Article 114 TFEU essay plan PDF

Preview

Summary

Essay plan for Art. 114 TFEU...

Description

Green = Weiss Turquoise = Schutze Yellow = Davies Red = Barnard

European Internal Market Law

Article 114 TFEU Essay plan

Introduction  Article 26 TFEU states: o “The Internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured.”  Article 3(3) TEU it is stated “The Union shall establish an internal market.”  Two ways of bringing about the Internal Market: o Direct effect (Articles 34, 35, 45, 49, and 56 TFEU all have direct effect) – citizens as “internal market attorneys” can challenge national law o EU level regulation  EU may legislate in their field of competence (Article 5 TEU)  The Internal Market is an area of shared competence (Article 4 TFEU), and most legislation is based on Article 114 TFEU

Negative and positive integration  There are essentially two factors that define the economic integration between states: o Negative integration: this implies the elimination of barriers that restrict the movement of goods, services and factors of production o Positive integration: this refers to the creation of a common sovereignty through the modification of existing institutions and the creation of new ones  The European Union can pass secondary law measures within the limits set by the Treaty  Articles 114 and 115 TFEU provide general competences to pass secondary law measures to approximate national law o According to Article 115 TFEU, the Council can “issue Directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the internal market.” o Article 114 TFEU was introduced by the SEA to facilitate necessary harmonisation  Accordingly, the European Parliament and the Council can “adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.”  On the basis of Article 114 TFEU, the European Union is entitled to adopt measures for the approximation of national laws “which have as their object the establishment and functioning of the internal market.” o Union’s competence to harmonise national laws applies where national laws affect:  the establishment – concerns obstacles to the four freedoms of movement  functioning of the internal market – captures distortions of competition resulting from disparities between national laws

Scope of Article 114 TFEU  Previously, the Union legislator has employed an extremely wide reading of this general competence (Spain v Council)  Existence of limits to the Union’s harmonisation power was confirmed in Tobacco Advertising I

European Internal Market Law



o ECJ annulled a Directive based on Article 114 for the first time, on the grounds that the Directive exceeded what the legal basis allowed o The Directive amounted to a ban on all tobacco advertising in media other than television  The argument put forward for the Directive was that the laws on tobacco advertising varied from state to state, which resulted in obstacles to free movement and distortions in competition  However number of objections:  Firstly, the distortions of competition were claimed to be marginal  Secondly, while there were certainly some obstacles to movement resulting from different advertising laws, the Directive went beyond addressing these and banned advertising in contexts where it was not obvious that this made any contribution at all to interstate trade  Thirdly, for some of the goods on which advertising was banned, the level of interstate trade was negligible  Lastly, the Directive was claimed to be a covert health protection measure o The Court of Justice provided a framework of legal principle which continues to define the scope of Article 114  Measures based on that article must contribute to removing obstacles to interstate trade, or to removing distortions of competition  Harmonisation to remove distortions is only possible when those distortions are ‘appreciable’  It is acceptable to harmonise to prevent obstacles arising, rather than removing already existing problems, but those future problems must be likely  Provided that a measure does in fact contribute to free movement or undistorted competition, it is not rendered invalid because it also contributes to public health Tobacco Advertising I has since been followed by a number of other cases also addressing the scope of Article 114 o Tobacco Advertising II addressed the Directive adopted to replace the one annulled in Tobacco Advertising I  The broad idea of the replacement Directive was the same, but more limited to printed media and radio, where it could be shown that there actually was cross-border trade  The same objections were raised but this time the Court found the Directive to be valid  A general approach was justified – an internal market directive may regulate purely internal matters if this is an inseparable part of regulating cross-border ones  The judgment also clarified two further matters:  Firstly, a Directive does not have to pursue both the removal of obstacles to movement and undistorted competition  Secondly, it is possible to harmonise public health matters under Article 114 provided this is part of genuine internal market regulation o The second post-Tobacco Advertising I case was Swedish Match  This concerned a Directive banning tobacco for chewing (of which Sweden enjoyed an exemption)  However, the complainants in this case which to market the chewing tobacco in the UK and Germany  They challenged the Directive, saying a ban on a product did not contribute to the internal market; however, the Court disagreed, pointing out that without

