11

THE EU INTERNAL MARKETTHE EU INTERNAL MARKET

Michele ColucciMichele Colucci

E-mail:E-mail:info@colucci.euinfo@colucci.euWeb site: Web site: www.colucci.euwww.colucci.eu

European College of ParmaEuropean College of ParmaAcademic year 2011-2012Academic year 2011-2012

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Article 3 TEUArticle 3 TEU

- to promote economic and social progress and a high level of employment and - to achieve balanced and sustainable development, in particular through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union,— to assert its identity on the international scene, in particular through the implementation of

a common foreign and security policy including the progressive framing of a common defence

policy— to strengthen the protection of the rights and interests of the nationals of its Member States

through the introduction of a citizenship of the Union,

— to maintain and develop the Union as an area of freedom, security and justice, in which the

free movement of persons is assured in conjunction with appropriate measures with respect to

external border controls, asylum, immigration and the prevention and combating of crime,

— to maintain in full the acquis communautaire and build on it

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EU as a Custom UnionEU as a Custom Union

Internal sectionInternal section - - regulation of intra- regulation of intra-Community trade:Community trade:

Elimination of custom duties and charges;Elimination of custom duties and charges;Elimination of internal borders to facilitate four Elimination of internal borders to facilitate four freedomsfreedoms

External sectionExternal section - regulation of trade - regulation of trade with third countries:with third countries:

common custom tariffs;common custom tariffs;common commercial policy.common commercial policy.

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The Fundamental FreedomsThe Fundamental Freedoms

1. Freedom of movement for 1. Freedom of movement for personspersons

2. Freedom of movement for 2. Freedom of movement for servicesservices

3. Freedom of movement for 3. Freedom of movement for capitalscapitals

4. Freedom of movement for 4. Freedom of movement for goodsgoods

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EC TREATY AND EU EC TREATY AND EU CITIZENSHIPCITIZENSHIP

Every person holding the nationality of a Member State shall be a citizen of the Union. (art. 20 TFEU).(art. 20 TFEU).Every citizen of the Union shall have the right to move and reside freely within the territoryof the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.(art. 21 TFEU).(art. 21 TFEU).

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FREE MOVEMENT OF WORKERSFREE MOVEMENT OF WORKERS

Artt.45 - 48 TFEU. Artt.45 - 48 TFEU. Workers have the Workers have the right toright 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 TREATYTHE EC TREATY

Self employed personsSelf employed persons: : – Right of establishment(artt. 49-54 TFEU) (artt. 49-54 TFEU)

andand– Freedom to provide services Freedom to provide services (artt. 56-62 (artt. 56-62

TFEU): TFEU):

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: evolutionCASE LAW OF ECJ: evolution

Definition of «worker»:Definition of «worker»:– A PERSON PERFORMS SERVICES OF SOME A PERSON PERFORMS SERVICES OF SOME

ECONOMIC VALUE FOR AND UNDER THE ECONOMIC VALUE FOR AND UNDER THE DIRECTION OF ANOTHER PERSON IN RETURN DIRECTION OF ANOTHER PERSON IN RETURN FOR WHICH HE RECEIVES REMUNERATION FOR WHICH HE RECEIVES REMUNERATION ((Lawrie-BlumLawrie-Blum, C-66/85)., C-66/85).

«Community meaning»(«Community meaning»(Unger,Unger, C-75/63). C-75/63).Fundamental Principle: broad interpretation Fundamental Principle: broad interpretation ((Levin, Levin, C-53/81).C-53/81).Exceptions and derogations: strict interpretation Exceptions and derogations: strict interpretation ((Kempf,Kempf,C-139/85).C-139/85).

