EC Law Research Articles

The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective by Luca Rubini Oxford, UK: Oxford University Press, 2010

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Soft Law as a New Mode of Governance: A Legal Perspective

After a brief review of the history and typology of soft law in public international law, we approach the concept deductively. We reject the binary view and subscribe to the continuum view. Building on the idea of graduated normativity and on the prototype theory of concepts, we submit that soft law is in the penumbra of law. It can be distinguished from purely political documents more or less readily, depending on its closeness to the prototype of law. Insights gained by the study of public international soft law are relevant to EC and EU soft law despite some differences between those legal orders. European soft law is created by institutions, Member States, and private actors. The legal effects of soft law acts can be clustered according to their relation to hard law. Both practical and normative considerations motivate reliance on soft law. An examination of the soft legal consequences of a disregard of soft law shows that compliance control mechanisms for hard and soft international law are converging. Moreover, some factors of compliance are independent of the theoretical hardness or softness of a given norm. In a legal policy perspective, the proliferation of soft law carries both dangers and benefits. Especially soft acts with a lawplus function do not weaken the respective regimes, but perfect them.

The Spanish Prior Approval Regime for the Purchase of Certain Shareholdings and Assets in the Energy Sector Breaches EC Law

This paper, however, mainly concentrates on the ECJ judgment in the case C-207/07 and it explains the reasons why the veto power of the Spanish Energy Regulator (NEC) violated EC law. The article shows that the judgment is consistent with the EC case law on the application of the principles of freedom of establishment and of free movement of capitals to national restrictive measures giving states or public entities exclusive and/or special rights. Not only the ECJ embraces quite a wide perception of national measures infringing the free movement of capitals, but it also narrowly construes the conditions in which such restrictive national measures can be justified under EC law. A short look at the ECJ judgement in the case C-196/07 illustrates that also a specific decision taken by the NEC in the exercise of its veto power infringed EC law. More specifically, it breached the principle of ‘one stop shop,’ according to which the Commission has exclusive jurisdiction over review of concentrations with an EC dimension.

Can Tax Authorities Scrutinise the Ideas of Foreign Charities? The ECJ's Persche Judgment and Lessons from US Tax Law

The European Court of Justice's (ECJ's) recent Persche judgment poses important questions about the relationship between taxation of gifts and charitable purposes in the light of EC law requirements. This article argues that by applying its established case-law to the matter of donors to foreign recipient bodies, the ECJ takes a position on the social role of both charities and tax deduction. Moreover, the position of the ECJ clearly paves the way for tax authorities to check the objectives and the values pursued by recipient bodies seeking tax-preferred status, a situation that recalls a similar power recognised under specific circumstances of the US Internal Revenue Services. Arguably, the ECJ case-law has more profound consequences on charitable action, since it seems that the power accorded to tax authorities of the Member States to check the purposes of charitable organisations leads to a cosmopolitan apprehension of charitable action while it pushes charities to enhance transparency in their activities.

The Applicability of the Energy Charter Treaty in ICSID Arbitration of EU Nationals vs. EU Member States

