Today Estonia, the Czech Republic, Lithuania, Hungary, Latvia, Malta, Poland, Slovakia and Slovenia become part of the Schengen area. This means that controls at internal land and sea borders between these countries and the current 15 member states are lifted. See this press release or view the press video above.
I have made some changes to the sidebar. Next to some new icons, it now includes:a module with the latest news on the European Court of Justice (via google news)a module with the latest press releases from the Court (just those on the cases) a module with a newsletter subscription service.
The latter module has been there for some time now and has proven to be quite successful; I have already received many subscriptions. Unfortunately, I use an automated service for this (FeedBlitz), which, a few weeks after I had signed up, decided to add small advertisements to the newsletters. Please accept my apologies for this.
Commission cannot start Article 226 EC action on the basis of a mere presumption
The Commission claimed the arrangements under which emergency ambulance services were provided by the Dublin City Council by agreement with the Eastern Regional Health Authority without there having been any prior advertising constituted a breach of Articles 43 EC and 49 EC and of the general principles of Community law (notably those of transparency and equality or non-discrimination).
The Commission was of the view that the award should have been advertised in accordance with Directive 92/50.
The Court however held that it was apparent from the form of order sought that the present action did not concern the application of Directive 92/50, but concerned the question whether there was an infringement Articles 43 EC and 49 EC.
The Court held that, without prejudice to the obligation of the Member States, under Article 10 EC, to facilitate the achievement of the Commission’s tasks, which consisted in particular, pursuant to Article 211 EC, in ensuring that the provisions of the Treaty and the measures taken by the institutions pursuant thereto were applied (see e.g. Case C‑494/01 Commission v Ireland) in an action for failure to fulfil obligations it was incumbent upon the Commission to prove the allegation that the obligation had not been fulfilled.
It was the Commission’s responsibility to place before the Court the information needed to enable the Court to establish that the obligation has not been fulfilled, and in so doing the Commission may not rely on any presumption. (see e.g. Case C‑404/00 Commission v Spain [2003], paragraph 26; and Case C‑135/05 Commission v Italy [2007]).
The Court held that the national legislation empowered both the Authority and the Dublin City Council to carry out emergency ambulance services.
Between 1899 and 1960, the Dublin City Council provided emergency ambulance services in its capacity as a health authority. It subsequently acted in its capacity as a local authority and, under the national legislation concerned, provided those services through its permanent fire brigade service.
Consequently, it had not been demonstrated that there had been an award of a public contract, since it was conceivable that DCC provided emergency ambulance services in the exercise of its own powers derived directly from statute.
The mere fact that, as between two public bodies, funding arrangements existed in respect of such services did not imply that the provision of the services concerned constituted an award of a public contract.
Text of Judgment
Court applies legal basis case established in Titanium Dioxide to Schengen acquis.
In this case, the United Kingdom claimed that the Court should annul Council Regulation 2007/2004 of 26 October 2004, which established the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (the Border Agency Regulation).
The United Kingdom principally held that it was denied the right to take part in the adoption of the Regulation, despite having given notice of its wish to do so pursuant to Article 5(1) of the Schengen Protocol and to Article 3(1) of the Protocol on the position of the United Kingdom and Ireland.
It therefore claimed that the Border Agency Regulation should be annulled on the grounds that the exclusion of the United Kingdom from its adoption entailed the infringement of an essential procedural requirement and/or the infringement of the Treaty, within the meaning of Article 230(2) EC. 
The UK government also argued that the Council was wrong to classify Regulation 2007/2004 as a measure developing provisions of the Schengen acquis.
The Court examined whether the second subparagraph of Article 5(1) of the Schengen Protocol must be interpreted as applicable only to proposals and initiatives to build upon an area of the Schengen acquis in which the United Kingdom and/or Ireland had been allowed to take part pursuant to Article 4 of that protocol, or whether those two provisions must, on the contrary, as the United Kingdom submitted, be regarded as independent of each other.
The Court found that the second subparagraph of Article 5(1) of the Schengen Proposal must be understood as applicable only to proposals and initiatives to build upon an area of the Schengen acquis which the United Kingdom and/or Ireland have been authorised to take part in pursuant to Article 4 of that protocol.