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EQUAL TREATMENTEQUAL TREATMENT

BAN ON “DIRECT” DISCRIMINATIONS BAN ON “DIRECT” DISCRIMINATIONS Art. 18 TFEU on the basis of nationalityArt. 18 TFEU on the basis of nationalityArt. 45 TFEU:Art. 45 TFEU:– Access to employmentAccess to employment– PayPay– Employment conditionsEmployment conditions

Association agreement, Co-operation Association agreement, Co-operation agreement, and so on.agreement, and so on.SPORT: Balog case, Simutenkov, caseSPORT: Balog case, Simutenkov, case

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« COVERT DISCRIMINATIONS »« COVERT DISCRIMINATIONS »

NO « NO « COVERT FORMS OF COVERT FORMS OF DISCRIMINATION” which, by the DISCRIMINATION” which, by the application of other criteria of application of other criteria of differentiation, lead in fact to the same differentiation, lead in fact to the same result . result . (cause 152/73 Sotgiu)(cause 152/73 Sotgiu)

YES, only in case of « objective reasons »; YES, only in case of « objective reasons »; proportionality test!proportionality test!

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THE UEFA HOMEGROWN THE UEFA HOMEGROWN PLAYER RULEPLAYER RULE

THE UEFA HOMEGROWN PLAYER THE UEFA HOMEGROWN PLAYER RULERULEHomegrown: player trained by a club for 3 Homegrown: player trained by a club for 3 years when he is between 15 and 21 years when he is between 15 and 21 years oldyears old– 2006/2007 2006/2007 4 up to 254 up to 25– 2007/20082007/2008 6 up to 256 up to 25– 2008/20092008/2009 8 up to 258 up to 25No discrimination on the basis of nationality.No discrimination on the basis of nationality.

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Reverse discriminationReverse discrimination

“ “National law” v. “EU law”:National law” v. “EU law”:– Different scopeDifferent scope– different goalsdifferent goals

EU Law does not apply to purely EU Law does not apply to purely internal matters.internal matters.

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Discriminatory act: Discriminatory act: – ordinary legislation, ordinary legislation, – Collective bargaining agreements,Collective bargaining agreements,– Regulations of private associations,(Bosman, Regulations of private associations,(Bosman,

C-415/93): FIFA, UEFA,C-415/93): FIFA, UEFA,

Limits to free movement:Limits to free movement:– Public administration;Public administration;– Public order and securityPublic order and security– Public healthPublic health

Discriminatory act Discriminatory act and and

limit to free movementlimit to free movement

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TERRITORIAL SCOPE TERRITORIAL SCOPE

The EUROPEAN UNION: 27 Member The EUROPEAN UNION: 27 Member StatesStates

the 2+3+2 rule!the 2+3+2 rule!

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The case law of the ECJThe case law of the ECJ

““SSport is subject to Community law in so far as it port is subject to Community law in so far as it constitutes an economic activity within the constitutes an economic activity within the meaning of Article 2 of the Treaty” meaning of Article 2 of the Treaty” ..

Walrave case, C-36/74.Walrave case, C-36/74.

Donà v. Montero case, C- 13/76(nationality Donà v. Montero case, C- 13/76(nationality clause).clause).

sports or economic activity?sports or economic activity?– C-51/96 C-51/96 Deliège case”, Deliège case”, C-176/96, C-176/96, Lethonen case, Lethonen case,

Meca – Medina case(doping).Meca – Medina case(doping).

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THE BOSMAN caseTHE BOSMAN casecause C -415/93cause C -415/93

DAVID v. GOLIAH!DAVID v. GOLIAH!

Sport= economic activity= Sport= economic activity= the end of the end of transfer compensationtransfer compensation

Quid training ? Quid training ?

The new FIFA regulations on Status and The new FIFA regulations on Status and Transfer of Players Transfer of Players

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Freedom to provide servicesFreedom to provide services

EC DIRECTIVE 2006/123/ECEC DIRECTIVE 2006/123/EC– Goal is to achieve a genuine Internal Market in Goal is to achieve a genuine Internal Market in

servicesservices– A framework directive applying to wide-range of A framework directive applying to wide-range of

services services – Provisions on: Provisions on:

administrative simplificationadministrative simplification

freedom of establishmentfreedom of establishment

freedom to provide services freedom to provide services

quality of servicesquality of services

administrative co-operation administrative co-operation

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SCOPESCOPE

Services Services – Any self-employed economic activity which is normally provided Any self-employed economic activity which is normally provided

for remunerationfor remuneration

Providers established in a MS Providers established in a MS – a natural person who is a national of a MSa natural person who is a national of a MS- a legal person established in a MSa legal person established in a MS

Certain provisions in the Directive relate to recipientsCertain provisions in the Directive relate to recipients– a natural person who is a national of a MS or who benefits from a natural person who is a national of a MS or who benefits from

rights conferred upon him by Community actsrights conferred upon him by Community acts- a legal person established in a MSa legal person established in a MS

BUT….BUT….