The relationship between EC law and international investment law has gained increasing attention. This is due to ongoing proceedings before the European Court of Justice (ECJ) concerning the compatibility of bilateral investment treaties (BITs) of EU Member States with EC law, several arbitral proceedings of investors versus EU Member States based on BITs between EU Member States and/or concerning substantive legal problems that are somehow related to EC law (e.g. Eastern Sugar). Insufficient attention, however, has so far been paid to the relationship between EC law and the Energy Charter Treaty (ECT) with regard to the specific situation of a possible arbitral proceeding of an EU national versus an EU Member State. As the ECT is a plurilateral treaty that has been concluded as a so-called mixed agreement by the EC and all its Member States, the questions that arise are to a large extent different than in the Eastern Sugar/BIT situation. Accordingly this paper discusses the applicability of the ECT in ICSID arbitrations of EU nationals versus EU Member States. The first part of the paper provides an introduction to the applicable law concerning the admissibility and merits of ECT/ICSID proceedings. The second part discusses the public international status of the ECT towards the EC and its Member States and analyses the legal phenomenon of ‘mixed agreements’ within the EC and its Member States. The author continues to examine the general aspects concerning the legally-binding effects of mixed agreements such as the ECT from a public international law perspective. Following the emphasis upon a number of intrinsic legal principles of public international law, the author argues that the ECT as a mixed agreement under EC law does not influence the comprehensive legally-binding effect of the ECT treaty in view of the EC and its Member States under public international law. In the third part of the paper the contributor adheres to providing an overview of the exemptions to the comprehensive binding effects regarding mixed agreements, focussing particularly on the analysis of possible limitations of the legally-binding inter se relationship as a result of explicit and implicit ECT standards. Subsequently an intermediate conclusion is presented, which underlines that from a public international law perspective, an inter se modification of the ECT by EC law is not possible. The author continues to contextualise Part III and V of the ECT and concludes that no competency is given therein to the EC. In the last part of the paper the contributor assesses the associated sub problem of the conflicting jurisdiction in the sense of Art. 292 EC and discusses the irrelevance of Art. 307 EC from an international public law perspective in relation to ECT/ICSID proceedings.The paper closes by providing an analysis of the legal principles of lex arbitri and ordre public concerning the applicability of EC law in an ECT/ICSID proceeding. The author concludes that the legal provisions of the ECT are applicable in an ICSID proceeding of an EU national versus an EU Member State; similarly it is established that EC law does not influence such proceedings which are exclusively governed by public international law.

National Judges and Supranational Laws on the Effective Application of the EC Law and the ECHR: The Case of Cyprus

This paper takes issue with the domestic effect of EU and ECHR law in Cyprus and analyses the changes that have occurred in the national legal order for their reception.

On Workers, Nationality, and What it Means for State Sovereignty and the Internal Market

Who is a worker in EC law? In its case law the Court of Justice has long developed a definition of worker in relation to nationals of the Member States. This jurisprudence has later been applied to worker clauses in EC agreements with third countries. However, the secondary legislation adopted under Title IV EC has re-defined this concept for third-country nationals residing in the Community. Simultaneously, a number of new directives contain mobility provisions for third-country workers relocating between Member States. The contribution will focus on the evolution of competences regarding secondary migration, discussing provisions of the Treaty of Lisbon, current secondary legislation, and most recent proposals. The rationale behind introduction of intra-Community mobility for third-country workers appears to diverge from that of Article 39 EC. Enacting directly effective right to secondary mobility for third-country workers potentially leads to the application of free movement principles to all workers, to the benefit of the internal market at the expense of sovereign powers of the Member States. Has the first step in this direction been taken?

« Dix personnages majestueux en longue robe amarante »

Résumé Bien que la constitutionnalisation de l’Union européenne par sa Cour de justice ait fait l’objet de nombreuses recherches, le rôle des juristes eux-mêmes dans cette révolution juridique reste largement inexploré, et en particulier celui des juges et avocats généraux à la Cour. Cet article analyse le recrutement social de la Cour de justice dans les années 1950 et 1960, afin de mesurer l’impact de leur trajectoire professionnelle sur leurs conceptions quant à la « nature » juridique des Communautés européennes, et en particulier sur la question de savoir si le droit « communautaire » doit être considéré comme un droit « interne », et non « international », équivalent à une constitution.

Book Review: Network-Based Governance in EC Law: The Example of EC Competition and EC Communications Law, by Maartje de Visser

Book Review: <i>Network-Based Governance in EC Law: The Example of EC Competition and EC Communications Law</i>, by Maartje de Visser

Political Self-control and European Constitution: The Assumption of National Political Loyalty to European Obligations as the Solution to theLex PosteriorProblem of EC Law in the National Legal Orders

Current understandings of the constitutional effectiveness of EC law emphasise the European Court of Justice's (ECJ's) claims of supremacy and direct effect, and the acceptance of those claims by the national courts. However, the lex posterior problem of EC law in the national legal order—the problem whereby the application of European obligations in the national legal order could be legislated away by subsequent contrary national legislation—has been addressed not by national courts' acceptance of Costa but by national courts' assumption that national legislatures do not intend to legislate contrary to prior European obligations, often developed from separately established national doctrines which assume legislative fidelity to treaty obligations. As such, the solution to the lex posterior problem of EC law in the national legal orders rests on these national legal doctrines combined with pervasive national legislative self-restraint. Political self-control in the Member States supports the European legal order.

