewer cases of highly qualified people working as dishwashers. Added supply should work in favour of consumers, too.
Fifty years from the Treaty of Rome have shown that harmonisation requiring unanimity tends to turn into a bad joke, or at least quite cumbersome.
Abolishing the unanimity rule in a small but important question is a welcome step for individuals.
***
The Commission’s internal market directorate general presents a general background on the web page ‘Living and working in the Single Market’, with further links:
http://ec.europa.eu/internal_market/top_layer/index_15_en.htm
The Commission’s Scadplus pages offer a look more specifically aimed at ‘Recognition of qualifications: introduction’ (last update 7 March 2006):
http://europa.eu/scadplus/leg/en/cha/c00003d.htm
Introductory information is presented on the web page ‘Professional qualifications’, too:
http://ec.europa.eu/internal_market/top_layer/index_15_en.htm
***
Some readers may want more than an overview, for instance if they contemplate moving to another country within the European Economic Area (EEA).
The most important piece of secondary legislation is Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (Text with EEA relevance), OJ 30.9.2005 L 255/22.
Despite or by virtue of its 120 pages, including detailed annexes, the directive may be of interest to considerable numbers of Europeans. The directive replaces the bulk of earlier secondary legislation on professional qualifications, and the new framework is in force since 20 October 2007:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:255:0022:0142:EN:PDF
Ralf Grahn
Monday, 7 April 2008
EU TFEU: Public policy, public security and public health exceptions
‘Public policy, public security or public health’ form a potent formula for exceptions concerning the fundamental principles of free movement, citizenship rights, freedom to provide services and freedom of establishment within the European Community (European Union).
Here we look at the exemptions in the light of the present Treaty establishing the European Community and the coming Treaty on the Functioning of the European Union (Treaty of Lisbon), with a glance towards the draft Constitution and the Constitutional Treaty along the route.
The concrete provision we deal with concerns these exceptions in the context of the freedom of establishment, but often more than one of the rights and freedoms occur in the same case.
A few hints on further reading follow, meant to facilitate understanding of the system and strict interpretation of derogations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) made no specific amendments to Article 46 of the Treaty establishing the European Community (TEC). Cf. Official Journal, OJ, 17.12.2007 C 306/54-55.
***
The latest consolidated version of the existing treaties, TEU and TEC, presents Article 46 TEC as it now stands (OJ 29.12.2006 C 321 E/61):
Article 46 TEC
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the abovementioned provisions.
***
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 (here none), horizontal amendments (here one), renumbering of the provision (yes) and renumbering of possible referrals (here none).
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 46 TFEU (ToL), renumbered Article 52 TFEU
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the coordination of the abovementioned provisions.
***
The European Convention changed just enough of the wording in Article III-25 of the draft Treaty establishing a Constitution for Europe to merit repeating, but without changing anything of substance (OJ 18.7.2003 C 169/32):
Article III-25 Draft Constitution
1. This Subsection and measures adopted in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action in Member States providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. European framework laws shall coordinate the national provisions referred to in paragraph 1.
***
The IGC 2004 adopted the draft text unchanged in Article III-140 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/62).
***
The IGC 2007 followed the adage ‘If it ain’t broke, don’t fix it’, thus preserving the current wording (with the one technical or horizontal amendment concerning the ordinary legislative procedure).
***
The Commission’s internal market web pages on services offer an introductory page ‘General principles: Freedom to provide services / Freedom of establishment’ (last update 28 January 2008):
http://ec.europa.eu/internal_market/services/principles_en.htm
There is a link to a 112 page ‘Guide to the Case Law of the European Court of Justice on Articles 43 et seq. EC Treaty: Freedom of Establishment’, from 1 January 2001, but with an update promised shortly:
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
Available on the web you can find the following:
J.H.H. Weiler and Martina Kocjan: The Law of the European Union, Teaching Material, The Internal Market: Freedom to Provide Services, Freedom of Establishment (NYU School of Law 2004/2005; 72 pages):
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
A detailed study is:
Markku Kiikeri: The Freedom of Establishment in the European Union, Report to the Finnish Ministry of Trade and Industry, 2002 (133 pages + Annexes XIX pages):
http://www.helsinki.fi/publaw/opiskelu/Eurooppaoikeus/Sijoittautumistutkimus.englanti.Kiikeri.pdf
These materials offer a fair grounding in the fundamental questions regarding the freedom of establishment, leaving only the latest developments of secondary legislation and case law to be unearthed by the reader.
Ralf Grahn
P.S. Both the draft Constitution and the Constitutional Treaty were published quickly, and they were already 'consolidated versions'. We have to go back to the ill-fated Treaty of Nice to find a treaty published in a consolidated version only after entering into force.
