Last Week In Luxembourg

For some reason, it was necessary for the Grand Chamber to reaffirm the 2009  Sturgeon judgment. (Both Sturgeon and this week’s judgment are by Judge Malenovský.) Three hours delay is still the cutoff, and airlines can still get out of the obligation to pay compensation only in extraordinary circumstances. Joined Cases Nelson v. Lufthansa and R. (on the application of TUI Travel et al.) v. Civil Aviation Authority Cf. EurActiv and Recent Developments in European Consumer Law Blog

The Grand Chamber (Judge Arabadijev) also did some more Portuguese car insurance law, holding that Directives 72/166, 84/5 and 90/232 “do not preclude national provisions which, where two motor vehicles collide giving rise to personal injury to the passenger in one of the vehicles and the event is not attributable to the fault of the drivers of those vehicles, [but to the fact that the passenger wasn’t wearing his seat belt] allows the civil liability of the insured persons to be limited or excluded.” Almeida v. Carvalheira et al.

The first judgment is in of the infringement proceedings brought against half of Europe regarding the First Railway Package. Predictably, Portugal lost (Judge Borg Barthet). Commission v. Portugal Cf. here for my discussion of the AG’s opinions in these cases.

Following AG Jääskinen’s opinion in April, the Court (Judge Safjan) finally sorted out what to do with the German “Negative Feststellungsklage”, i.e. the suit that asks the Court to say that no liability in tort exists. Unlike the AG, however, the Court decides that this kind of suit does fall under art. 5(3) of Regulation 44/2001. Folien Fischer and Fofitec v. Ritrama

In the wake of the recent Dutch studiefinanciering case, the Court (Judge Prechal) follows AG Cruz Villalón and holds that a Belgian measure which gives allowances for young persons seeking their first job only to persons who have spent the last six years in Belgium should be considered in violation of the free movement of workers. Prete v. Office national de l’emploi

France did not transpose Directive 2003/96 on the taxation of electricity in time, leaving in place the possibility for municipalities or departments to set a tax higher than the minimum established by law, rather than enacting a uniform tariff for the entire country. Commission v. France (FR)

AG Jääskinen proposes some clarifications of the Authorisation Directive – Directive 2002/20 – in the context of a dispute between the Belgian mobile telecom operators and the Belgian government. I leave it as an exercise for the reader to sort out which side benefits from the interpretation he proposes. Belgacom et al. v. Belgium

AG Mengozzi does some car insurance law in Csonka et al. v. Állam (NL, DE, FR), where he proposes a reading of the law that the Hungarian government will like: the Member State does not have to stand in for an insolvent insurance company. At the same time, the AG emphasized that you can’t use a prejudicial question procedure to get the ECJ to decide whether the national law infringes EU law.

AG Cruz Villalón also takes a look at Hungarian car insurance, albeit in the context of competition law. First of all, in par. 20-48, he proposes a narrow reading of the case law on the admissibility of purely internal questions where they rely on concepts derived from EU law, as it was applied only last week by the Court in Punch Graphix (par. 27). Alternatively, the AG proposes that the contracts in question unlawfully reduce competition in the car repairs market, but not the insurance market. Allianz Hungária et al. v. Gazdasági Versenyhivatal (NL, DE, FR)

The General Court annulled the asset freezes of two companies accused of being involved in Iran’s nuclear proliferation programme for failure to state (adequate) reasons. CF Sharp Shipping v. Council and Oil Turbo Compressor Co. v. Council (NL, DE, FR)

Finally, I came across an interesting recent journal article this week about free movement of goods law by Gareth Davies. The fun isn’t in the substantive law he discusses, but in the approach he takes to distilling meaning out of a body of case law. (Cf. p. 25-27, in particular.) Other reading tips include this blog post by Deirdre Curtin about the future of Kadi-litigation and this summary of a high-level conference in Luxembourg about the future of ECJ-ECtHR collaboration. (Key quote: “speakers like Hans Nilsson from the Council of the EU do not expect the accession to enter into force until the end of the decade.”)

