THE EU INTERNAL MARKET

1
THE EU INTERNAL MARKET

• Michele Colucci
• E-mailinfo_at_colucci.eu
• Web site www.colucci.eu
• Lessius, Antwerp
• Academic year 2010-2011

2
Article 2 EC

• A common market and an economic and monetary
  union
• A harmonious, balanced and sustainable
  development of economic activities
• A high level of employment and of social
  protection,
• Equality between men and women,
• Sustainable and non-inflationary growth,
• A high degree of competitiveness and convergence
  of economic performance,
• A high level of protection and improvement of the
  quality of the environment,
• The raising of the standard of living and quality
  of life, and economic and social cohesion and
  solidarity among Member States.

3
EU as a Custom Union

• Internal section - regulation of intra-Community
  trade
• Elimination of custom duties and charges
• Elimination of internal borders to facilitate
  four freedoms
• External section - regulation of trade with third
  countries
• common custom tariffs
• common commercial policy.

4
DECISION MAKING IN THE INTERNAL MARKET

• Co-decision procedure
• The unanimous decision

5
THE FOUNDATIONS OF FREE MOVEMENT

• The principle of non-discrimination (Art. 12
  TEC)
• Any discrimination on grounds of nationality is
  prohibited.
• 2. Mutual recognition
• legislation of another Member State is equivalent
  in its effects to domestic legislation
• 3. Community legislation (in addition to the
  principle of mutual recognition)

6
FOUR FREEDOMS

• 1. Freedom of movement for persons
• 2. Freedom of movement for services
• 3. Freedom of movement for capitals
• 4. Freedom of movement for goods

7
EC TREATY AND EU CITIZENSHIP

• Every person holding the nationality of a Member
  State shall be a citizen of the Union. (art. 17
  EC).
• Every citizen of the Union shall have the right
  to move and reside freely within the territory
• of the Member States, subject to the limitations
  and conditions laid down in this Treaty and by
  the measures adopted to give it effect.
• (art. 18 CE).

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FREE MOVEMENT OF WORKERS

• Artt.39 - 42 EC. Workers have the right to
• accept offers of employment actually made
• move freely within the territory of Member States
  for this purpose
• to stay in a Member State for the purpose of
  employment
• to remain in the territory of a Member State
  after having been employed in that State.

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THE EC TREATY

• Self employed persons
• Right of establishment(artt. 43-48 EC) and
• Freedom to provide services (artt. 49-55 EC)
• the right to take up and pursue activities as
  self-employed persons and to set up and manage
  undertakings .

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CASE LAW OF ECJ evolution

• Definition of worker
• A PERSON PERFORMS SERVICES OF SOME ECONOMIC VALUE
  FOR AND UNDER THE DIRECTION OF ANOTHER PERSON IN
  RETURN FOR WHICH HE RECEIVES REMUNERATION
  (Lawrie-Blum, C-66/85).
• Community meaning(Unger, C-75/63).
• Fundamental Principle broad interpretation
  (Levin, C-53/81).
• Exceptions and derogations strict interpretation
  (Kempf,C-139/85).

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EQUAL TREATMENT

• BAN ON DIRECT DISCRIMINATIONS
• Art. 12 EC on the basis of nationality
• Art. 39 EC
• Access to employment
• Pay
• Employment conditions
• Association agreement, Co-operation agreement,
  and so on.
• SPORT Balog case, Simutenkov, case

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 COVERT DISCRIMINATIONS 

• NO  COVERT FORMS OF DISCRIMINATION which, by
  the application of other criteria of
  differentiation, lead in fact to the same result
  . (cause 152/73 Sotgiu)
• YES, only in case of  objective reasons 
  proportionality test!

13
THE UEFA HOMEGROWN PLAYER RULE

• THE UEFA HOMEGROWN PLAYER RULE
• Homegrown player trained by a club for 3 years
  when he is between 15 and 21 years old
• 2006/2007 4 up to 25
• 2007/2008 6 up to 25
• 2008/2009 8 up to 25
• No discrimination on the basis of nationality.

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Reverse discrimination

• National law v. EU law
• Different scope
• different goals
• EU Law does not apply to purely internal matters.

