NOMA: LDREU 2206 Internal Market Law January 22nd 2024 Instructions - Before you start, write your NOMA in the top left corner of this document (numbers only, without hyphen or space). NOMAs have 8 digits. Please do not write your name anywhere on your exam. - The duration of the exam is 2 hours. - Do not change the font size to squeeze in more text in the allocated space. - All your answers must contain adequate explanations and references to relevant legal sources. - References. In your answers, you may use short names for cases and legislation (e.g., ‘Cassis de Dijon’. Use footnotes for full references. - Problem question. Bear in mind that you are answering someone’s question. Make sure your answer is intelligible for that person. - Examples must be explained in a way that is intelligible for a lawyer who is not familiar with the subject-matter. Do not write things like “as we discussed in class…”. Assume your reader was not in class with you. - Any attempt at cheating will be reported to the University’s authorities. - At the end of the exam, save your document in pdf format. In Word, use the menu File > ‘Save as’, choose a location (preferably the Z drive) and, in the ‘format’ dropdown menu, choose "pdf". Pay attention to the location you have chosen as you will need to browse for the file. - Next, log in to Gradescope https://www.gradescope.com/ > Login (top right). Choose ‘Login with School Credentials’, then select UCLouvain. Then use your UCLouvain login and password. You will then see the LDREU 2206 course and today's exam. Click on "Exam January 22nd 2024" and upload your pdf file (either from disk Z or from wherever you saved it). Advice - Use scrap paper and think your answers through before writing. - Divide your time roughly equally between part I and part II. I. Questions 1. The Commission has introduced a proposal for a Direccve “Establishing the European Disability Card and the European Parking Card for persons with disabilices”. On the Europa Website, the two cards are presented as follows European disability card The card will serve as a proof of disability status across all EU countries. It will grant cardholders equal access to special condiIons and preferenIal treatments anywhere in the EU. The special condicons apply when using public transport, adending cultural events and visicng museums, leisure and sports centres, amusement parks, and more. They can take the form of, among others: • free entry • reduced tariffs • priority access • personal assistance • mobility aids The European card will complement naIonal disability cards, which will concnue to be awarded by naconal authorices, based on their own criteria. European parking card for persons with disabiliIes The improved version of this card will guarantee use of parking spaces and facilices reserved for persons with disabilices in all EU countries. It will replace naconal parking cards. Explain what EU regulatory technique(s) and legal principle(s) underpin this new scheme. Iden%fy each technique and legal principle, explain it in general terms as you would to someone who is not familiar with EU law or the interplay between EU and na%onal law, and explain how it applies in the case at hand. Feel free to analogise this scheme with others that you know and explain how they are similar (and, possibly, different). 20 lines maximum 6 points The European disability card will facilitate the mutual recogni1on of the status of a handicapped person. Mutual recogni1on is a key principle of EU law. It creates an obliga%on for MS to recognise a situa%on that has been legally cons%tuted in another MS. Its origin is traced back to the Cassis case,1 in which the Court ruled that, unless a MS could demonstrate that it has specific regulatory objec%ves that could legi%mate a restric%ve measure, a good that is legally produced and marketed in another MS should be allowed onto the market. While the principle is clear and applies to many situa%ons beyond free movement of goods, it is oNen necessary to facilitate its opera1on through EU legisla1on. Examples in the area of free movement of persons include the recogni%on of degrees and qualifica1on, for which there is a direc1ve and a network of authori%es, and the recogni1on of documents a=es1ng personal status (birth, death, marriage, inheritance), which a regula1on facilitates. The disability card is another example of EU law facilita1ng free movement, here of persons with disabili%es, by harmonising how a personal status (handicap) can be proved. For authori%es in MS other than that which issued the card, this harmonised document facilitates the recogni%on of this status. Like the European model for Driving license or the European Health Card, the new disability card and parking card harmonise na1onal documents, issued by na1onal authori1es in order to facilitate proof of a right in another MS (right to drive, right to medical insurance, right to park in specifically designated spots reserved for handicapped drivers) 1 Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein, EU:C:1979:42. Short