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ACTIVITIES NOT COVEREDACTIVITIES NOT COVEREDFollowing activities are excluded from the scope:Following activities are excluded from the scope:

– non-economic services of general interestnon-economic services of general interest– financial servicesfinancial services– electronic communication services and networkselectronic communication services and networks– transport services and port servicestransport services and port services– services of temporary work agenciesservices of temporary work agencies– health care serviceshealth care services– audiovisual and radio broadcasting servicesaudiovisual and radio broadcasting services– gambling activitiesgambling activities– activities which are connected with the exercise of official authorityactivities which are connected with the exercise of official authority– certain social services certain social services – private security servicesprivate security services– services provided by notaries and bailiffsservices provided by notaries and bailiffs– health care serviceshealth care services– audiovisual and radio broadcasting servicesaudiovisual and radio broadcasting services– gambling activitiesgambling activities– activities which are connected with the exercise of official authorityactivities which are connected with the exercise of official authority– certain social services certain social services – private security servicesprivate security services– services provided by notaries and bailiffsservices provided by notaries and bailiffs

2020

SIMPLIFICATION!!!!!SIMPLIFICATION!!!!!

MSs are obliged to examine all procedures MSs are obliged to examine all procedures and formalities applicable to access to a and formalities applicable to access to a service activity and to the exercise thereof service activity and to the exercise thereof and, if needed, simplify themand, if needed, simplify them

Points of single contactPoints of single contact

Procedures by electronic meansProcedures by electronic means

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FREEDOM OF ESTABLISHMENTFREEDOM OF ESTABLISHMENT

Actual pursuit of an economic activity for an Actual pursuit of an economic activity for an indefinite period and through a stable indefinite period and through a stable infrastructureinfrastructure

Provisions relating to Provisions relating to – authorisation schemesauthorisation schemes– forbidden requirements which must be abolishedforbidden requirements which must be abolished– requirements which must evaluated and in certain requirements which must evaluated and in certain

cases abolished or replaced by less restrictive meanscases abolished or replaced by less restrictive means

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Freedom to provide servicesFreedom to provide services

Characterised by the absence of a stable and Characterised by the absence of a stable and continuous participation in the economic life of continuous participation in the economic life of the host MSthe host MSMSs are obliged to abstain from imposing their MSs are obliged to abstain from imposing their own requirements on incoming service own requirements on incoming service providers, except providers, except – where justified by reasons of public policy, public where justified by reasons of public policy, public

security, public health or the protection of security, public health or the protection of environmentenvironment

– legislation in question is covered by derogations legislation in question is covered by derogations provided for in Article 17provided for in Article 17

– case-by-case measures relating to the safety of case-by-case measures relating to the safety of servicesservices

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Quality of servicesQuality of services

Information on providers, their services Information on providers, their services and the settlement of disputesand the settlement of disputes

Professional liability insurance and Professional liability insurance and guaranteesguarantees

Commercial communications by the Commercial communications by the regulated professionsregulated professions

Multidisciplinary activitiesMultidisciplinary activities

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AUTHORISATION SCHEMES AND AUTHORISATION SCHEMES AND REQUIREMENTSREQUIREMENTS

Authorisation schemes are allowed only on certain Authorisation schemes are allowed only on certain conditionsconditions– non-discriminativenon-discriminative– the need for authorisation is justified by an overriding the need for authorisation is justified by an overriding

reason relating to the public interestreason relating to the public interest– proportionality proportionality

Requirements are set forRequirements are set for– conditions of the authorisationsconditions of the authorisations– the duration of the authorisationsthe duration of the authorisations– authorisation procedures authorisation procedures

