Examiners’ reports 2015 LA3024 EU law – Zone A Introduction The examination paper consisted of a mixture of essay questions and problem questions. The content reflected the subject guide and the recommended readings, as based on the syllabus. It should be noted that this was the first examination taking place after an in-depth revision of the subject guide. The new guide focuses much more on the substantive areas of EU law such as free movement, competition and protection of fundamental rights. The discussion of institutional structure, powers of the different institutions and so on is now much more limited. The examination fully reflected the content of the new guide and future candidates should remember that past examination papers and Examiners’ reports from 2014 and earlier will not reflect the new focus of the module. Remember to consult the Recent developments before your examination. Specific comments on questions Question 1 The Estonian Child Protection Act (fictitious) introduces a system of prior authorisation for products that might have been manufactured using child labour. The preamble to the Act makes reference to child protection, a cherished value of the Estonian Constitution. The Child Protection Council (CPC), a governmental agency, is responsible for granting prior authorisations and is required to respond to applications within three months of receiving an application. The CPC is composed of delegates from the Ministries of Labour and Education and representatives from the business community. Each year the CPC publishes an indicative list of products for which prior authorisation needs to be sought, regardless of whether the product is already in free circulation within the European Union. Taste-cha is a business with several cafés in Estonia. They import, and sell in their cafés, a special tea blend called ‘Amber Brew’. The tea is produced in China but Taste-cha buy it from a supplier in Poland. Taste-cha is prosecuted because they are selling ‘Amber Brew’ without authorisation from the CPC and are facing imprisonment. In court, Taste-cha argue that the system of prior authorisation infringes both free movement of goods and the freedom to provide services. The Estonian government urges the court to reject these claims, as any potential restrictions to economic freedoms are justified by the imperative to protect fundamental rights. The case reaches the EUCJ for a preliminary ruling. You are the Advocate General. Write your Opinion for the Court. LA3024 EU law 2 General remarks This question tests your knowledge of free movement of goods and services, the use of justifications and the proportionality test. Law cases, reports and other references the examiners would expect you to use Case 275/92 Schindler  ECR I-1039; Case 8/74 Dassonville  ECR 837; Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung fur Branntwein (Cassis de Dijon)  ECR 649; Joined Cases C-267 and C-268/91 Keck and Mithouard  ECR I-6097; Case 112/00 Schimdberger  ECR I-5659. Common errors Not discussing distinctly/indistinctly applicable measures. Not identifying human rights protection as a justification. Not discussing proportionality. A good answer to this question would… point to two preliminary issues: the CPC is of course part of the state (notion of public body in EU law) and EU law applies even to products originating from three countries when they are in free circulation in the EU. As far as the possible breach, the prevailing aspect here is certainly free movement of goods (centre of gravity test, Schindler case) although looking at services is acceptable as well. There is no doubt that the system of prior authorisation needs to be classified as an obstacle to trade (Dassonville test, etc.). The measure also looks discriminatory, as it seems to apply to imported products only, so would be a violation of Article 34 TFEU. The main question here is whether it could be justified. Possible defence based on protection of national constitutional rights should be examined. Cases such as Schmidberger, C-36/02 Omega and Viking could be relevant. Very good answers could also mention child protection rights under international conventions and under the EU Charter. Finally, sanctions are very severe (prison), so perhaps disproportionate. Poor answers to this question… failed to identify the different measures and did not discuss proportionality or human rights defence. Student extract As held in Cassis de Dijon, when products have been lawfully produced and marketed in one Member states, they must be admitted to a market of another Member state. In this case Taste-cha buys the tea from a supplier in Poland suggesting that the product has been lawfully market in Poland. Hence it is unlawful under art 34 TFEU to impose a system of prior authorization. […] However there are derogations available under art 36 TFEU. Since the intention of imposing the system of prior authorization is to protect children as not be exploited by child labour, it could fall under