explanaIon The basic expectacon for this quescon was that you would recognise the Mutual recognicon principle (‘legal principle’). The addiconal expectacon was that you would idenIfy that harmonisaIon (‘regulatory technique’) helped support the smooth operacon of the Mutual recognicon principle. Feedback Many of you ignored the first sentence of the presentacon text, ‘The card will serve as proof of the disability status.' This is a pity, as it provided all the essencal elements for you to think about mutual recognicon and portability of a status. Instead, many of you seemed to have focused on the word ‘regulatory technique’ in the quescon and searched for a relevant passage of the course, which you were quick to idencfy as an overview of legal techniques at the beginning of the course (the internal market toolbox). Some of you offered a summary of that part, somecmes almost forgegng to answer the quescon or omigng to make links between your summary and the quescon. The thought process seems to have consisted in asking ‘which If the 4 tools fits beder’? There is nothing wrong in thinking along these lines, but you should have checked that your answer was at least consistent with the informacon you were given in the text of the quescon. Some said that the disability card was an opIonal regime, like Societas Europea. It is not. A disabled person will be able to hold a naconal disability card AND a European disability card. By contrast, a corporacon is NOT incorporated both in a Member State AND as an SE but either as one OR the other. Here, the descripcon said that the European disability card will ‘complement’ the naconal disability card. Handicapped persons will have the choice to take the European disability card if they travel (just like you can ask for the European health insurance card). They can keep their naconal card and will not have to choose between the two cards. Some of you seem to have made a confusion about the meaning of ‘opconal regime’ (not about ‘opconal’ but about ‘regime’). The card does not create an EU regime for handicapped persons (an EU set of condicons to qualify as a handicapped person, complete with rights and obligacons). It merely facilitates mutual recognicon of the status of a handicapped person, which remains governed by naconal law. Some of you even wrote that naconals would have a choice between the naconal card and the European card. This was not in the descripcon, and you could have checked. This is a case of ‘confirmacon bias’: you have an idea, and your mind ‘wants’ it to work … to the point that it generates false arguments. This is how the mind works. You can’t help it. But you can and should check the facts before wricng. HarmonisaIon Both cards are created through harmonisacon measures (not just the parking card). Indeed, the proposed direccve (which is a harmonisacon tool) covers both, as menconed in the quescon. For the disability card, the project is only to facilitate proof of the disability status. Every MS remains competent to decide who qualifies as a handicapped person. Persons enctled to this status under naconal law will be able to obtain a European disability card to facilitate mutual recognicon of this status. A relevant analogy is the regulacon facilitacng mutual recognicon of official documents related to personal status (birth, death, marriage, inheritance).2 MS are competent to regulate adribucon of a name, legal condicons for establishing that a person is dead, who qualifies to marry, inherit, etc. and EU law creates a mulclingual template that will make it easy for naconal administracon to create a document that will be easy to idencfy and understand for naconal administracons in other MS. Belgium can scll have a Belgian birth cercficate (or even regional ones) and parents who need it will request an addiconal document in the common European format from the naconal administracon. Another relevant analogy in the field of free movement of ciczens is the COVID cercficate. Naconal authorices first created naconal cercficates. Then, when the regulacon was introduced, it was possible to obtain a cercficate in the European format that was recognised in all EU MS. For the parking card, a relevant analogy would be the driving license. Naconal authorices only issue European format driving licenses. Several of you embarked on more or less developed reasonings about the health competence of the EU. But handicap is not an illness! Mobility of handicapped ciczens isn’t a To sum up, the single most common error was to explain in abstract terms something very general about EU law (harmonisacon, posicve or negacve integracon) without making links to the quesIon. This led many to spend cme on irrelevant elements, e.g. explaining that the MR principle was not absolute and had limitacons (this is not relevant because of the harmonisacon context: the direccve is more precise than treaty arccles under which the case law developed) or explaining that the MR principle does not apply to the gambling sector. Whenever something was off-topic (not linked to the quescon), I used the annotacon ‘How is this relevant here?’ Grading The grading is over more than 6 points, which means it was possible to have 6/6 without menconing every element menconed in the model answer and in the table below. For example, it was possible to have 6/6 without menconing Cassis de Dijon as the origin of the Mutual Recognicon principle. For most elements, there is one point but a simple mencon without adequate explanacon earns only 0,5 point. The elements in blue are those I was expeccng. The elements in purple are addiconal relevant elements from students’ answer which I also credited with points. 2 RegulaHon (EU) 2016/1191 on promoHng the free movement of ciHzens by simplifying the requirements for presenHng certain public documents in the European Union, OJ L 200, 26.7.2016, p. 1–136. Expected elements Idencfying Mutual recognicon principle (MR) Explaining the Mutual recognicon principle in general terms Menconing Cassis Cassis judgement correctly referenced Explaining of how the MR principle operates in Cassis Idea that legislacon is necessary to facilitate the operacon of the MR principle Examples of applicacon of this principle Explanacon that legislacon is at work in these examples Idencficacon of what EU law does: facilitate proof through harmonisacon AddiIonal elements Posicve integracon Cards facilitate free movement of ciczens / non-discriminacon on grounds of naconality Cards help implement non-discriminacon on grounds of handicap (Charter of fundamental rights) Card makes the status of handicapped person “portable” Points 1 0,5 / 1 (depending on correctness and precision) 0,5 0,5 0,5 / 1 (depending on correctness and precision) 0,5 / 1 (depending on relevance and precision) 0,5 / 1 (depending on relevance and precision) 0,5 / 1 (depending on clarity and precision) 0,5 / 1 (depending on clarity and precision) 0,5 / 1 (depending on clarity and precision) 0,5 / 1 (depending on clarity and precision) 0,5 / 1 (depending on clarity and precision) 0,5 / 1 (depending on clarity and precision) 2. Illustrate a stringent proporconality review with an example from the case law and explain why you chose it (in your example, why is the proporconality review stringent? How does it differ from a lax proporconality review?). You may choose an example from the course pack. 10 lines maximum 4 points Familiapress3 is a good example of a stringent proporconality review. In this case, the Court ruled that to demonstrate that the measure is proporconate, naconal authorices must prove that the policy objeccve “cannot be achieved by less restriccve means”.4 This is a very demanding standard, as the referring court must conduct an in-depth counterfactual invescgacon into the effect of alternacve measures that could have been adopted. The reason why the review is stringent is not that the test is three-pronged (balance of interests in addicon to suitability and necessity tests). Such a three-pronged test can perfectly well be applied in a lax manner. What makes the review stringent is not the test itself but how it is applied. As stated above, it is the interpretacon of the necessity test combined with the evidencary requirement (what evidence must be adduced) which make the review stringent. By contrast, in Commission v. Italy (trailers),5 the Court highlights MS’ margin of discrecon.6 It clarifies that MS are not under an obligacon to prove that they have chosen the least restriccve measure ”7 and grants them leeway to invoke administracve expediency to juscfy the choice of a measure that is easy to administer even if it may be more restriccve of free movement than alternacve measures.8 Feed back Common errors (and errors not so common but worth noIng) General approach - - Taking a normaIve stance, i.e. speaking about when proporconality review should be more intense (the quescon was to illustrate through an example a case when it was intense) Trying to explain why proporconality review is somecmes more stringent and somecmes less (this is very hard and it was not asked) Substance - 3 4 Stacng that the proporconality review is generally more intense when the naconal measure is more restriccve or when the case is more complex (and without saying what makes one case more complex than another) Case C-368/95, Familiapress, EU:C:1997:325. Familiapress, para 34. 5 Case C-110/05, Commission v. Italy, EU:C:2009:66. Commission v. Italy, para. 65. 7 Commission v. Italy, para. 66. 