The Court held that by refusing to allow the United Kingdom the right to take part in the adoption of Regulation 2007/2004, on the ground that that Member State had not first been authorised to take part in the area of cooperation which formed the context of that regulation, the Council did not misinterpret and misapply this provision of the Schengen Protocol.
The Court furthermore held that in a situation such as that at issue in the present case the classification of a Community act as a proposal or initiative to build upon the Schengen acquis within the meaning of the first subparagraph of Article 5(1) of the Schengen Protocol must rest on objective factors which are amenable to judicial review, including in particular the aim and the content of the act (see, by analogy, Case C‑300/89 Commission v Council (‘Titanium dioxide’), paragraph 10; Case C‑176/03, Commission v Council, paragraph 45; and Case C‑440/05, Commission v Council, paragraph 61).
As to the purpose of Regulation 2007/2004, the Court held that it was intended to improve the integrated management of external borders and to facilitate and render more effective the application of the common rules on standards and procedures for the control of those borders.
Furthermore, as to the content of Regulation 2007/2004, the Agency set up by that regulation has the task in particular of coordinating operational cooperation between Member States in the field of management of external borders, assisting Member States in the training of national border guards, and providing Member States, where circumstances required, with increased technical and operational assistance at external borders
The Court therefore concluded that checks on persons at the external borders of the Member States and consequently the effective implementation of the common rules on standards and procedures for those checks must be regarded as constituting elements of the Schengen acquis.
Therefore, the Council was right to classify Regulation 2007/2004 as a measure developing the provisions of the Schengen acquis.
Text of Judgment
See also the judgment in the related case C-137/05, United Kingdom v Council
Lisbon Treaty
Europe's leaders this morning signed the Lisbon Treaty, as it is now called. Except for Prime Minister Brown, who was delayed and apparently attended a special "one-nation ceremony" at 2pm to put his name under the Treaty as well. The final text is available here. The Commission has welcomed the signature of the Treaty.
Charter of Fundamental Rights
Seven years after it was first signed and proclaimed, the Presidents of the European Parliament, the Council and the Commission met in Strasbourg yesterday to again “solemny proclaim” and sign the Charter (see this press release). They signed the version of the Charter as was incorporated in the Constitution. Or, to be more precise, the Reform Treaty will modify the Charter to resemble the version of the Charter that was integrated in the Constitutional Treaty. See this link.
New Judge at the ECJ
Mr Jean-Jacques Kasel has been appointed as new Judge of the ECJ following the resignation of Mr Romain Schintgen. See this decision (pdf).
Community not liable for PhD candidate not finishing his thesis in time
This was a lengthy case. In short, the Court held that the refusal of the ECB to grant a Greek Phd candidate access to (documents concerning the) Basle/Nyborg Agreement infringed the duty to state reasons.
The Court held that the obligation to give reasons meant that the ECB should have responded to that request for access by stating the reasons why the arguments put forward by the applicant were not such as to enable the ECB to go back on its initial position that the documents at issue were confidential.
The Court found that in the decision of the ECB, the Governing Council did not gave any reason capable of refuting the applicant’s arguments
However, the most remarkable part of this case was the last part, concerning the non-contractual liability of the Community. The applicant argued that the refusal of the Council and ECB to grant him access had disrupted his timetable for writing his thesis.
The applicant submitted that this was still preventing him – three years and four months after the expiry of the deadline set for handing in his thesis (March 31, 2001) – from finishing it and submitting it to the Thessaloniki Faculty of Law.
He argued that had suffered material damage in the form of loss of revenue which he would have received by reasonably and appropriately using the doctorate which he would have obtained, in this case by securing a legal position within an international institution or body such as the ECB or the IMF.
The applicant claimed, second, that the delay of approximately three and a half years in finishing his thesis caused him “very serious non‑material damage consisting in:
– a significant prolongation of his anxieties concerning the completion of his thesis;
– the delay to his career and financial advancement;
– the impossibility of applying for job opportunities in Greece and, in particular, abroad, for which a doctorate was necessary;
– the postponement of a career in an academic environment which required a doctorate, the resulting uncertainty and the worsening of his situation, in view also of his age;
– the need to update his thesis repeatedly as a result of constant developments in the EMU and the resulting loss of time and fatigue;
– the psychological pressure suffered to this day concerning the completion of his thesis, the negative and ironic comments made about him and which continued to be made, and the obligation to have to give an explanation every time he was asked when his thesis would be completed;
– the loss of time and energy brought about by the proceedings before the Court of First Instance and the Court of Justice;
– the psychological strain caused by the length of the proceedings, the outcome of which was fundamental for his future.”
