ECJ Case Highlights: Establishment & Service Freedom

TOPIC CASE Factortame Jany Klopp Definition of establishme nt Gebhard Knoors Freedom of establishme nt ◦ The ECJ held that prostitutes could count as self-employed persons, particularly as they were working in the Netherlands, where prostitution is legal. ◦ French rule of unicité de cabinet (only one professional residence) was considered to prevent lawyers from other Member States from exercising their right of establishment by integrating in the legal profession of another Member State and it declared that the existence of a second professional residence in another Member State did not present any obstacle to the application of rules of professional conduct in the host Member State. ◦ Issue: use of title of avvocato without admission to Milan bar and without training being formally recognized in Italy ◦ Ruling: - In the absence of EU rules, Member States may subject the pursuit of self-employed activity to rules concerning qualifications, titles, etc.  However, such measures must not be liable to hinder or make less attractive the exercise of the fundamental freedoms. Any such measures must be: 1) applied in a non-discriminatory manner; 2) be justified by imperative requirements in the general interest; 3) be suitable for securing that objective; 4) be necessary.  Establishment v service ◦ establishment : a Community national participates, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and profits there from, so contributing to economic and social interpenetration within the Community in the sphere of activities as self-employed persons. - there’s an established professional base within the host MS; ◦ the provider of services moves to another Member State to pursue his activity there on a temporary basis; the temporary nature of the activities in question has to be determined in the light, not only of the duration of the provision of the service, but also of its regularity, periodicity or continuity. The fact that the provision of services is temporary does not mean that the provider of services within the meaning of the Treaty may not equip himself with some form of infrastructure in the host Member State (including an office, chambers or consulting rooms) in so far as such infrastructure is necessary for the purposes of performing the services in question. ◦ Facts: a Dutch national who had worked for a number of years in Belgium as a plumber, he returned to the Netherlands and applied for an authorization to carry on the same trade there in a self-employed capacity. His application was refused because he did not possess the qualifications required for that trade by Dutch legislation. Dutch authorities also thought that he could not rely on EU law as he was Dutch. ◦ Ruling: Court found that a person in the position of Knoors could rely on the relevant legislation and be allowed to exercise his trade in his MS of origin by having his experience acquired in another MS taken into account. Koller Against Home MS Belgian social security Freedom of establishme FACTS/RULING ◦ The actual pursuit of an economic activity through a fixed establishment in another Member State for an indefinite period. Therefore, a national of another Member State may not be restricted from setting up agencies, branches or subsidiaries; Reyners [predirective] ◦ Facts; Austrian national – law degree in Austria – additional courses and exams in Spain – abogado – request to take the Austrian aptitude test was refused on the ground that, in Spain, unlike in Austria, practical experience was not required to pursue the profession of a lawyer ◦ when a title is recognized and patented in one EU country this title should be recognized by all the other countries as equivalent. In this case Mr. Koller proved his additional knowledge through examinations in Spain where he got a recognized title (this title insured him the application of this directive.) Consequently, the ECJ recognized the applicants advanced knowledge and decided that his lack of practical experience was irrelevant. ◦ Flemish Government, a federal entity of the Belgian state, had enacted a scheme of care insurance that was available only to those working and residing in either the Dutchspeaking region or the bilingual region of Brussels. ◦ Those who had never exercised their right to free movement in the EU had no claim against their MS  nationals of MS were worse off than nationals of other MSs: reverse discrimination. ◦ Facts: Mr Reyners claimed that he should be admitted to the Belgian bar after he was refused because he lacked Belgian nationality. He claimed that this breached the Treaty's provisions on free movement of services, now TFEU article 56. ◦ Issue: whether the legal profession of avocat was wholly exempt under Art 51 TFEU official authority exception given that part of the business was concerned with exercise of official authority. ◦ Ruling: The most typical activities of the profession of avocat cannot be considered as connected with the exercise of official authority. nt: legal profession Thieffry [predirective] Vlassopoulo u [mutual recognitioncomparative examination ] Morgenbess er [produit