Article 36 as being justified on grounds of public policy. In addition if it can be shown that this is an indistinctly applicable measure, the measure could be possibly justified by mandatory requirements such public health, protection of consumers etc. This list is not exhaustive and the Court has been in the past rather generous to all for these justifications, for example in Doc, Gourmet and particular in Schmidberger, a case justified on human rights protection, so very similar to this case. What is needed to be successful in the mandatory requirement justification is however that the rules need to be necessary. Comment on extract The passage is substantially correct and properly structured. If follows the traditional two steps analysis of free movement issues: establishment of a violation followed by possible justification based on the protection of certain public aims. The Examiners’ reports 2015 3 answer is supported with relevant and appropriate case law. The candidate, in an earlier passage not quoted here, first referred to the general principle of free movement enshrined in the Dassonville case (effects based approach). This is a good starting point. In the passage above, the candidate discusses the nature of the measure and concludes correctly that it applies indistinctly. The reference is to Cassis de Dijon. It is always good practice to refer to seminal cases. The candidate could have added some more recent judgments on national prior authorisation (e.g. Ker-Optika; Dynamic Medien). The identification of whether the measure is a distinctly or indistinctly applicable one is very important in order to determine what kind of justifications are available to member states. The candidate correctly refers to both Article 36 of the Treaty or to case law exceptions. The candidate refers aptly to human rights protection as a possible ground and identifies Schmidberger as the relevant precedent. The language of the answer could have been more accurate and, more seriously, the answer does not satisfactorily provide advice for the company. The candidate simply states that the measure could be considered proportionate on the grounds of human rights. However, the candidate does not give us any indication why this could be so. Was the measure suitable? Was there any other less restrictive alternative available? Although the facts of the case are scarce candidates are expected to at least attempt an assessment of how the proportionality test should operate. The mark for this answer would be in the 2.2 range. Interpretation of the question: satisfactory Relevance of the answer to the question: satisfactory Substantive knowledge: satisfactory Use of authorities: good Articulation of argument: satisfactory Accuracy of information: poor Clarity of expression: satisfactory Legibility: good
Question 2 Articles 1 and 2 of the local tax regulation on satellite dishes adopted by the Liverton City Council (LCC) in 2014 (‘the tax regulation’) read as follows: (1) an annual tax on satellite dishes is hereby introduced; (2) the rate of the tax is set at £300 per satellite dish. Mr Bellamy, a Liverton resident lodged a complaint with the LCC against the satellite dish tax asking to be exempted from it. LCC refuse Mr Bellamy’s request for an exemption and so, he starts judicial review proceedings. He argues that the tax results in a restriction on the freedom to receive television programmes coming from other Member States which is contrary to European law and especially free movement of services. Advise Mr Bellamy. General remarks This question tests your knowledge of free movement of services, the use of justifications and the proportionality test. Law cases, reports and other references the examiners would expect you to use Case C-384/93 Alpine Investments  ECR I-1141; Case C-36/02 Omega  ECR I-9609; Case C-42/07 Liga Portuguesa de Futebol Proffissional. LA3024 EU law 4 Common errors Qualifying the measure under free movement of goods or under indirect taxes. A good answer to this question would… The measure is likely to be considered as an obstacle restricting access to the market under the case law interpreting Article 56 of TFEU (Alpine Investment; Gourmet). It could be argued that the impact on receiving TV channels from other member states’ providers could be greater (as satellite dishes can be used to receive these) while national terrestrial broadcasters are in a position of advantage. The tax could also be simply qualified as a measure that makes receiving a service more difficult. Depending on whether the measure is qualified as indistinctly or distinctly applicable, the grounds of justification can be either a new one (for instance protection of cultural and urban environment) or just a public policy argument under Article 52 TFEU. Finally, you should assess the proportionality of the measure. Poor answers to this question… failed to identify the correct freedom. Did not discuss possible justifications.