6 8 Commission v. Italy, para. 67. - - - Saying that Keck is the foundacon of the proporconality test: there is no proporconality test in Keck (the focus is encrely on step 1 of the reasoning: whether the naconal measure consctutes an MEE) Saying that the juscficacon must be proporconate (it is not the jus%fica%on that has to be proporconate + proporconate to what?) It is but the restric%on to free movement that must be proporconate to the advancement of the policy goal juscfying the restriccon) Conflacng who conducts the review (Court of Juscce or referring court) with how intense the review is. When the Court of Juscce gives very precise guidance to a naconal court (as in Familiapress or Bressol and Chaverot) as to what complex appraisal of facts it must conduct, it indicates that the proporconality scrucny must be stringent. That does not mean that the Court itself is conduccng a stringent review. And it does not always indicate which way the referring court ought to decide (it might genuinely depend on appraisals of facts that the naconal court is best placed to conduct). Grading Few of you answered the quescon completely and correctly. I adapted the grading and gave one point for a correct exposicon of the proporconality test (even if it was not linked with the analysis of examples) and 0,5 point for some explanacon of how the intensity of the proporconality varies in general (though this was not asked). Expected elements Example of stringent proporconality review (Familiapress or other). Name of case Correct reference to the case Explanacon why the proporconality review is stringent Example of lax proporconality review (Commission v. Italy (trailers) or other). Name of case Correct reference to the case Explanacon why the proporconality review is stringent Explanacon of the proporconality test Points 1 0,5 0,5/1 (depending on clarity and precision) 1 0,5 0,5/1 (depending on clarity and precision) 0,5/1 (depending on clarity and precision) General advice (potencally useful for other exams) - You don’t need to say that something is important (e.g. that proporconality is a ‘huge’ criterion) when the quescon isn’t about how important that something is but, for example, how it works. Hyping up the subject mader without answering the quescon is not going to get you any points. II. Hypothetical The French government want to regulate the sale of e-cigaredes. It is contemplacng introducing either of 2 measures: • Reserve sale of e-cigaredes to pharmacies • Reserve sale of e-cigaredes to tobacco shops eSmoke is a company based in Waterloo. It sells e-cigaredes in Belgium. Its stores are "concept stores" with a luxurious feel to them. They carry a wide range of electronic cigaredes and liquids, including special imports from Asia. eSmoke wants to expand its business in France and open similar shops there. Having read about the French government’s plans, the CEO of e-Smoke worries that this may mean the end of his French dream. He is also unsure what he should tell the board about the company’s plan to expand in France. Write a memo addressed to him, where you analyse the hypotheccal French measures from the point of view of EU law and advise him on the best course of accon for eSmoke and possible concngency plans. Feel free to dis%nguish scenarios as needed. 10 points 2 pages maximum The measures that the French government is contemplacng could prima facie jeopardize eSmoke’s plans to expand operacons in France. Indeed, eSmoke does not qualify as a tobacco shop or a pharmacy. Both these types of retail outlets are presumably subject to a specific authorisacon regime, and eSmoke would not qualify as either a French tobacco shop or a pharmacy. If either measure is adopted, eSmoke would be deprived of an opportunity to do business in France. [Obstacle] This makes it worthwhile to invescgate whether it could be argued that the contemplated measures would violate EU law. Should this be the case, the measures would be less likely to be adopted (the French lawmakers will probably realise at some point that they stand on weak legal ground). If the measures violate EU law but are nonetheless adopted, it would, in principle, be safe for eSmoke to ignore them. This is because of the primacy principle and the direct effect of free movement rules. In case of prosecucon, eSmoke could invoke free movement rules before a French court (direct effect). More precisely, it could raise a ‘Eurodefense’, that is, admit to violacng French law but argue that French law is not compliant with EU law. The French court would need to set aside the measure restriccng the sale of e-cigaredes (primacy principle). eSmoke could then carry on doing business in France. For this course of accon to be safe, it is important to assess the strength of EU law arguments that eSmoke could raise. First, we need to determine which freedom of movement to invoke. This is not encrely straighuorward at this stage and deserves careful examinacon. Free movement of goods could be invoked because both measures would regulate where goods can be sold (in what type of stores). Yet, as will be explained below, it is not in eSmoke’s interest to invoke free movement of goods. It would be more strategic to invoke freedom of establishment or freedom to provide services. Strategic consideraIons Why it would not be useful to invoke Free movement of goods E-cigaredes can be traded for money and thus qualify as goods under EU law.9 If the ecigaredes that eSmoke sells are not all produced in France or imported from third countries directly to France, they cross internal borders of the EU. In that case, rules on free