EU Law and Semiotics

The European Union is one of the ‘big ideas’ of the twentieth and twenty-first centuries and has been built on the idea of the European Community, which it supersedes. Seen in this light the emergent law of the European Union is becoming omnipresent in so many ways and yet it does not appear to have been the subject of as much semiotic study as it deserves. This paper takes a multilingual stance and explores emerging EC and EU law from a perspective of a lawyer-linguist practitioner in the field. The purpose is to describe a range of practitioner ‘realities’ and to explore how semiotics provides a tool for analysis and insights for a better understanding and awareness of EU law, with particular emphasis on the legislative, or law-making aspects.

The Compatibility of the Polish State’s Golden Shares with EC Law

The paper deals with the issue of the compatibility of the Act on Special Powers of the Treasury and Their Exercise in Companies of Special Importance for Public Order or Public Security with the freedom of capital movements in the context of ECJ jurisprudence. The first part of the paper analyses the concept of the freedom of capital movements, as well as the concept of the golden share as a restriction on this freedom, on the basis of individual ECJ judgments. The next part covers legal solutions adopted in the Polish Act, namely its subjective scope, the rights of the Minister of Treasury in companies in which the State Treasury is entitled to a golden share, the nature of these rights, and the institution of Treasury observers. The final part of the paper examines the compatibility of the golden shares model adopted by the Polish legislator with ECJ jurisprudence. In particular, the authors seek to predict what the ECJ would hold if the European Commission were to bring an infringement case against Poland. This analysis deals with the following issues: the Polish Act as a restriction on the freedom of capital movements, the possible justifications of this restriction and the proportionality of the golden shares model adopted by Poland. As their final conclusion, the authors express the view that the Polish provisions governing the State Treasury’s golden shares in principle conform with the ECJ’s guidelines, although some features of the Polish golden share system can be questioned.

Passing-on Defence and Indirect Purchaser Standing: Should the Passing-on Defence Be Rejected Now the Indirect Purchaser Has Standing after Manfredi and the White Paper of the European Comm

The European Court of Justice (ECJ) recognized in Courage v. Crehan and recalled in Vincenzo Manfredi v. Lloyd Adriatico Assicurazioni SpA the right of ‘any’ individual to claim damages for infringements of Articles 81 and 82 EC. As a reaction to both judgments, the European Commission published, after the Ashurst report, a Green Paper and later a White Paper on damages actions for breach of EC antitrust rules. Two of the obstacles that private parties face in antitrust damages action are the indirect purchaser standing and the passing-on defence. This paper analyses both the indirect purchaser standing and the passing-on defence in a comparative law perspective, between the law of the United States and EC law. This paper finds, after analyzing the US case law and the current economic discussion around the passing-on issue, that it is too difficult for the judiciary to calculate the passing-on. This paper finds therefore that the choice to allow or reject both the passing-on defence and indirect purchaser standing is policy related. Finally, the passing-on defence and indirect purchaser standing in the EU and the European Commission’s White Paper is discussed. This paper finds that the European Commission’s choice to allow both the indirect purchaser standing and passing-on defence is justified from the perspective of policy considerations. Nevertheless, this paper concludes that the European Commission did not succeed in providing strong solutions to the problems that are associated with the indirect purchaser standing and the passing-on defence.