nonfini – Academic part of a professional qualification] Professional qualification s ◦ Fact: Mrs. Vlassopoulou was a Greek national who obtained her law degree in Athens, was admitted to the Athens Bar & worked as a legal advisor in a German law firm. She applied for admission to the Mannheim Bar & authorisation to practice in the courts – both requests were rejected by the German authorities on the ground that she lacked the necessary qualifications, the passing of the 1st & 2nd State exams. ◦ Issue: whether national requirements concerning the exercise of a profession were to take precedence over qualifications obtained in another MS & practical experience ◦ Ruling: - A Member State which receives a request to admit a person to a profession to which access, under national law, depends upon the possession of a diploma or a professional qualification must take into consideration the diplomas, certificates and other qualifications which the person has acquired.  Comparative examination: 1. If the knowledge and qualifications certified by the foreign diploma correspond to those required by national provisions, the Member State must recognize that diploma. 2. If they correspond only partially, the host Member State is entitled to require the person to show that he has acquired the knowledge and qualifications which are lacking. ◦ Facts: A French national, who had studied law in France & obtained her degree there, started working at a Parisian law firm without qualifying as an avocat. She then moved to Italy & found a similar job with a law firm. One and a half years later, she filed a request with the Genoa Bar Association to be admitted to the register of practicanti, i.e. for lawyers who are in the process of qualifying to become an avvocato. The Bar Assoc. refused this. ◦ Issue: whether a person who had a law degree from another MS could be refused entry into a register of persons who follow practical training in order to enter in the legal profession of the MS concerned. ◦ Ruling: Notably, although the applicant was not deemed to fall within secondary legislation applying at the time (because he was not fully qualified), the Court stated that TFEU provisions (on workers or establishment) were relevant. - It is the duty of the competent authority to examine, whether, and to what extent, the knowledge certified by the diploma granted in another MS and the qualifications or professional experience obtained there, together with the experience obtained in the MS in which the candidate seeks enrolment satisfy the conditions required for access to the activity concerned. - In the case of the profession of lawyer, a MS may carry out a comparative examination of diplomas, taking account of the differences identified between the national legal systems concerned. Angerer ◦ Art.10(c) of Directive 2005/36 must be interpreted as meaning that an applicant wishing to benefit from the general system for recognition of evidence of training laid down in Chapter I of Title III of that directive must, in addition to holding formal qualifications not listed in Annex V, point 5.7.1 thereto, also establish the existence of ‘specific and exceptional reasons’. Notaries ◦ A Member State whose legislation imposes a nationality requirement for access to the profession of notary fails to fulfil its obligations under Article 49 TFEU, where the activities entrusted to notaries within the legal order of that Member State are not connected with the exercise of official authority within the meaning of the first paragraph of Article 51 TFEU. ◦ Facts: 2 Italian nationals had obtained university law degrees in Italy and Spain. They registered as lawyers in Spain and then submitted applications to the Bar Council in Italy in accordance with Article 3 Directive 98/5.The National Bar Council argued that it was not open to the 2 Italian nationals to rely on the Directive if the acquisition of the title in Spain had no other purpose than to circumvent Italian law governing access to the profession of lawyer. Toressi LAWYERS ◦ Facts: Belgian national who had practiced in Belgium as an advocate for a number of years, obtained a French certificate of equivalence regarding his qualifications and a certificate of aptitude for the profession of avocat. He was subsequently refused admission to the Paris bar for lack of a degree in French law. ◦ Ruling: discrimination based on the criterion of nationality must be rejected, whether it is applied to the person himself or whether it takes the form of a national law demanding a national diploma, and whenever a solution can be found to the problem raised by the absence of mutual recognition of diplomas, that solution must be adopted if it answers to the national and Community objectives in question. ◦ Ruling: it must be held that the right of nationals of a MS to choose, on the one hand, the MS in which they wish to acquire their professional qualifications and, on the other, the MS in which they intend to practice their profession is inherent in the exercise, in a single market, of the fundamental freedoms guaranteed by the Treaties. The objective element of the abuse of law test was not met. The fact