Subsidiarity: Right of Access to an Attorney

Virtually all Europeans imagine their right to an attorney to be more or less the way they see it in American cop shows on TV. In reality, however, the law in most European countries is not quite so generous. Even under the 2008 ECtHR ruling of Salduz v. Turkey, the right to have an attorney present during questioning by the police is not guaranteed in all circumstances, nor do European countries necessarily think that is a bad thing. More than their American counterparts, European authorities tend to balance the right to an attorney against the interest of the state in discovering what happened.

My intention here is not to discuss the Salduz case and its implications. Plenty of people have done that already. Instead, I want to look at the Commission's proposal for a Directive harmonising this area of the law, which is currently making its way through the EU legislature. (Cf. also this Dutch-language blog post about the attempt by the Netherlands to restrict the right to serious felonies only.) Given my oft-expressed concerns about subsidiarity, it is no surprise that I wonder why it is necessary to harmonise an area of the law that is already harmonised through ECtHR case law. After all, all EU Member States are parties to the European Convention on Human Rights, so what is the added value of this directive? 

The Commission's answer is brief enough that I can quote it here in full:

34. The objective of the proposal cannot be sufficiently achieved by Member States alone, since there is still significant variation in the precise method and timing of the right of access to a lawyer in criminal proceedings across the European Union. As the aim of the proposal is to promote mutual trust, only action taken by the European Union will establish consistent common minimum standards that apply throughout the whole of the European Union. The proposal will approximate Member States’ procedural rules regarding the time and manner of access to a lawyer for suspects and accused persons and for persons subject to an EAW, the aim being to enhance mutual trust. The proposal therefore complies with the subsidiarity principle.

I have to say, this is actually pretty convincing. During my weekly surveys of ECJ case law I frequently come across cases where the referring judge is trying to push against the limits of the grounds for non-execution of the warrant of art. 3 and 4 of the Framework Decision, on the grounds that they were informed of some circumstance of the procedure in the requesting state that they do not like, for example that the warrant was issued by a prosecutor instead of by a judge, that there might be a ne bis in idem issue, or that the original trial was in absentia. Another recent example of the referring court going for broke is the Romanian case of Rusa, where the applicant really did not want to be sent back to Germany.

So if we agree - as I do - that the European Arrest Warrant is justified under the principle of subsidiarity, it is plausible that the level of trust necessary to sustain that legislation cannot be achieved through Strasbourg alone. That is particularly true to the extent that the Member States of the European Union decide that they want to offer a level of protection that significantly exceeds the level required by the ECtHR. That, as it turns out, is what they are currently trying to figure out. However, while a lower level of protection would undermine the case for this Directive, it is in any event true that its enactment would add one hell of a set of teeth to the enforcement mechanism on offer under the ECHR. That alone makes it a law worth contemplating.

How to get rid of Dalli

Now that Commissioner Dalli suddenly appears to have un-resigned, the question is what to do. As far as I can see, under the Treaties there are two ways to get rid of a Commssioner. On the one hand, there is the approach that President Barroso has taken so far, which is codified in art. 17(6) TEU:

A member of the Commission shall resign if the President so requests.

Contrary to what one might think, this does not seem to be optional. "Shall" usually indicates a positive obligation in European law, meaning that the resignation of a Commissioner is only a formality once the President of the Commission has asked for it pursuant to art. 17(6) TEU. The second approach is a forced resignation under art. 247 TFEU:

If any Member of the Commission no longer fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct, the Court of Justice may, on application by the Council acting by a simple majority or the Commission, compulsorily retire him.

This begs the question: if resignation is mandatory once requested under art. 17(6) TEU, what is the point of art. 247 TFEU? (Other than to allow the Council to bypass the President of the Commission and have a Commissioner sacked directly, which does not seem like a very likely scenario, given the usual balance of powers between the Council and the President of the Commission.)

I think the explanation for this seeming redundancy is in the history of the Treaties. On the one hand, we have art. 247 TFEU, which already appears in identical form as art. 12(2) of the Treaty of Paris, which established the European Coal and Steel Community. Clearly, this was traditionally the way to get rid of Commissioners like Mr. Dalli. On the other hand, as the number of Commissioners grew, a more Presidential system started to emerge, where in successive Treaty amendments the position of the President of the College was strengthened relative to his colleagues. Thus, as of the Treaty of Maastricht the President is selected first, and then consulted on the selection of his colleagues. The Treaty of Amsterdam introduces the proposition that "The Commission shall work under the political guidance of its President." (art. 219 EC) And finally the current rule of art. 17(6) TEU was introduced in the Treaty of Nice, as art. 217(4) EC.