Some would argue that a few things have happened in net publishing since 2001.
Anyway, a long wait seems to draw to a close, when the consolidated Lisbon Treaty is published 15 April 2008, and in book form 9 May 2008 (Europe day).
Here we look at the exemptions in the light of the present Treaty establishing the European Community and the coming Treaty on the Functioning of the European Union (Treaty of Lisbon), with a glance towards the draft Constitution and the Constitutional Treaty along the route.
The concrete provision we deal with concerns these exceptions in the context of the freedom of establishment, but often more than one of the rights and freedoms occur in the same case.
A few hints on further reading follow, meant to facilitate understanding of the system and strict interpretation of derogations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) made no specific amendments to Article 46 of the Treaty establishing the European Community (TEC). Cf. Official Journal, OJ, 17.12.2007 C 306/54-55.
***
The latest consolidated version of the existing treaties, TEU and TEC, presents Article 46 TEC as it now stands (OJ 29.12.2006 C 321 E/61):
Article 46 TEC
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the abovementioned provisions.
***
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 (here none), horizontal amendments (here one), renumbering of the provision (yes) and renumbering of possible referrals (here none).
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 46 TFEU (ToL), renumbered Article 52 TFEU
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the coordination of the abovementioned provisions.
***
The European Convention changed just enough of the wording in Article III-25 of the draft Treaty establishing a Constitution for Europe to merit repeating, but without changing anything of substance (OJ 18.7.2003 C 169/32):
Article III-25 Draft Constitution
1. This Subsection and measures adopted in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action in Member States providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. European framework laws shall coordinate the national provisions referred to in paragraph 1.
***
The IGC 2004 adopted the draft text unchanged in Article III-140 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/62).
***
The IGC 2007 followed the adage ‘If it ain’t broke, don’t fix it’, thus preserving the current wording (with the one technical or horizontal amendment concerning the ordinary legislative procedure).
***
The Commission’s internal market web pages on services offer an introductory page ‘General principles: Freedom to provide services / Freedom of establishment’ (last update 28 January 2008):
http://ec.europa.eu/internal_market/services/principles_en.htm
There is a link to a 112 page ‘Guide to the Case Law of the European Court of Justice on Articles 43 et seq. EC Treaty: Freedom of Establishment’, from 1 January 2001, but with an update promised shortly:
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
Available on the web you can find the following:
J.H.H. Weiler and Martina Kocjan: The Law of the European Union, Teaching Material, The Internal Market: Freedom to Provide Services, Freedom of Establishment (NYU School of Law 2004/2005; 72 pages):
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
A detailed study is:
Markku Kiikeri: The Freedom of Establishment in the European Union, Report to the Finnish Ministry of Trade and Industry, 2002 (133 pages + Annexes XIX pages):
http://www.helsinki.fi/publaw/opiskelu/Eurooppaoikeus/Sijoittautumistutkimus.englanti.Kiikeri.pdf
These materials offer a fair grounding in the fundamental questions regarding the freedom of establishment, leaving only the latest developments of secondary legislation and case law to be unearthed by the reader.
Ralf Grahn
P.S. Both the draft Constitution and the Constitutional Treaty were published quickly, and they were already 'consolidated versions'. We have to go back to the ill-fated Treaty of Nice to find a treaty published in a consolidated version only after entering into force.
Some would argue that a few things have happened in net publishing since 2001.
Anyway, a long wait seems to draw to a close, when the consolidated Lisbon Treaty is published 15 April 2008, and in book form 9 May 2008 (Europe day).
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.
Friday, 4 April 2008
EU TFEU: Right of establishment
Are you interested in working as a self-employed person, setting up shop in another EU country? Do you manage an agency, a branch or a subsidiary in another member state of the European Union?
The right of establishment, also known as the freedom of establishment, is an expression of the principle of free movement within the internal market.
The EU’s Treaty of Lisbon preserves your right of establishment on equal grounds.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) has nothing substantial to say about Article 43 of the Treaty establishing the European Community (TEC). Cf. OJ 17.12.2007 C 306/54.
***
Unchanged does not mean unimportant, so we turn to the latest consolidated version of the existing treaties, in 29.12.2006 C 321 E/59:
CHAPTER 2
RIGHT OF ESTABLISHMENT
Article 43 TEC
Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.
***
Although there are no specific amendments, there are still details to check before we now for sure how the corresponding Article of the Treaty on the Functioning of the European Union (TFEU) is going to look according to the Lisbon Treaty.
The annexed Tables of equivalences tell us that we have arrived at a new chapter: Chapter 2 ‘Right of establishment’. They also tell us that Article 43 TEC first becomes Article 43 ToL, and later will be known under the new number Article 49 TFEU (17.12.2007 C 306/208).