that they were availing themselves of more ‘favorable’ legislation was not enough to meet the subjective element of the test Pesla ◦ Issue: Specify the legal criteria imposed by Community law in relation to the assessment of equivalence of legal knowledge which needs to be carried out following an application for direct admission to a legal traineeship, without taking the tests provided for to that end. ◦ Ruling: In the absence of harmonization at European Union level of the conditions of access to legal traineeships, the Member States are entitled to lay down the knowledge and qualifications required. However, in order to reconcile the national requirements so defined with the requirement that the fundamental freedoms guaranteed by Community law be capable of being exercised effectively EU law requires the authorities of a MS, when assessing the application for admission of a national of another MS, to carry out the examination of equivalence in the light of the academic and professional training and experience as a whole before requiring a candidate to take an aptitude test. The Court states that the knowledge to be taken as a reference point for the purposes of assessing whether a candidate can be admitted directly to a legal traineeship, that is to say without having to take such a test, is that attested by the qualification required in the Member State concerned. Ebert ◦ Facts: Mr Ebert is a German lawyer from Düsseldorf, based in Hungary, who is registered as a European lawyer under his home German title in Hungary. However, he wanted to become a Hungarian lawyer, too. He applied to the appropriate ministry to sit the aptitude test; the ministry sent the application to the local bar, which said that it could not decide since the ministry had to decide – and the case reports that no decision had yet been taken by the ministry. So Mr Ebert, who had also taken a Doctorate of Law in Hungary, and set up his own firm there, applied to the court to grant him the right to use the Hungarian title ‘ügyvéd’ (lawyer) without becoming a member of the bar. ◦ Ruling: None of the Directives preclude national rules laying down the requirement to be a member of a body such as a Bar Association in order to practice the profession of lawyer under the title of lawyer of the host Member State. Jakubowska ◦ Fact: Italian law forbade part-time civil servants from being lawyers. The ECJ had to decide whether this was compatible with European law. ◦ Ruling: it is open to a host Member State to impose on lawyers registered with a Bar in that Member State who are also, whether full or part-time, in the employ of another lawyer, an association or firm of lawyers, or a public or private enterprise, restrictions on the exercise of the profession of lawyer concurrent with that employment, provided that those restrictions do not go beyond what is necessary in order to attain the objective of preventing conflicts of interest and apply to all the lawyers registered in that Member State. Lahorgue [services] Freedom to provide ◦The refusal, on the part of the competent authorities of a Member State, to issue a router for access to the private virtual network for lawyers to a lawyer duly registered at a Bar of another Member State, for the sole reason that that lawyer is not registered at a Bar of the first Member State, in which he wishes to practice his profession as a free provider of services, in situations where the obligation to work in conjunction with another lawyer is not imposed by law, constitutes a restriction on the freedom to provide services under Article 4 of Directive 77/249 read in the light of Article 56 TFEU and the third paragraph of Article 57 TFEU.  It is for the national court to determine whether such a refusal, in the light of the context in which it is put forward, genuinely serves the objectives of consumer protection and the proper administration of justice which might justify it and whether the resulting restrictions do not appear to be disproportionate in regard to those objectives. Luisi and Carbone ◦ Facts: Luisi and Carbone were prosecuted for exceeding amount of foreign currency that could be taken out of Italy. Luisi said she was going to France and Germany to receive medical treatment ◦ Ruling: Art. 56 entails freedom to receive as well as to provide services  People who move to other MS to receive services also acquire temp. right to residence during the stay. Van Bisbergen ◦ Facts: Dutch national lawyer; moved place of residence to Belgium. This case also demonstrates that Article 56 can be invoked against one’s own state of nationality as long as national is established in another state (must be an inter-state element). services Belgium v Humbel ◦The Court of Justice held that courses provided within a national education system do not constitute a service in return for remuneration, as the state provides education as part of its general duty towards its citizens, not as part of a commercial transaction. Secondly, education systems are generally state funded, not privately funded. ◦ The offer of financial services by phone to recipients in other states Apline investments Trijber& Harmsen ◦ Facts: 