In this way, the old rule has become ever less important, and there is a decent chance that it was only maintained unamended because no one thought to get rid of it. However, the current crisis does show a potential use for the provision. As it happens, Mr. Dalli seems to accept that if President Barroso formally asks for his resignation, that he is required to give it, regardless of whether the President has a good reason for asking. In this case, for example, it is highly doubtful that it can be proven that Mr. Dalli is "guilty of serious misconduct", although the Commission might be able to persuade the Court that Mr. Dalli "no longer fulfils the conditions required for the performance of his duties" on the grounds that his reputation is too tarnished for him to function. But what if Mr. Dalli refused to go? Of course, the President could bar him from the building, but it would be nice if there were a more formal way of resolving the dispute. In this cases where it is able, the Commission should want to have the opportunity of proving in open court that its black sheep really should go. Deleting art. 247 TFEU would remove the possibility of removing, once and for all, all doubt about whether the President of the Commission was right to ask a Commissioner to go. For this reason, I would certainly suggest that it should be maintained, although possibly in amended form.

In the case of Mr. Dalli, however, his letter to President Barroso suggests that all of this can be solved by having President Barroso send him a letter formally invoking art. 17(6) TEU. I am not sure why Mr. Dalli thinks that the President has to ask for his resignation in writing, or why he thinks he is entitled to "defend himself" or "to consult with [his] lawyer", but he seems to be prepared to resign if and when he is formally asked. So let's just ask him again and get it over with.

UPDATE OCT 24: Apparently President Barroso is also wondering what Mr. Dalli is talking about. In a letter published today, he writes: "Under the Treaty, no written form is required for a declaration of resignation, and it is irrevocable. As a consequence, no further question arises about the effectiveness of your resignation."

This Week in Luxembourg

This week the Grand Chamber (Judge Tizzano) ruled in Hungary v. Slovakia, siding with the latter. Slovakia was entitled to forbid the President of Hungary from entering its territory. This seems like one of those highly contested judgments, because there are a few steps of the argument missing. The Court cites Kadi for the proposition that international law is part of the European legal order (!), and explains that under international law Slovakia is allowed to keep him out, but skips over the question of why that rule is not superseded by art. 21 TFEU. Also odd: The Commission intervened in support of Slovakia. Cf. Verfassungsblog and European Law Blog

The Grand Chamber (via the brand new Vice-President of the Court Judge Lenaerts) also held that the Austrian Datenschutzkommission is insufficiently independent from the Federal Chancellor in violation of Article 28(1) of Directive 95/46.

In the base closures case of United States v. Nolan, the Court (Judge Juhász) deviated from AG Mengozzi’s opinion and declared the prejudicial question inadmissible. The Directive in question, Directive 98/59, explicitly excludes from its scope “workers employed by public administrative bodies” so there is no issue of EU law here. I suppose that that is a substantive answer disguised as a procedural one. Note that there are some interesting considerations at the end regarding when the Court might nonetheless be prepared to answer a question like this one. (par. 46-56) An example of that happening is in the Belgian case of Punch Graphix v. Belgium, where Belgian law referred to EU law even where the latter didn’t technically govern.

In the UK, it turns out, it rains a lot, which gives the UK problems in a few places to comply perfectly with art. 3, 4, and 10 of Directive 91/271. So the question is whether that Directive leaves room for the occasional water overflow. The Court (Judge Borg Barthet) now held that the extent of overflow at the two facilities at issue in Commission v. UK can hardly be considered to be limited to “unusual” situations, meaning that the UK has failed to fulfill its obligations.