As always, we have to watch out for possible horizontal amendments, mentioned on OJ 17.12.2007 C 306/41 and the following pages. (Here, there seem to be none.)
We notice a referral to another Article, which means that we have to check the numbering and that the referral remains substantially correct.
In order to make it easier to read this post on a stand-alone basis, we start by indicating the location of the Article (using the Tables of equivalences, OJ 17.12.2007 C 306/207-208).
***
Here is what the Article should look like, 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 43 TFEU (ToL), renumbered Article 49 TFEU
Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48 [ToL, renumbered Article 54 TFEU], under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.
***
In Article III-22 of the draft Treaty establishing a Constitution for Europe, the European spoke more directly to the potential entrepreneurs in the second subparagraph, without altering the substance of the provision (OJ 18.7.2003 C 169/32):
Subsection 2
Freedom of establishment
Article III-22 Draft Constitution
Within the framework of this Subsection, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Nationals of a Member State shall have the right, in the territory of another Member State, to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article III-27, under the conditions laid down for its own nationals by the law of the Member State where such establishment is effected, subject to the provisions of the Section relating to capital.
***
The IGC 2004 took over the draft text in Article III-137 of the Treaty establishing a Constitution for Europe, with only technical adjustments (OJ 16.12.2004 C 310/61).
***
Even more focused on institutional questions and economical concerning amendments without substantial impact, the IGC 2007 reverted to the current TEC text.
From a reader’s point of view it was not a ‘failed Constitution’. Only ratification failed, and as a result we lost a host of small improvements, too, ending up with two slightly less well adapted treaties than the whole one on offer a few years ago.
***
This time, instead of suggesting further reading from the web, I would like to recommend turning to a textbook on the subject of freedom of establishment. An alternative in English is:
Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law (Oxford University Press, Ninth Edition, 2006), pages 446 to 467.
Ralf Grahn
The right of establishment, also known as the freedom of establishment, is an expression of the principle of free movement within the internal market.
The EU’s Treaty of Lisbon preserves your right of establishment on equal grounds.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) has nothing substantial to say about Article 43 of the Treaty establishing the European Community (TEC). Cf. OJ 17.12.2007 C 306/54.
***
Unchanged does not mean unimportant, so we turn to the latest consolidated version of the existing treaties, in 29.12.2006 C 321 E/59:
CHAPTER 2
RIGHT OF ESTABLISHMENT
Article 43 TEC
Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.
***
Although there are no specific amendments, there are still details to check before we now for sure how the corresponding Article of the Treaty on the Functioning of the European Union (TFEU) is going to look according to the Lisbon Treaty.
The annexed Tables of equivalences tell us that we have arrived at a new chapter: Chapter 2 ‘Right of establishment’. They also tell us that Article 43 TEC first becomes Article 43 ToL, and later will be known under the new number Article 49 TFEU (17.12.2007 C 306/208).
As always, we have to watch out for possible horizontal amendments, mentioned on OJ 17.12.2007 C 306/41 and the following pages. (Here, there seem to be none.)
We notice a referral to another Article, which means that we have to check the numbering and that the referral remains substantially correct.
In order to make it easier to read this post on a stand-alone basis, we start by indicating the location of the Article (using the Tables of equivalences, OJ 17.12.2007 C 306/207-208).
***
Here is what the Article should look like, 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 43 TFEU (ToL), renumbered Article 49 TFEU
Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48 [ToL, renumbered Article 54 TFEU], under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.
***
In Article III-22 of the draft Treaty establishing a Constitution for Europe, the European spoke more directly to the potential entrepreneurs in the second subparagraph, without altering the substance of the provision (OJ 18.7.2003 C 169/32):
Subsection 2
Freedom of establishment
Article III-22 Draft Constitution
Within the framework of this Subsection, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Nationals of a Member State shall have the right, in the territory of another Member State, to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article III-27, under the conditions laid down for its own nationals by the law of the Member State where such establishment is effected, subject to the provisions of the Section relating to capital.
***
The IGC 2004 took over the draft text in Article III-137 of the Treaty establishing a Constitution for Europe, with only technical adjustments (OJ 16.12.2004 C 310/61).
***
Even more focused on institutional questions and economical concerning amendments without substantial impact, the IGC 2007 reverted to the current TEC text.
From a reader’s point of view it was not a ‘failed Constitution’. Only ratification failed, and as a result we lost a host of small improvements, too, ending up with two slightly less well adapted treaties than the whole one on offer a few years ago.
***
This time, instead of suggesting further reading from the web, I would like to recommend turning to a textbook on the subject of freedom of establishment. An alternative in English is:
Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law (Oxford University Press, Ninth Edition, 2006), pages 446 to 467.
Ralf Grahn
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