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FORBIDDEN REQUIREMENTSFORBIDDEN REQUIREMENTS

Forbidden requirementsForbidden requirements– nationality requirements for the provider, his staff, nationality requirements for the provider, his staff,

shareholders or members of the management or shareholders or members of the management or supervisory bodiessupervisory bodies

– a requirement to be resident in the territory of that MSa requirement to be resident in the territory of that MS– a prohibition on having several establishmentsa prohibition on having several establishments– restrictions on choosing between a principal or a restrictions on choosing between a principal or a

secondary establishment or between different forms secondary establishment or between different forms of secondary establishmentsof secondary establishments

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OTHER FORBIDDEN OTHER FORBIDDEN REQUIREMENTSREQUIREMENTS

– conditions of reciprocityconditions of reciprocity– economic testseconomic tests– the involvement of competing operators in the the involvement of competing operators in the

decisions of competent authoritiesdecisions of competent authorities– obligation to have financial guarantees or obligation to have financial guarantees or

insurances from the MS in questioninsurances from the MS in question– an obligation to have been previously an obligation to have been previously

registered or to have previously exercised the registered or to have previously exercised the activity in the MSs in questionactivity in the MSs in question

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OTHER REQUIREMENTSOTHER REQUIREMENTS

Requirements subject to evaluationRequirements subject to evaluation– quantitative or territorial restrictionsquantitative or territorial restrictions– obligation for the service provider to take a obligation for the service provider to take a

specific legal formspecific legal form– requirements relating to the shareholding of requirements relating to the shareholding of

companiescompanies– requirements reserving the provision of requirements reserving the provision of

certain services to specific providerscertain services to specific providers

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OTHER REQUIREMENTSOTHER REQUIREMENTS

– bans on having more than one establishment bans on having more than one establishment in the territory of the same MSin the territory of the same MS

– obligations to have a minimum number of obligations to have a minimum number of employeesemployees

– obligations to apply fixed minimum or obligations to apply fixed minimum or maximum tariffsmaximum tariffs

– obligation on the provider to supply other obligation on the provider to supply other specific services jointly with his servicespecific services jointly with his service

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FREE MOVEMENT OF CAPITALSFREE MOVEMENT OF CAPITALS

Conclusions of the Madrid European Council Conclusions of the Madrid European Council on 26 and 27 June 1989: on 26 and 27 June 1989: – the Liberalization of Capital Movements the Liberalization of Capital Movements

Corresponds to the First Stage of Economic and Corresponds to the First Stage of Economic and Monetary Union . Monetary Union .

– Necessary to take Full Advantage of the Benefits Necessary to take Full Advantage of the Benefits of the Single Market.of the Single Market.

But ...Possibility of:But ...Possibility of:– RestrictionsRestrictions– Safeguard Measures (for security and foreign Safeguard Measures (for security and foreign

policy reasonspolicy reasons

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FREE MOVEMENT OF GOODSFREE MOVEMENT OF GOODS

Article 26 TFEU:Article 26 TFEU:The Union shall adopt measures with the The Union shall adopt measures with the

aim of establishing or ensuring the aim of establishing or ensuring the functioning of the internal market functioning of the internal market

The internal market shall comprise an area The internal market shall comprise an area without internal frontiers, in which the free without internal frontiers, in which the free movement of goods, persons, services movement of goods, persons, services and capital is ensured in accordance with and capital is ensured in accordance with the Treatythe Treaty

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

1.1. Custom duties and charges having equivalent effectCustom duties and charges having equivalent effect (Art. 28-30 TFEU): duties on border crossing and any (Art. 28-30 TFEU): duties on border crossing and any other charges with equivalent effectother charges with equivalent effect

2.2. Discriminatory taxationDiscriminatory taxation (Art. 110 TFEU): taxes in (Art. 110 TFEU): taxes in excess of tax for similar domestic productsexcess of tax for similar domestic products

3.3. Quantitative restrictions on imports and exportsQuantitative restrictions on imports and exports (quotas) and (quotas) and all measures having equivalent effectall measures having equivalent effect (Art. 34-35 TFEU): MEE could be any public and (Art. 34-35 TFEU): MEE could be any public and private measure, including law, an internal regulation, private measure, including law, an internal regulation, decisions of a judge or a court, administrative rules decisions of a judge or a court, administrative rules and regulations giving discretion to discriminate (and regulations giving discretion to discriminate (Irish Irish SouvenirsSouvenirs case 249/81) case 249/81)