He argued that, in those circumstances, he should be awarded the sum of EUR 90 000 by way of compensation for the non‑material damage which he had suffered.
The Court of First Instance simply summed up the well known criteria for non-contractual liability (the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between that conduct and the damage complained of).
The Court held that it was apparent from the applicant’s written submissions that the alleged loss of opportunity and potential earnings were themselves the consequence of an initial event, namely the failure to complete the thesis before the submission date and the subsequent failure to qualify for a doctorate in law.
That initial event could not be considered to be the direct cause of the alleged loss of opportunity or loss of potential earnings, in so far as the applicant did not establish that possession of a doctorate was a necessary precondition for obtaining a position with one of the bodies to which he referred.
Nor did the failure to complete and submitted the thesis before the deadline of March 31, 2001 appeared to be the direct consequence of the contested decisions refusing access.
Moreover, if loss of opportunity was capable of constituting reparable damage that damage must none the less be actual and certain if compensation was to be possible.
The Court held that the applicant had not established that the opportunity of which he was deprived, namely of gaining a position within the ECB or another body and of benefiting from the related financial advantages, was actual and certain in the sense that he would otherwise had had every chance of obtaining such a position, or at least a serious chance of doing so.
The Court concluded that the conditions which must be met in order for extra‑contractual liability to be incurred, concerning the existence of actual and certain damage and a direct causal link between that damage and the allegedly unlawful conduct of the defendants, were not in fact met and that the action for damages brought by the applicant must therefore be dismissed.
Text of Judgment
For more information on the Basle/Nyborg Agreement, see this document (in pdf).
This judgment is largely similar to that in C-404/05, Commission v. Germany, also delivered November 29, 2007. These cases had a shared Opinion of Advocate General Sharpston.
Case C-393/05 concerned an Austrian requirement that every private inspection body in the field of organic production of agricultural products having a registered office in and approved in another Member State that it must also maintain a registered office or place of business in Austria in order to be allowed to carry out business activities in Austria (the German case involved a similar requirement).
The Commission sought a declaration from the Court of Justice that this requirement was contrary to Art. 49 EC.
Austria inter alia alleged that the exercise of official authority, within the meaning of Art. 55 EC, justified a restriction on the freedom to provide services.
The Court reiterated that all measures which prohibited, impeded or rendered less attractive the exercise of the freedom to provide services must be regarded as restrictions of that freedom (see C-452/04, Fidium Finanz).
It found that the Austrian requirement ran directly contrary to the freedom to provide services, since it rendered impossible, in Austria, the provision of the services in question by private bodies established only in other Member States (see C-355/98, Commission v Belgium).
The Court furthermore held that, since it provided for a derogation from the fundamental rule of freedom to provide services, Art. 55 EC, read in conjunction with Art. 45(1) EC, must be interpreted in a manner which limited its scope to what was strictly necessary to safeguard the interests which it allowed the Member States to protect.
Derogation under those Articles must be restricted to activities which, in themselves, were directly and specifically connected with the exercise of official authority which excluded from being regarded as connected with the exercise of official authority, within the meaning of that derogation, functions that were merely auxiliary and preparatory vis-à-vis an entity which effectively exercised official authority by taking the final decision. (see e.g. C-451/03, Servizi Ausiliari Dottori Commercialisti and C-42/92, Thijssen).
The auxiliary and preparatory role devolved on the private bodies could not be regarded as being directly and specifically connected with the exercise of official authority, within the meaning of Art. 55 EC, read in conjunction with Art. 45(1) EC.
Text of Judgment
By classifying as a medicinal product a garlic preparation in capsule form, Germany infringed Art. 28 and Art. 30 EC. The capsule from did not satisfy the definition of a medicinal product within the meaning of Art. 1(2) of Directive 2001/83.