movement of goods could be invoked. More precisely, arIcle 34 TFEU could be considered. It prohibits naconal law from hindering imports of goods. In its case law interprecng this provision, the Court of Juscce has drawn a discnccon between naconal measures regulacng what goods may be imported and measures regulacng how goods may be sold. The lader are called measures regulacng selling arrangements. Neither of the two measures that the French government is contemplacng would set standards for e-cigaredes. In this sense, they do not regulate goods. Either one would regulate where e-cigareXes may be sold, thus consctucng measures regulacng selling arrangements. Since Keck (a case from the early 1990’s which has been much discussed but never overruled),10 these measures are appraised under a non-discriminacon test. If the rules are non-discriminatory vis-à-vis traders and non-discriminatory vis-à-vis goods, they fall outside the scope of arccle 34 TFEU. This means that EU law cannot be invoked against the naconal measures. [Explaining rules in general terms] In the instant case, the French measures would likely be held non-discriminatory vis-à-vis traders because a French company similar to eSmoke would see its business opportunices annihilated in the same way as a Belgian company. In other words, the measure applies in the same way to sellers based in France and those based in other EU Member States. This makes the measure non-discriminatory vis-à-vis traders. Equally, the measure would also be nondiscriminatory vis-à-vis goods. This is because the sale of e-cigaredes would be restricted in the same way irrespeccve of which Member State they come from. The same restriccons would apply to e-cigaredes manufactured in France as to e-cigaredes manufactured in any other Member State. Therefore, either French measure would pass the Keck test. Therefore, a French court seized of the mader would rule that the measure (either of them) does not have to be checked against ar%cle 34 TFEU. [Explaining how rules apply to the facts of the case]. In other words, invoking the free movement of goods is not the way to go in order to contest the French measures. [Parcal conclusion: what does this mean for the client?] To determine whether eSmoke should invoke freedom of establishment (arccle 49 and 52 TFEU) or freedom to provide services (arccle 57 TFEU), it is helpful to discnguish different scenarios as to how eSmoke will organise its cross-border accvices. If eSmoke’s plan is to create an encty based in France which qualifies a subsidiary, a branch or an agency, then freedom of establishment would be the correct freedom to invoke against the French measure. If eSmoke planned to operate from Belgium and sell goods in France without creacng an establishment (in the above sense), it could invoke freedom to provide services (the accvity of distribucng goods qualifies as service). This would be the correct freedom to invoke if eSmoke 9 Case 7-68, Commission v Italy, EU:C:1968:51. Joined cases C-267/91 and C-268/91, criminal proceedings against Bernard Keck and Daniel Mithouard, EU:C:1993:905. 10 intended to sell online (which does not seem to be menconed in the current plans) or open temporary pop-up stores to test the French market. Even if the concept stores it plans to open in France are not operacng as a separate legal encty (no legal personality) and are all managed from the Belgian headquarters (no commercial autonomy), they would qualify as ‘branches’ and this would trigger the applicacon of freedom of establishment. A forcori if the French stores are managed by an encty which has commercial autonomy and/or legal personality, freedom of establishment would apply. If the French encty has commercial autonomy but no legal personality, it would qualify as a branch and if it does have legal personality, as a subsidiary. In either case, freedom of establishment would also apply. The French measures violate freedom of establishment If it is a company legally consctuted in Belgium (or in another Member State), eSmoke benefits from the freedom of establishment under Arccle 49 TFEU. As menconed, this entails the right to create agencies, branches and subsidiaries in other Member States. In addicon, the Services Direccve11 clarifies the limits of Member States’ regulatory freedom in relacon to freedom of establishment. In either version, the French scheme consctutes an authorisaIon scheme: both tobacco shops and pharmacies are regulated, and the opening of either type of sales outlet is subject to authorisacon. This scheme should, therefore, be analysed under ArIcle 9 of the Services DirecIve, which harmonises when Member States are allowed to keep such schemes in place. It provides that authorisacon schemes are only compliant with EU law if they meet three cumulacve condicons (a) There is no discriminacon between service providers based on their place of establishment (b) the need for an authorisacon scheme is juscfied by an overriding reason relacng to the public interest; (c) the objeccve pursued cannot be