In tendering law, the Court (Judge Šváby) disappointed a Hungarian and a German company who were hoping to get around the requirement in the tendering document of three consecutive years without a loss by referring to the differences in accounting rules across Member State, or to their relationship with their respective parents. As long as the criterion is reasonably justified in light of the requirements of the project, the companies are out of luck. Cf. art. 44 and 47 of Directive 2004/18. Édukövízig and Hochtief v. Közbeszerzések Tanácsa Közbeszerzési Döntőbizottság

The attempt by the Dutch authorities to put “formally limited residence permits” – in this case limited to the exercise of the duties of a spiritual advisor – under the exception for au pairs and seasonal workers of art. 3(2)(e) of Directive 2003/109 will almost certainly not fly. The Court (Judge Silva de Lapuerta) left room for the possibility that the limitation might prevent, as a practical matter, long-term residence, but that does not seem to be the case here. Staatssecretaris van Justitie v. Singh

The Court (Judge Lenaerts) followed AG Cruz Villalón and defended the protection of databases under art. 7 of Directive 96/9. Football Dataco et al. v. Sportradar

You still can’t give away fake prizes as a marketing tool. Purely Creative et al. v. Office of Fair Trading Cf. Recent Developments in European Consumer Law Blog and, more critically, the European Law Blog

CE Markings may not be made mandatory, because that would be a Measure Having Equivalent Effect. Elenca v. Ministero dell’Interno Cf. The IPKat

The Czech Republic unlawfully allowed butter spread to be sold as butter. Commission v. Czech Republic

AG Jääskinen’s opinion in Ettwein v. Finanzamt Konstanz suggests that, yet again, the Swiss – or in this case Swiss residents – should bear the negative consequences of the fact that Switzerland is not in the EU. In this case the dispute concerns the direct taxation of self-employed frontier workers.

In the EAW case of Ministerul Public - Parchetul de pe lângă Curtea de Apel Constanţa v. Radu, the robbery suspect in question is throwing a lot of serious sounding legal arguments against the wall to see if they stick. AG Sharpston gives them exactly as much attention as they deserve, which is to say: not much. The most interesting answer is that a Member State may not refuse to execute a European Arrest Warrant on the grounds that the requesting state has not, or not correctly, transposed the EAW Framework Decision.

AG Kokott dealt with the question of what it means for an Aarhus-Convention procedure to be “prohibitively expensive” (cf. art. 3(7) of Directive 2005/35) and, more importantly at which stages of the procedure this should be verified and by whom how. R. (on the application of Edwards) v. Environment Agency and Others Cf. UK Human Rights Blog part 1 and part 2.

La Poste

This has to be some kind of conspiracy: No sooner had I advocated for the greater use of EPICs than the CJEU declared them unlawful. On September 20, the 6th Chamber of the General Court, with Judge Wahl acting as rapporteur, upheld the Commission's State Aid Decision again France over La Poste, the French Postal Services.

So where did it go wrong?

Well, maybe the problem is already here:

(155) The Commission concludes that:
— unlike the creditors of undertakings governed by commercial law, creditors of La Poste (which is not subject to the ordinary law rules governing the compulsory administration and winding up of firms in difficulty) are not in danger of seeing their claim cancelled in whole or in part following court liqui­dation proceedings;
— the fact that La Poste has legal personality is no bar to a state guarantee to La Poste; and
— in the absence of any express limitation on the State’s liability in respect of La Poste, La Poste’s creditors may legitimately act on the principle that the State will bear the debts of La Poste, even though La Poste possesses legal personality

Then again, it is hard to argue against these findings of fact.

The better view is probably that the problem is here:

(308) Lastly, the unlimited state guarantee in favour of La Poste cannot be considered to be compatible on the basis of Article 106(2) TFEU. This exemption provides that undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly are to be subject to the rules contained in the Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.

(309) French law has imposed public service obligations on La Poste. On that basis, the postal operator may receive financial compensation or enjoy certain prerogatives derogating from certain generally applicable rules of law. However, such financial measures or prerogatives must be limited to what is necessary to offset the addi­tional costs incurred by La Poste by virtue of its public service obligations.

(310) The Community framework for State aid in the form of public service compensation sets out the conditions under which the Commission considers such compen­sation to be compatible under Article 106(2) TFEU. In particular, the compensation paid cannot exceed the cost of providing the public service, taking into account the relevant receipts and a reasonable profit for discharging the obligations.