The Commission sought a declaration from the Court that, by classifying a garlic preparation in capsule form, which did not fall under the definition of a medicinal product by virtue of its designation, as a medicinal product, Germany had failed to fulfil its obligations under Articles 28 and 30 EC.
The Court held if a product produced industrially came within the definition of medicinal product in Art. 1(2) of Directive 2001/83, the obligation on the importer of that product to obtain a marketing authorisation in accordance with that directive prior to marketing it in the Member State of importation could not in any event constitute a restriction on trade between Member States prohibited by Art. 28 EC. 
The fact that a product was classified as a foodstuff in another Member State could not prevent it from being classified as a medicinal product in the Member State of importation, if it displayed the characteristics of such a product.
A product which satisfied the definition of “medicinal product” within the meaning of Directive 2001/83 must be held to be a medicinal product and be made subject to the corresponding rules even if it came within the scope of other, less stringent Community rules (see C-219/91, Ter Voort).
The Court reiterated Art. 1(2)(1) of Directive 2001/83 gave two definitions of medicinal product, one “by presentation” and one “by function’. A product was a medicinal product if it fell within either of those definitions (see Joined Cases C and-211/03, C-299/03 and C-316/03 to C-318/03 HLH Warenvertrieb and Orthica).
The first definition was to be interpreted broadly, covering not only medicinal products having a genuine therapeutic or medical effect, but also those which were not sufficiently effective or did not have the effect which consumers would be entitled to expect from the way in which they were presented.
With regards to the second definition, the Court that the national authorities, acting under the supervision of the courts, must decide on a case-by-case basis, taking account of all the characteristics of the product, in particular its composition, its pharmacological properties to the extent to which they could be established in the present state of scientific knowledge, the manner in which it was used , the extent of its distribution, its familiarity to consumers and the risks which its used might entail.
The Court concluded that the capsule form could not be classified as a medicinal product either by presentation or function.
Germany's decision to classify the capsule form as a medicinal product created an obstacle to intra-Community trade in so far as the products concerned, legally marketed in other Member State as a foodstuff, could be marketed in Germany only after having been subjected to the authorisation procedure for the placing on the market of a medicinal product.
With regard to a possible justification under Art. 30 EC, the Court held that it was for the Member States, in the absence of harmonisation and to the extent that uncertainties continued to existed in the current state of scientific research, to decide on their intended level of protection of human health and life and on whether to require prior authorisation for the marketing of foodstuffs, always taking into account the requirements of the free movement of goods within the Community.
However, the Court reiterated that in exercising their discretion relating to the protection of public health, the Member States must comply with the principle of proportionality. Germany had failed to prove that the legislation at issue was necessary in order to protect consumer health and that it went no further than was necessary in order to achieve that aim. The decision did not therefore satisfy the principle of proportionality.
Text of Judgment
CFI annuls decision of Commission not to grant access to the minutes of a meeting between representatives of the Commission, the UK government and breweries.
Following an legislative amendment in the United Kingdom, breweries were required to allow public houses bound to them by exclusive purchasing agreements to offer a "guest" beer from a different brewery.
The requirements imposed on those beers implied that the beer sold by Bavarian Lager as well as most beers produced outside the United Kingdom could not be covered by this provision.
However, an Art. 226 procedure against the United Kingdom in this regard was suspended and brought to a close after a meeting on this matter, which took place on October 11, 1996, between representatives of the Commission, the UK government and breweries.
Bavarian Lager inter alia claimed that the Court should annul a Decision of the Commission to refuse the minutes of this meeting as well order the Commission to produce the full set of names of persons attending the meeting.
The Court held that access to documents containing personal data fell under Regulation 1049/2001, according to which, in principle, all documents of the institutions should be accessible to the public.
In assessing the need for an exception, the institutions should take account of the principles in Community legislation concerning the protection of personal data in all areas of activity of the Union, thus including principles laid down in Regulation 45/2001.
The right of access to documents of the institutions recognised to citizens of the European Union and to any natural or legal person residing in or having its registered office in a Member State, laid down by Art. 2 of Regulation 1049/2001, constituted a legal obligation for the purposes of Art. 5(b) of Regulation 45/2001.
Therefore, if Regulation 1049/2001 required the communication of data, which constituted “processing” within the meaning of Art. 2(b) of Regulation 45/2001, Art. 5 of that same regulation made such communication lawful in that respect.