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Quantitative Restrictions and MEEQuantitative Restrictions and MEE(Articles 34 and 35 TFEU)(Articles 34 and 35 TFEU)

Quantitative restrictionsQuantitative restrictions = explicit restrictions such as quotas = explicit restrictions such as quotasMEEMEE = implicit restrictions such as a duty to obtain a licence to = implicit restrictions such as a duty to obtain a licence to import or exportimport or export

Procureur du Roi v. DassonvilleProcureur du Roi v. Dassonville (case 8/74): (case 8/74): All trading rules enacted by MS which are capable of hindering, All trading rules enacted by MS which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to are to be considered as measures having an effect equivalent to quantitative quantitative restrictions [para. 5]restrictions [para. 5]

Rule of reasonRule of reason: In the absence of a Community system…if a : In the absence of a Community system…if a MS MS takes measures to prevent unfair practices…it is subject to takes measures to prevent unfair practices…it is subject to the the condition that these measures should be reasonable… condition that these measures should be reasonable… [para. 6][para. 6]

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Categories of Measures Possibly Caught in Categories of Measures Possibly Caught in Violation of Art. 34 TFEU by Violation of Art. 34 TFEU by

the the DassonvilleDassonville Formula Formula

1. Discriminatory measures1. Discriminatory measures on the ground of on the ground of nationality nationality 2. Indistinctly applicable measures2. Indistinctly applicable measures: so-called : so-called product requirements, related to the production product requirements, related to the production and marketing of goods that apply without and marketing of goods that apply without distinction to both foreign and domestic goods distinction to both foreign and domestic goods but it is usually more burdensome for foreign but it is usually more burdensome for foreign companies/goods (companies/goods (Casis de DijonCasis de Dijon case 120/78) case 120/78)3. Selling arrangements3. Selling arrangements: category created by : category created by KeckKeck case C-267/91 related to socio-economic case C-267/91 related to socio-economic measures as to how goods should be sold measures as to how goods should be sold (manner of sale)(manner of sale)

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Cassis PrinciplesCassis Principles::

1. 1. The Rule of ReasonThe Rule of Reason::Certain measures, even if within Dassonville formula, will Certain measures, even if within Dassonville formula, will not breach Art. 34 TFEU if they are not breach Art. 34 TFEU if they are necessarynecessary (proportionality) to satisfy (proportionality) to satisfy mandatory requirementmandatory requirement (objective justification) relating in particular to the (objective justification) relating in particular to the effectiveness of fiscal supervision, the protection of effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions public health, the fairness of commercial transactions and the defence of the consumerand the defence of the consumer

2. 2. Mutual Recognition:Mutual Recognition:There is no valid reason why, provided that goods have There is no valid reason why, provided that goods have been lawfully produced and marketed in one MS, they been lawfully produced and marketed in one MS, they should not be introduced into any other MSshould not be introduced into any other MS

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Keck ProvisoKeck Proviso

Selling arrangements are excluded Selling arrangements are excluded from Article 34 TFEU (from Article 34 TFEU (DassonvilleDassonville formula) formula) as long as they affect in as long as they affect in the same manner, in law and in the same manner, in law and in fact, the sale of domestic products fact, the sale of domestic products and of those from other MSand of those from other MS [para. [para. 16]16]

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Exceptions to Free Movement of Exceptions to Free Movement of GoodsGoods

Public moralityPublic morality

Public policy Public policy

Public securityPublic security

Protection of Protection of health and life of humans, animals health and life of humans, animals or plantsor plants

Protection of Protection of national treasures possessing national treasures possessing artistic, historic or archaeological valueartistic, historic or archaeological value

Protection of Protection of industrial and commercial propertyindustrial and commercial property

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THE EU INTERNAL MARKETTHE EU INTERNAL MARKET

MYTH OR REALITY?MYTH OR REALITY?

Some personal experience...Some personal experience...