European Internal Market Law





the Directive it was very likely that states would adopt different laws on the product o This was taken further in Vodafone, which concerned the validity of a regulation setting a maximum on mobile phone roaming charges paid by consumers when using their phones in other Member States  It was argued hat this was not harmonisation, since none of the Member States had attempted to regulate these charges so there could be no question of problems arising from disparities between national laws  However, critics argued that the regulation was just an attempt to regulate the behaviour of mobile phone companies, whose commercial choices were mobile phone use abroad very expensive  As such, it was not harmonisation of national laws and therefore should not be based on Article 114 – the AG in this case had concluded that there was no evidence that Member States were planning to adopt laws, so the test of ‘likelihood’ was not satisfied o The other aspect of the Swedish Match case was that it involved banning a product – how can this facilitate interstate trade in that product?  In the Seal Products case, which concerned a Regulation prohibiting the import of seal products in the EU, the same point was made  If the point of that Regulation was just to protect seals, then, however worthy, it should not have been based on Article 114  General Court accepted that it was a legitimate internal market measure  Banning products nevertheless remains a counter-intuitive contribution to market building The other question on Article 114 arising in the case law concerns the meaning and scope of ‘approximation’ o Can this article be used only for legislation, which actually harmonises, or can it be used for measures, which contribute to the process of harmonising, without engaging in it as such? o The latter position appears to be correct, following the Smoke Flavourings case and the ENISA case o In the first case the regulation was based on Article 114 – the British government argued that this article could only be used to actually approximate national rules directly, not to create a system leading to such approximation, as the regulation did; The Court ruled that Article 114 can be used to create mechanisms leading to harmonisation, as well as for immediate harmonisation o This was taken a step further in ENISA, when the British government argued that a European Agency created by secondary legislation based on Article 114 went beyond approximation; the ECJ found that ENISA, by providing information on common approaches and problems, even in a non-binding way, helped states to develop standardised and compatible systems and therefore made a contribution to a harmonisation process The scope of Article 114 TFEU is now reasonably clear o However, what is unaddressed is the ambiguity of the term ‘appreciable’ in Tobacco Advertising I o This is the only word that prevents Article 114 TFEU becoming a general power to harmonise national laws o On the one hand, there seems to be no particular reason to fear that Article 114 will spiral out of control  Both the Council and Parliament must agree to legislation, and the Court of Justice is also likely to annul Directives which go too far

European Internal Market Law Nevertheless, it is striking and, for many, problematic that the legal limit on harmonisation is so vague o Nor is ‘appreciable’ always an adequate limit  There are matters which cause very appreciable distortions of competition y yet which we would not expect to see harmonised (eg. common EU language would lift many barriers to trade!) o Moreover, the appreciability threshold does not apply to the removal of obstacles to free movement 

Techniques of Regulation  One of the fundamental obstacles to free trade between states is technical standards, as these vary from state to state, with the result that a product made according to French law probably does not conform to the requirements of German or UK law  In the early years of the Union, the approach to this problem was relatively straightforward – whenever necessary, the Commission sought to propose legislation replacing national product standards with equivalent European ones o Common standards, combined with mutual recognition of inspections, removed the trade problem o However, standards are a complex business and each piece of legislation was timeconsuming business, and the Community was simply not able to produce enough legislation to create a single market  In the mid-1980s a new approach was introduced called the new approach o This was based on a much more minimalist legislative approach – instead of detailed and technical legislation for each product type, Directives would be adopted for broad product categories (eg. toys, machinery etc.) o These would lay down, at a high level of abstraction, general demands concerning the essential health and safety requirements that such products should meet o The responsibility of the Member States under new approach Directives is to ensure that products placed onto their domestic markets conform to the essential requirements of the Directive – how exactly they do that is up to them o There are two important differences from the old approach  First, the new approach gives states a considerable freedom to standardise in different ways (no uniform approach); thus, the virtues of experiment and diversity are maintained  Second, the legislation only deals with essential health and safety requirements – matters that are purely concerned with quality are not harmonised  The New Approach to technical harmonisation and standardisation o These new approach directives are horizontal, applying throughout an industry as a whole rather than to specific groups within that industry o Given their broad field of application, these directives set out general principles rather than detailed rules, leaving wide latitude for interpretation, and rely on private bodies to set voluntary standards o The Commission summarises the new approach in the following terms:  it ensures free movement of goods on condition that a manufacturer guarantees that they are safe o The legislation sets out the level of protection to be achieved but does not prejudge the choice of technical solution to achieve the levels o The new approach is based on five fundamental principles:  Legislative harmonisation is limited to the adoption of essential safety standards with which products placed on the market must conform

European Internal Market Law The task of drawing up the technical specifications which satisfy the essential requirements is entrusted to specialist standardisation organisations  These technical standards are voluntary, and the producer has the choice of either manufacturing according to other standards and then proving that they conform with the essential requirements of the directive through a system of tests and certificates  Products manufactured in conformity with harmonised standards are presumed to conform to take essential requirements established by the directive  Finally, Member States must take all appropriate enforcement measures, including market surveillance to ensure that non-conforming products are withdrawn from the market o Assessment  While some commentators have expressed concerns that the new approach may actually reduce protection given to consumers due to the absence of specific detailed standards, Pelkmans believes that the new approach is ‘qualitatively an enormous improvement over the traditional approach.’  He argues that it is a serious attempt to achieve coherence by ‘combining total harmonisation of the objectives at issue with a flexible approach of the means  Others have also questioned the legitimacy and accountability of the harmonisation bodies as they are not bound by Treaty obligations – (de Burca) the acceptance of such non-democratic bodies and networks in the EU is that elite or technocratic modes of governance have always been central to the European integration project 

Advantages and Disadvantages SEE DOCUMENT ON ADVANTAGES AND DISADVANTAGES OF THE OLD AND NEW APPROACHES Other info that may be necessary For non-economic freedoms see Davies sheet common language...