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Discriminatory act and limit to free movement

• Discriminatory act
• ordinary legislation,
• Collective bargaining agreements,
• Regulations of private associations,(Bosman,
• C-415/93) FIFA, UEFA,
• Limits to free movement
• Public administration
• Public order and security
• Public health

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TERRITORIAL SCOPE

• The EUROPEAN UNION 27 Member States
• New scenario in the European Union Market the
  232 rule!

17
The case law of the ECJ

• Sport is subject to Community law in so far as
  it constitutes an economic activity within the
  meaning of Article 2 of the Treaty .
• Walrave case, C-36/74.
• Donà v. Montero case, C- 13/76(nationality
  clause).
• sports or economic activity?
• C-51/96 Deliège case, C-176/96, Lethonen case,
  Meca Medina case(doping).

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THE BOSMAN casecause C -415/93

• DAVID v. GOLIAH!
• Sport economic activity the end of transfer
  compensation
• Quid training ?
• The new FIFA regulations on Status and Transfer
  of Players

19
Freedom to provide services

• EC DIRECTIVE 2006/123/EC
• Goal is to achieve a genuine Internal Market in
  services
• A framework directive applying to wide-range of
  services
• Provisions on
• administrative simplification
• freedom of establishment
• freedom to provide services
• quality of services
• administrative co-operation

20
SCOPE

• Services
• Any self-employed economic activity which is
  normally provided for remuneration
• Providers established in a MS
• a natural person who is a national of a MS
• a legal person established in a MS
• Certain provisions in the Directive relate to
  recipients
• a natural person who is a national of a MS or who
  benefits from rights conferred upon him by
  Community acts
• a legal person established in a MS
• BUT.

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ACTIVITIES NOT COVERED

• Following activities are excluded from the scope
• non-economic services of general interest
• financial services
• electronic communication services and networks
• transport services and port services
• services of temporary work agencies
• health care services
• audiovisual and radio broadcasting services
• gambling activities
• activities which are connected with the exercise
  of official authority
• certain social services
• private security services
• services provided by notaries and bailiffs
• health care services
• audiovisual and radio broadcasting services
• gambling activities
• activities which are connected with the exercise
  of official authority
• certain social services
• private security services

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SIMPLIFICATION!!!!!

• MSs are obliged to examine all procedures and
  formalities applicable to access to a service
  activity and to the exercise thereof and, if
  needed, simplify them
• Points of single contact
• Procedures by electronic means

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FREEDOM OF ESTABLISHMENT

• Actual pursuit of an economic activity for an
  indefinite period and through a stable
  infrastructure
• Provisions relating to
• authorisation schemes
• forbidden requirements which must be abolished
• requirements which must evaluated and in certain
  cases abolished or replaced by less restrictive
  means

24
Freedom to provide services

• Characterised by the absence of a stable and
  continuous participation in the economic life of
  the host MS
• MSs are obliged to abstain from imposing their
  own requirements on incoming service providers,
  except
• where justified by reasons of public policy,
  public security, public health or the protection
  of environment
• legislation in question is covered by derogations
  provided for in Article 17
• case-by-case measures relating to the safety of
  services

25
Quality of services

• Information on providers, their services and the
  settlement of disputes
• Professional liability insurance and guarantees
• Commercial communications by the regulated
  professions
• Multidisciplinary activities

26
AUTHORISATION SCHEMES AND REQUIREMENTS

• Authorisation schemes are allowed only on certain
  conditions
• non-discriminative
• the need for authorisation is justified by an
  overriding reason relating to the public interest
• proportionality
• Requirements are set for
• conditions of the authorisations
• the duration of the authorisations
• authorisation procedures

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FORBIDDEN REQUIREMENTS

• Forbidden requirements
• nationality requirements for the provider, his
  staff, shareholders or members of the management
  or supervisory bodies
• a requirement to be resident in the territory of
  that MS
• a prohibition on having several establishments
• restrictions on choosing between a principal or a
  secondary establishment or between different
  forms of secondary establishments

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OTHER FORBIDDEN REQUIREMENTS