Question 3 ‘The attraction of an EU law scheme of protection of human rights risks sacrificing the national, legal, historical, and cultural traditions that characterise the pluralistic nature of Europe. The Court of Justice of the European Union (CJEU) should reflect very seriously on how to use the Charter of Fundamental Rights.’ Discuss. General remarks This question tests your knowledge of some very important recent developments: the Charter and the fast-developing case law of the Court. Law cases, reports and other references the examiners would expect you to use Case C-438/05 Viking Line Abp  ECR I-10779; Case C-236/09 Association belge des Consommateurs Test-Achats ASBL v Conseil des ministres; Case C- 617/10 Fransson; Case C-544/10 Deutsches Weintor; Case C-131/12 Google Spain; Case C-399/11 Melloni; Charter of Fundamental Rights. Common errors Limiting discussion to human rights protection as a general principle with no mention of the Charter. Giving a merely political answer on the role of human rights in the world. A good answer to this question would… analyse recent judgments such as Google Spain (right of privacy) or others such as Test Achats (no discrimination) where the Court used the Charter as a legality benchmark for EU law. Specific attention would be devoted to Article 51 of the Charter dealing with the binding effect of the Charter and its impact on national law (Fransson). The impact on the national clauses of human rights protection should then be discussed (see Melloni). Some considerations on the role of the ECJ relating to national constitutional courts or the ECHR could be included. Question 4 Strong Steel and Steel United are two European steel producing companies. There are eight steel producers in Europe. In terms of market share in Europe; Strong Steel has 41% and Steel United has 30%. In order to increase its sales in Poland, Romania, and the Czech Republic, Strong Steel offers a Examiners’ reports 2015 5 very attractive discounted price to new customers in these countries of 120 Euros per ton. Some managers at Strong Steel have been participating in meetings with Steel United in order to discuss a marketing strategy to survive the economic crisis. One of the meetings was attended by several other important European steel producers and all those present at the meeting agreed to increase the price of steel by 0.5%. Strong Steel has increased the price accordingly starting this month. You are employed by Strong Steel to advise them whether offering discounts in Poland, Romania, and the Czech Republic is compatible with EU competition law. Strong Steel also wonders whether the decision to increase the price by 0.5% could contravene EU competition law. General remarks This is a question on EU competition law, which tests knowledge of the case law. Law cases, reports and other references the examiners would expect you to use Case C-27/76 United Brands; Case C-62/86 AKZO; Case C-209/10 Post Danmark. Common errors Not discussing Article 102 TFEU. Making only general remarks on the importance of fair competition. A good answer to this question would… In relation to the discounts, you should discuss Article 102 TFEU and determine whether this is predatory pricing or not. Market shares should be assessed and a discussion made as to whether the 41 per cent of Strong Steel is indicative of dominance. Given that they have less than 50 per cent market share, there is no presumption of dominance, however, as per United Brands, Strong Steel has a high chance of being found by a court to be in a dominant position. Furthermore, some development as to what is predatory pricing, etc. should be made, as per AKZO. For a first class mark, you should offer advice: for example, saying that the price should not drop below the average total cost, and eventually mentioning Post Danmark would be excellent. In relation to the meetings, you should discuss Article 101 TFEU and determine whether this is a prohibited price fixing agreement. The elements of Article 101(1) should be discussed (agreement, undertakings, intra-EU effect, no de minimis, hard-core anticompetitive object), as well as the impossibility of justifying such agreement under Article 101(3). The client should be advised to immediately cease carrying out this agreement. For a first class mark, you would be expected to point out that a good strategy for Strong Steel would be to inform the competition authority/the Commission that they are involved in a cartel, in order to benefit from leniency. Poor answers to this question… did not discuss predatory pricing, did not give a determination on the price fixing agreement. Question 5 ‘The essence of the proportionality principle is that it makes it possible to combine a liberal pro free trade case law with a strong commitment to a welfare state and the preservation of certain state functions.’ Discuss. General remarks A question on one of the key EU constitutional principles – proportionality. LA3024 EU law 6 Law cases, reports and other references the examiners would expect you to use Examples from free movement law case law; Case C-112/00 Schmidberger; Case C-36/02 Omega; Joined Cases C-338/04, C-359/04 and C-360/04 Placanica  ECR I-1891; Case C-42/07 Liga Portuguesa de Futebol Proffissional. Common errors Not discussing proportionality across the four freedoms. Not giving a distinction on the proportionality test according to the grounds invoked. A good answer to this question would… discuss the meaning of the principle and the test used by the Court (suitability – less restrictive alternative and proportionality strictu sensu). You should discuss how the Court used it as an instrument of integration and market regulation – that is, to propose specific standards that member states had to apply (see, for instance, the labelling case law – Rau). You should, however, also analyse the recent case law of the Court. In the last few years the Court has been rather soft with member state derogations – a soft proportionality approach – relying on the national conception of certain possible justifications and deferring to the national scale of values (see for instance Omega and gambling case law). Poor answers to this question… gave an analysis mainly dealing with free movement of goods. Did not identify proportionality as a general principle of EU law. Question 6 In France, jobseekers who are in need of assistance may apply for the ‘basic benefits provision’ in order, inter alia, to meet their subsistence needs. The benefits granted thereunder are intended to enable recipients to lead a life in keeping with human dignity and are intended to cover basic subsistence needs, accommodation and heating needs. Ms Popescu and her infant son, both Romanian nationals, were refused by a local job centre the basic benefits provision. Ms Popescu and her son (who was born in France) have been living in France in the apartment of one of Ms Popescu’s sisters, who provides them with food and lodging. Ms Popescu has no professional qualifications and, up until now, has not pursued any professional activity, either in France or in Romania. Ms Popescu instructs you as a lawyer as to challenge the decision of the national authority to deny her and her son the ‘basic provision’. General remarks This question tests your knowledge of free movement of workers and citizenship. Law cases, reports and other references the examiners would expect you to use Case C-34/09 Zambrano; Case C-434/09 McCarthy; Case C-256/11 Dereci; Case C-333/13 Dano; Directive 2004/38 on the rights of EU citizens; Charter of Fundamental Rights. Common errors Not referencing citizenship, not using the Directive. A good answer to this question would… discuss the question both under Treaty provisions of free movement of workers and citizenship and under Directive 2004/38. It is difficult to argue that Ms Popescu should be considered as a worker as she never pursued an occupation in France. Another problem is that Directive 2004/38 makes the EU rights conditional on Examiners’ reports 2015 7 proving that the person in question is not a burden on the state. However, both individuals concerned are EU nationals and thus they benefit from the provisions under Articles 20 and 21 of the Treaty. You can refer to judgments such as Baumbast or Garcia Avello where the court linked the right to residence as citizens with respect for family life. It would now be necessary to refer also to the Charter of Fundamental Rights, and in particular to the provisions dealing with family life and the protection of children, as both provisions have been employed by the Court in many judgments. However, very good candidates would be aware of the recent judgment in Dano where the Court, on very similar facts, concluded that Germany was entitled to refuse certain kinds of welfare rights. Poor answers to this question… limited their discussion to the free movement of workers. Did not use new cases. Were ignorant of the relevance of the Charter of Fundamental Rights. Question 7 Some commentators argue that the judgments in Van Gend en Loos and Costa make it clear that once the transfer of sovereign rights is completed by the ratification of the Treaty, these sovereign rights have been relinquished to the Community [EU] and are amalgamated in the hands of a new legal entity. Under this new order ‘the effect on national law occurs as a result of a breach or a breakthrough of sovereignty. In other words, the result of this constitutive process is that when a member state enacts law that is contrary to directly applicable Community [EU] law, it attempts to act beyond and outside its sovereign rights and thus its law is a nullity’. (E.Stein) To what extent does EU Law violate national sovereignty? Discuss, with reference to the doctrine of supremacy. General remarks This question refers to the constitutional implications of the supremacy and its impact on uniform application of EU law. Law cases, reports and other references the examiners would expect you to use C-6/64 Costa v ENEL  ECR 585; C-106/77 