adained by means of a less restriccve measure The first condicon means that French legislacon should treat an operator such as eSmoke (based in a Member State other than France) exactly like a similar operator established in France. This seems to be the case: a hypotheccal French-based eSmoke would also be banned from selling e-cigaredes if either measure came into force. The limitacon creates a disadvantage for all sellers of e-cigaredes, not just the ones who, like eSmoke, are not established in France. The second condicon means that the French government would have to adduce a juscficacon for introducing the new limitacons on the sale of e-cigaredes. Presumably, it would be the protecIon of health. This is a valid juscficacon. It is menconed in the Treaty in relacon to all freedoms of movement and qualifies as an overriding reason within the meaning of the direccve. The third condicon is proporconality: an authorisacon scheme is a very restriccve measure, and it should only be allowed when there are no regulatory opcons available to achieve the policy goal while restriccng freedom of establishment less. This condicon is the one that seems hardest to meet for the contemplated French scheme. While we don’t know how the 11 DirecHve 2006/123/EC on services in the internal market, OJ L 376, 27.12.2006, p. 36-68. French government came to think of those measures or what alternacve it has considered, it seems very difficult to imagine how reserving the sales of e-cigaredes to tobacco shops could possibly reduce the consumpcon of tobacco in any form. Tobacconists are not in the business of offering health advice. They have the same incencves to sell as any other type of shop. If, instead, the sale of e-cigaredes was reserved to pharmacies, the French government might be in a slightly beder posicon to defend its measure. Indeed, pharmacists are qualified to offer health advice and could conceivably be under a duty to do so. This said, it is not clear how making smokers shop at pharmacies rather than other types of shop would change their behaviour. If the government has not gathered convincing data on this crucial point, it could be difficult to defend the measure. In conclusion, reserving the sale of e-cigaredes to tobacco shops seems in violacon of arccle 9 of the Services direccve. If that measure were introduced, we could confidently advise to ignore it and, if French authorices raised any objeccon to the opening of eSmoke stores in France, resort to the Euro-defense. If the government went for reserving the sale of e-cigarede to pharmacies, a somewhat more caucous stance is advisable. While the measure would seem difficult to juscfy, this could potencally give rise to more discussion and therefore more protracted proceedings. In any event, the present analysis could be shared with the French authorices to try and dissuade them to carry on with their current project of strict regulacon of the distribucon of e-cigaredes. This would most easily be done by seizing SOLVIT. Grading (over 19) Expected elements Analysing facts: cross-border element 1 Points Looking for a cross-border element: 0,5 Correctly idencfying a cross-border element 0,5 Analysing French measures: main Idencfying a regulatory obstacle 0,25 characterisccs 1,5 Good explanacon of why the measure would consctute an obstacle to the applicable freedom 0,25 Non-discriminatory nature 0,5 Idencfying likely juscficacon (health) 0,5 Analysing the applicability of various Freedom of establishment 0.5 freedoms of movement 1,5 Free movement of goods 0,5 Freedom to provide services 0,5 Explaining why this freedom/these 0,25/0,5 (depending on correctness and freedoms of movement apply (or not) exhauscvity) to the facts 1,5 + 1 if the possible applicacon of several freedoms is explicitly considered Cicng (potencally) applicable rules 1,5 Relevant treaty arccle(s) 0,5 Services direccve 0,5 Specific provisions in the direccve 0,5 Explaining why rules apply to facts 0,5 Why services direccve applies 0,5 (explanacon for why treaty rules apply already credited under ‘why this freedom applies’) Explaining what the rules mean (Content of rules in the abstract) 1,5 Explaining effect of rules 3 Explaining what the rules mean for eSmoke 1,5 Applying the rules to facts 4 Conclusion 1,5 0,5/1/1,5 (appraised globally for all rules cited) (depending on correctness, complexity and precision) direct effect of treaty rules (0,5/1); direct effect of direccve (condiconal) (0,5/1) primacy (0,5/1) (depending on mencon/source cited) 0,5/1 (depending on correctness, completeness, and suitability of explanacon) Pracccal meaning of primacy and direct effect: Eurodefense 0,5 Discnguishing scenarios (how eSmoke plans to operate) 0,5/1 (depending on precision and completeness) Analysis of jusIficaIon 0,5/1 (depending on precision and completeness) ProporIonality assessment: discnguishing between the two regulatory opcons for 0,5/1 Bonus for parccularly good explanaIon and/or reasoning 0,5/1 0,5/1 (depending on completeness and level of pracccality) Solvit 0,5