• conditions of reciprocity
• economic tests
• the involvement of competing operators in the
  decisions of competent authorities
• obligation to have financial guarantees or
  insurances from the MS in question
• an obligation to have been previously registered
  or to have previously exercised the activity in
  the MSs in question

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OTHER REQUIREMENTS

• Requirements subject to evaluation
• quantitative or territorial restrictions
• obligation for the service provider to take a
  specific legal form
• requirements relating to the shareholding of
  companies
• requirements reserving the provision of certain
  services to specific providers

30
OTHER REQUIREMENTS

• bans on having more than one establishment in the
  territory of the same MS
• obligations to have a minimum number of employees
• obligations to apply fixed minimum or maximum
  tariffs
• obligation on the provider to supply other
  specific services jointly with his service

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FREE MOVEMENT OF CAPITALS

• Conclusions of the Madrid European Council on 26
  and 27 June 1989
• the Liberalization of Capital Movements
  Corresponds to the First Stage of Economic and
  Monetary Union .
• Necessary to take Full Advantage of the Benefits
  of the Single Market.
• But ...Possibility of
• Restrictions
• Safeguard Measures (for security and foreign
  policy reasons

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FREE MOVEMENT OF GOODS

• Article 14 EC
• The EC shall establish an internal market as an
  area without internal frontiers, in which the
  free movement of goods, persons, services and
  capital is ensured in accordance with the Treaty

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Obstacles to Inter-State Movement of Goods
Recognized in the Treaty

• Custom duties and charges having equivalent
  effect (Art. 23-25)) duties on border crossing
  and any other charges with equivalent effect
• Discriminatory taxation (Art. 90) taxes in
  excess of tax for similar domestic products
• Quantitative restrictions on imports and exports
  (quotas) and all measures having equivalent
  effect (Art. 28, 29) MEE could be any public and
  private measure, including law, an internal
  regulation, decisions of a judge or a court,
  administrative rules and regulations giving
  discretion to discriminate (Irish Souvenirs case
  249/81)

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Quantitative Restrictions and MEE(Articles 28
and 29 TEC)

• Quantitative restrictions explicit restrictions
  such as quotas
• MEE implicit restrictions such as a duty to
  obtain a licence to import or export
• Procureur du Roi v. Dassonville (case 8/74)
• All trading rules enacted by MS which are
  capable of hindering, directly or indirectly,
  actually or potentially, intra-Community trade
  are to be considered as measures having an effect
  equivalent to quantitative restrictions para.
  5
• Rule of reason In the absence of a Community
  systemif a MS takes measures to prevent unfair
  practicesit is subject to the condition that
  these measures should be reasonable para. 6

35
Categories of Measures Possibly Caught in
Violation of Art. 28 by the Dassonville Formula

• 1. Discriminatory measures on the ground of
  nationality
• 2. Indistinctly applicable measures so-called
  product requirements, related to the production
  and marketing of goods that apply without
  distinction to both foreign and domestic goods
  but it is usually more burdensome for foreign
  companies/goods (Casis de Dijon case 120/78)
• 3. Selling arrangements category created by
  Keck case C-267/91 related to socio-economic
  measures as to how goods should be sold (manner
  of sale)

36
Cassis Principles

• 1. The Rule of Reason
• Certain measures, even if within Dassonville
  formula, will not breach Art. 28 if they are
  necessary (proportionality) to satisfy mandatory
  requirement (objective justification) relating in
  particular to the effectiveness of fiscal
  supervision, the protection of public health, the
  fairness of commercial transactions and the
  defence of the consumer
• 2. Mutual Recognition
• There is no valid reason why, provided that
  goods have been lawfully produced and marketed in
  one MS, they should not be introduced into any
  other MS

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Keck Proviso

• Selling arrangements are excluded from Article 28
  (Dassonville formula) as long as they affect in
  the same manner, in law and in fact, the sale of
  domestic products and of those from other MS
  para. 16

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Exceptions to Free Movement of Goods

• Public morality
• Public policy
• Public security
• Protection of health and life of humans, animals
  or plants
• Protection of national treasures possessing
  artistic, historic or archaeological value
• Protection of industrial and commercial property

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THE EU INTERNAL MARKET

• MYTH OR REALITY?
• Some personal experience...