(311) In the present case, such an analysis would presuppose a market valuation of the unlimited state guarantee in favour of La Poste in order to verify that its value does not exceed the net cost of providing the universal postal service. However, this analysis is impossible to carry out, which rules out application of the exemption provided for in Article 106(2) TFEU.

Let me see if I got this: The Commission spends a great deal of time talking about the interest rate advantage La Poste supposedly obtains because of this state guarantee, including a detailed discussion of the various ratings agencies' methodologies (par. 263 - 274, in particular), but they think it is too much trouble to estimate the Euro value of this advantage in annual interest expense terms? If so, how can we know whether this advantage is even big enough not to be de minimis? Much as I agree that there is an advantage, I am far from convinced that the transformation of La Poste from an EPIC to a private-law SA has made a difference of more than a few basis points. At the very least, such a difference seems like the kind of thing the Commission would have to prove. And I don't see why this calculation should be so "impossible" to carry out, at least not once the Commission, in its infinite wisdom, has estimated the number of basis points that La Poste would pay extra if it were a private law company. (Not a private company, mind. Either way it will be state-owned.)

The non-banking part of La Poste had a total debt at the end of 2011 of € 4,5 bn, so each basis point of additional interest expense corresponds to an additional interest expenditure of € 450.000. If the Commission cannot say how many basis points, approximately, we are talking about, they have no business bringing this case. And if they can put a number on it, it should be fairly easy to compare this number to the value of the Public Service Obligation imposed on the company. (As it happens, the net financing costs of the company are up 4,3%, from € 166 million in 2010 to € 173 million in 2011, while total debt is down from € 4,8 bn to € 4,5 bn, implying an increase in average borrowing costs of 39 bp. But that could be for a variety of reasons.)

The French government does not seem to have taken this particular approach, either in its communications with the Commission or in its arguments before the Court. Instead, it argued mostly about the existence of a guarantee and the existence of an advantage in general, without pressing particulars. The General Court, predictably, replied that the Commission had adduced sufficient evidence to show an advantage (par. 121-123).

Then there is another question that the French do not seem to have asked. Why did the Commission find it necessary to order France to turn La Poste into a Société Anonyme instead of permitting France to resolve the problem through less drastic means? Why not let France enact an explicit denial of guarantee? The answer is probably that France was already planning to convert La Poste into an SA anyway (cf. par. 318-323 of the Commission's Decision).

For the future, however, this is a possibility worth considering. After all, I am told that it is highly likely that this precedent will be applied to SNCF, the French railways. If so, the French might consider asking the Commission to do their job more carefully.

EU Secrets

As part of her ongoing fight over the EU's agreement with the US over the exchange SWIFT data, MEP Sophie in 't Veld is trying to get her hands on the full version of this Europol inspection report. The problem is that it is classified UE SECRET, which predictably led to Ms. In 't Veld's Access to Documents request being denied. (Cf. art. 9 of Regulation 1049/2001.) One way to solve this problem, the solution she is currently considering, is to appeal the denial of access in the usual way. As far as I know, no one has ever tried to do this for a document classified at level UE SECRET, and even for the next lowest level, UE RESTREINT, such a case has never been won. (Cf. Case C-266/05, Sison v. Council.) So I started thinking about a way to get around this, for example by having Europol produce it under art. 24 Statute.

It is undisputed that the EU  authorities are probably a little too generous with their security levels. (Cf. this EUObserver article, for example.) Let us assume that this Europol document does not really merit an UE SECRET rating. How do we get rid of it? Can this security rating itself be challenged in court?

To start at the beginning, for an action for annulment under the Treaties you need the following:

Art. 263 TFEU:
The Court of Justice of the European Union shall review the legality of (...)  acts of bodies, offices or agencies of the Union intended to produce legal effects vis-à-vis third parties.

I think we can all agree that the first two requirements are met in the case of a decision to classify a document at the level UE SECRET. The question is whether the third condition is. While the level of classification obviously has consequences for the staff of the European institutions and agencies, they do not count as "third parties". So which other possible legal effects are there?

Firstly, there is access to documents law. Unfortunately, there is art. 9(2) of Europol's Access to Documents Decision:

Europol classified documents shall not automatically be subject to refusal of access. Every classified document shall be examined whether any of the exceptions provided for by Article 4 apply. Classified documents can not be disclosed, unless they have been declassified in accordance with Article 10 of the Rules on confidentiality. Access to classified Member State, third party and EU body documents shall be subject to the consultation mechanism referred to in Article 4(4).