Simmenthal (No 2)  ECR 629; Joined Cases C-6 and C-9/90 Francovich  ECR I-5357. Common errors Simply listing cases without discussing their implications. A good answer to this question would… discuss the significance of the doctrine of supremacy and in particular its impact on the use of international treaties and the new concept of limited sovereignty. A reflection on the very rigid stance adopted by the Court in cases such as Costa and Simmenthal should be developed as the question clearly invites you to reflect on the strategic use of supremacy to ensure the effective and uniform application of EU law via national courts. A case such as Francovich on state liability can also provide some useful pointers. Poor answers to this question… merely listed the requirements for direct effect of Treaty, Articles, regulations and directives. Did not discuss the implication of supremacy. Student extract The necessity of the Member States consent] can be seen in Brenner in which after the Maastricht Treaty, the German Constitution was still held to be sovereign. This judgment implies that while the Member State have give LA3024 EU law 8 up sovereignty that can always take it back and therefore they can be considered as the ‘Masters of the Treaties ‘ so they have not truly lost their sovereignty. One must also consider that the EU law is not truly sovereign. Firstly as it has only limited competence ie it only affects certain areas of the legislation of Member states, some areas of national soveireignity are left untouched. Secondly Member states are allowed by the Treaty itself to derogate from some provisions of EU law on the basis of arguments such a cultural and social differences (BWIN) or public safety (Italian mopeds) . Comment on extract This essay is generally good. In passages not quoted here, the candidate analyses the seminal cases on supremacy such as Costa v ENEL and Simmenthal. Then the candidate turns to some critical issues and asks the question: what are the possible limits of the supremacy doctrine? The candidate does this cleverly, by referring to the reaction of national courts (using the most prestigious – the German constitutional court) and by reminding us that the EU does not have unlimited competence and that member states still enjoys some ‘pockets ‘of sovereignty as EU law itself allows them to derogate from certain basic EU principle to protect their aims. The essay shows, therefore, a capacity to not only analyse the specific issue (EU doctrine – national courts reaction) but to link it to other parts of the syllabus showing an overall command of the topic. On the minus side, the style is slightly too informal and sometimes the passages could have been better written. The mark is in the 2.1 range. Interpretation of the question: very good Relevance of the answer to the question: very good Substantive knowledge: good Use of authorities: good Articulation of argument: good Accuracy of information: good Clarity of expression: satisfactory Legibility: good Question 8 The EU has become increasingly worried about the question of stem cell research. All Member States legal regimes are in fact startlingly different. For instance, whilst Germany bans any kind of research, the UK allows it within certain limits. In order to eliminate these differences, the EU decided to adopt a directive. Directive 234/2015 (fictitious) provides that free movement of stem cells should be guaranteed and at the same time, it requires Member States to set standards of quality and safety for the donation, procurement, testing, processing, preservation, storage and distribution of human tissues and cells. Once these standards are satisfied, no restriction on imports and exports of cells should be imposed. The legal basis of the Directive is Article 95 of the Treaty on the Functioning of the European Union (TFEU). Germany – outvoted in the Council of Ministers – decided to bring an action challenging the Directive validity, arguing a breach of the EU competence and a violation of fundamental human rights. You are the Advocate General of the case. Please submit your Opinion to the Court. General remarks This is a question on Article 114(1) TFEU and the extent of EU competence. Examiners’ reports 2015 9 Law cases, reports and other references the examiners would expect you to use Tobacco cases of 2001 and 2006. Common errors Not identifying the correct legal basis. Discussing free movement of goods. A good answer to this question would… discuss Article 114(1) of the TFEU. In particular, the legal meaning of ‘measures adopted as to improve and strengthen the internal market’. You should refer to the first and second Tobacco Advertising litigation cases and in particular to the notion of centre of gravity of the measure and the proportionality of the measures adopted. In the context of the question, a reference to the sensitive nature of the topic could be relevant. It could be argued that the measure could be contrary to the rights provided by the EU Charter.