1) application of Mr. Trijber for an authorization for the transportation of passengers by water. Mr. Trijber wishes to use his boat, an open sloop powered by an electrical motor suitable for transporting small groups of persons, to carry passengers, in return for payment, on tours of Amsterdam by waterway for festive occasions; 2) application of Mr. Harmsen for the operation of two window prostitution businesses in Amsterdam as well. Mr. Harmsen specified in his application that he would not rent out rooms to prostitutes with whom he could not communicate in English, Dutch or any other language comprehensible to him. o Ruling: - Art. 2(2)(d) of Directive 2006/123 must be interpreted as meaning that, subject to the checks to be carried out by the referring court, an activity, such as that which is the subject of the application for authorization in the main proceedings, which consists in providing, for payment, a service of carrying passengers on a boat for a waterway tour of a city for event-related purposes, does not constitute a service in the ‘field of transport’ within the meaning of that provision which is excluded from the scope of that directive. - Art.10(2)(c) of Directive 2006/123 must be interpreted as not precluding a measure, such as that at issue in the main proceedings, under which the grant of authorization for the exercise of an activity consisting in the operation of window prostitution businesses by renting rooms out in shifts is subject to the condition that the service provider is able to communicate with the recipients of those services, in this case prostitutes, where that condition is such as to ensure that the legitimate objective of general interest pursued — namely the prevention of criminal offences related to prostitution — is secured, and does not go beyond what is necessary to achieve that objective, which is for the referring court to determine. Sager Garkalns Rina ◦ Imposed a clear test to assess whether indistinctly applicable national rules were capable of breaching Article 56  Justified by imperative reasons relating to the public interest and which apply to all persons or undertakings pursuing an activity in the State of destination, in so far as that interest is not protected by the rules to which the person providing the services is subject in the Member State in which he is established;  Objectively necessary in order to ensure compliance with professional rules and to guarantee the protection of the recipient of services and do not exceed what is necessary to attain those objectives. ◦ Article 49 EC must be interpreted as not precluding legislation of a Member State, (…) which confers on local authorities a broad discretion in enabling them to refuse authorization to open a casino, amusement arcade or bingo hall on grounds of 'substantial impairment of the interests of the State and of the residents of the administrative area concerned', provided that that legislation is genuinely intended to reduce opportunities for gambling and to limit activities in that domain in a consistent and systematic manner or to ensure the maintenance of public order and in so far as the competent authorities exercise their powers of discretion in a transparent manner, so that the impartiality of the authorization procedures can be monitored, it being for the national court to determine whether those conditions are satisfied. ◦ The first paragraph of Article 51 TFEU must be interpreted as meaning that the exception to the right of establishment laid down in that provision does not apply to the certification activities carried out by companies classified as certification bodies. - Article 14 of Directive 2006/123 must be interpreted as precluding legislation of a Member State which provides that companies classified as certification bodies must have their registered office in national territory. ◦ Articles 10(4) and 15(1), (2)(a) and (3) of Directive 2006/123 on services in the internal market must be interpreted as precluding national legislation which limits, in all respects, a license to trade as a chimney sweep to a particular geographical area, if that legislation does not seek to attain, in a consistent and systematic manner, the objective of public health protection, which is a matter to be determined by the national court. Hiebler ◦ Article 13(2) of Directive 2006/123 must be interpreted as precluding the requirement for the payment of a fee, at the time of submitting an application for the grant or renewal of authorization, part of which corresponds to the costs relating to the management and enforcement of the authorization scheme concerned, even if that part is refundable if that application is refused. Simply Pleasure Commission v Ireland (rental cars) ◦ By imposing the obligation to pay in advance the full amount of the vehicle registration tax applicable in the event of permanent registration, whatever the actual limited duration of the proposed use in Ireland of a vehicle imported there, and although the temporary duration of the lease or rental has been determined precisely and is known in advance, Ireland has failed to fulfil its obligations under Article 56 TFEU