The Court therefore inter alia examined whether disclosure of the documents requested would infringe Art. 8 ECHR. Referring to case law of the ECHR – such as Peck v United Kingdom - the Court held that there was no reason in principle to exclude professional or business activities from the concept of “private life”.
The Court held that, in order to determine whether there had been a breach of Art. 8 of the ECHR, it needed to be determined, first, whether there had been an interference in the private life of the person concerned and, secondly, if so, whether that interference was justified.
In order to be justified, it must be in accordance with the law, pursue a legitimate aim and be necessary in a democratic society.
In order to determine whether a disclosure was “necessary in a democratic society”, it needed to be examined whether the grounds relied on in justification were “relevant and sufficient”, and whether the measures adopted were proportionate to the legitimate aims pursued.
The competent authorities had to be granted a certain discretion in order to establish a fair balance between competing public and private interests.
That margin of discretion was, however, accompanied by judicial review, and its breadth was to be determined by reference to factors such as the nature and importance of the interests at stake and the seriousness of the interference.
The Court held that any decision taken pursuant to Regulation 1049/2001 must comply with Art. 8 of the ECHR, in accordance with Art. 6(2) EU. Exceptions to the principle of access to documents must be interpreted restrictively.
The Court held that the disclosure of the names in question did not lead to an interference with the private life of the persons who participated in the meeting and would not undermine the protection of their private life and the integrity of their person.
The Commission was therefore wrong in its view that the exception under Art. 4(1)(b) of Regulation 1049/2001 had to be applied in this case.
The Court concluded that the Commission erred in law by holding, in the contested decision, that the applicant had not established either an express and legitimate purpose or any needed to obtain the names of the five persons who participated in the meeting and who, after that meeting, objected to communication of their identity to the applicant.
Certain provisions of Dutch law on taxation of dividends infringing Art. 56 EC
Dutch legislation on the taxation of dividends (Wet DB) provided for a withholding tax on dividends distributed by a company established in that Member State to a company established in another Member State, where the minimum threshold for the parent company’s shareholdings in the share capital of the subsidiary set out in Art. 5(1) of Directive 90/435 was not reached.
However, the legislation exempted from that tax the dividends paid to a company liable to corporation tax in the Netherlands or which had a permanent establishment in the Netherlands which owned shared in the company paying the dividends.
The referring Court first of all asked whether the national legislation concerned was compatible with Articles 56 to 58 EC. Secondly, it asked to what extent the existence of a full tax credit, granted by the Member State of residence of the recipient company to which the exemption under Art. 4 of the Wet DB did not apply, might influence the answer to the first question.
The Court reiterated that in the absence of any unifying or harmonising Community measures, Member States retained the power to define, by treaty or unilaterally, the criteria for allocating their powers of taxation, particularly with a view to eliminating double taxation.
However, Member States must none the less exercise that competence consistently with Community law. (see e.g. C-446/03, Marks & Spencer and C-196/04, Cadbury Schweppes).
The Court held that the situation in the main proceedings did not fall within the scope of Directive 90/435. It was therefore for the Member States to determine whether, and to what extent, economic double taxation of distributed profits was to be avoided and, for that purpose, to establish, either unilaterally or through double taxation conventions concluded with other Member States, procedures intended to prevent or mitigate such economic double taxation.
However, this did not of itself mean that the Member States were entitled to impose measures that contravened the freedoms of movement guaranteed by the EC Treaty. (see e.g. C-374/04, Test Claimants in Class IV of the ACT Group Litigation).
The Court held that the national legislation infringed Art. 56 EC, as it introduced a difference of treatment between, on the one hand, companies receiving dividends with their seat in the Netherlands or having a permanent establishment there which held shares in the distributing company and, on the other, companies receiving dividends which were not established in the Netherlands
Although, as the Court had held before, the need to maintain the cohesion of a tax system could justify a restriction on the exercise of the fundamental freedoms guaranteed by the Treaty. However, for an argument based on such a justification to succeed, a direct link must be established between the tax advantage concerned and the offsetting of that advantage by a particular tax levy. No such link existed in the present case. (see e.g. C-319/02, Manninen and C-9/02, Lasteyrie du Saillant).
Text of Judgment