The Impact of the Internal Market on Private Law of Member Countries

The papers collected in this Working Paper are the fruit of the Seminar ‘The Impact of the Internal Market on Private Law of the Member States’, which was organized by Profs. Fabrizio Cafaggi, Hans- Wolfgang Micklitz, and Norbert Reich at the European University Institute in the spring semester of 2009. The papers collectively aim to improve the understanding of the multi-level interplay between primary EC law and national private law. As such, the authors address the pressing topics of the shifting public – private divide in Community law, the impact of fundamental rights on Internal Market and national private law, the restrictive effect of national private law on the market freedoms, and the duty of national courts to ex-officio raise Community law in domestic legal disputes.

Taxation of Cross-Border Dividends in Greece: In Line with EC Law Requirements

Using as a motive the infringement procedure of the European Commission against Greece for discriminatory tax treatment of inbound dividends and the subsequent judgment of the ECJ in Case C-406/07, Commission v. Greece, which formed the causa of a radical legislative reform of the Greek regime governing taxation of dividends, the author conducts, in this article, a detailed examination of the Greek dividend tax rules, under the perspective of Community law requirements in this field. In that respect, the author performs an analysis of the extensive case law of the ECJ on dividend taxation, and draws case law principles which, together with the Parent-Subsidiary Directive provisions, constitute the point of reference of the inquiry undertaken. With the example of the Greek dividend tax systems as a tool, the author displays how exemption, imputation and final withholding tax systems are applied in practice and how EC law affects their function and interaction in cases of crossborder dividend distributions.

National Tax Sovereignty and EC Fundamental Freedoms: The Impact of Tax Obstacles on the Internal Market

This article explores how the European Court of Justice (ECJ) has approached the obstacles to the internal market arising from national provisions in the field of direct taxation. Tax obstacles are not always a consequence of national rules incompatible with the EC Treaty. The first part of this article deals with the different types of impediments to the internal market. The second sets out the approaches adopted by the ECJ when analysing the compliance of these tax measures with EC law, namely, the per-country and the overall approaches. The author finally evaluates the impact of another approach (the internal consistency test), which could be adopted by the ECJ in order to overcome some of the drawbacks inherent to the abovementioned approaches.

Avoidance of Double Taxation and Its Interaction with European Triangular Arrangements

In this article, the authors discuss triangular situations similar to Saint-Gobain. The focus is on the interaction between double tax convention law and EC law. The position of the permanent establishment state, the residence state, and the source state will be studied. Central in this article Company X established in state R with a PE situated in state P that acts as a ‘recipient’ of passive income paid by company Y from state S. The authors conclude that, in the first place, state R has been designated to prevent double taxation by means of an exemption or a credit. Secondly, if state R uses the exemption method, the responsibility switches over to state P and state S together. Not only must state P (as a Member State) treat a PE as a resident for treaty application, but also state S (as a Member State) has this obligation if a remaining juridical double taxation is caused by neither state R nor state P. This conclusion is not negatively affected by Damseaux. Thirdly, if state R uses the credit method both for PE profits and for passive income, it is obliged to apply the credit method in accordance with both the R-P Double Tax Convention (DTC) and the R-S DTC. Then, there is no European obligation for state S to mitigate the source state taxation.

Pro Forma Registration of Companies: Why a Brass Plate in the Host Country Is Enough in Some Respects, but Not in Others

EC law has accepted pro-forma establishment of companies as a consequence of the freedom of establishment. Although in this context companies may also speculate on national differences in tax law, here they are required to show some substance. Werlauff explains the state of affairs and it consequences.

Transfer of Residence within the European Union: The Treatment of Pre-Existing Losses – Part 2

In this two-part article, the treatment of pre-existing losses upon a transfer of residence within the European Union is discussed. In Part 1, EC law concepts, the ideal versus actual tax treatment and ECJ case law regarding treatment in the departure state were considered. Part 2 focuses on ECJ case law regarding the arrival state, secondary EC law and possible solutions to the issues discussed.

Recent Developments in EC Environmental Policy and Law

AbstractThis section briefly describes the significant political initiatives and acts of legislation adopted in the environmental field from August 2009 until December 2009. Part one gives an overview of the relevant political initiatives and part two describes the relevant legislative acts adopted in this period.