Obviously this provision has the effect of making sure that the decision to classify a document does not produce legal effects through access to documents law. (Regulation 1049/2001 does not have this rule, but it does clearly foresee the possibility that classified documents might nonetheless be released, so likewise no dice.)

Given that the EU only rarely does substantive criminal law - cf. art. 83 TFEU - it is unsurprising that the EU has no Official Secrets Act. The Member States do, but those acts don't usually refer to the EU's classification scheme, and even if they did it would probably be insufficient to satsify art. 263 TFEU.

That leaves the overall obligation generated by the classification decision for all "holders" of such information - regardless of whether the are EU staff - to make sure it doesn't get lost. (Cf. art. 4(2) of the Council's Decision on the security rules for protecting EU classified information.) To be sure, that's a little thin, but then again "the Treaty established a complete system of legal remedies" (Les Verts, par. 23), and it is difficult to explain how the EU authorities can have an obligation to declassify information whenever possible without a corresponding means for anyone to sue them if they don't. So I say go for it. If you end up with the right panel, you may well win.

In the case of Ms. In 't Veld, specifically, it should of course be noted that such an action needs to be brought by the Parliament, since an individual MEP probably doesn't have standing under Plaumann. But that is not necessarily a bad thing. Especially when the case is a bit dubious and political, it helps if it is brought by the entire Parliament instead of by an individual MEP.

Triannual Commuting

Given how everybody keeps complaining about the Parliament's monthly trek to Strasbourg, how come no one seems to object to the fact that the Council spends all of April, June and October in Luxembourg? The very same Protocol that establishes the location of the Parliament also gifts the Council with an extra commute:

PROTOCOL (No 6)

ON THE LOCATION OF THE SEATS OF THE INSTITUTIONS AND OF CERTAIN BODIES, OFFICES, AGENCIES AND DEPARTMENTS OF THE EUROPEAN UNION

Sole Article
(a) The European Parliament shall have its seat in Strasbourg where the 12 periods of monthly plenary sessions, including the budget session, shall  be held. The periods of additional plenary sessions shall be held in Brussels. The committees of the European Parliament shall meet in Brussels. The General Secretariat of the European Parliament and its departments shall remain in Luxembourg.
(b) The Council shall have its seat in Brussels. During the months of April, June and October, the Council shall hold its meetings in Luxembourg.

I understand that France is unlikely to give up its right to host the monthly EP Plenary session - although for the next few months it will have to - but how hard can it be to convince Luxembourg to let the Council stay in Brussels all year round?

Of course, it doesn't matter very much for the Ministers themselves. They fly in from their home countries anyway, so for them it's just a matter of telling the pilot to fly somewhere else than usual. Also, the meetings of COREPER and the Working Groups stay in Brussels all year round. (Although I notice that yesterday's PESC and COREPER 2 were in Luxembourg, presumably so that the participants could be there for the Foreign Affairs Council later that day.) But that doesn't mean that these Luxembourg sessions don't cost money. Each Minister will need at least one person from his country's permanent representation in Brussels to come and tell him how to vote. There need to be civil servants from the Council's General Secretariat to make sure the President of the Council knows what he's doing. (We can't let Cyprus, a country without railways, handle the conclusion of the Railway Regulation Recast unsupported now, can we?) Add to that the Commissioner and his/her staff, and that's quite a bit of Brussels - Luxembourg traffic.

Obviously the cost of all of this is going to be a fraction of what the EP's Strasbourg sessions cost, but it still seems like a useful place to start. So I say: Cut the budget, keep the Council in Brussels!

UPDATE: OK, so maybe Luxembourg won't be that easy to persuade. In the litigation before the ECJ about the Parliament's most recent attempt to avoid at least one trip to Strasbourg, they intervened in support of France.

Last Week in Luxembourg

In Finnair v. Lassooy and Rodríguez Cachafeiro and Martínez-Reboredo Varela-Villamor v. Iberia, the Court (per Judge Šváby) followed the opinion of AG Bot and interpreted the compensation provisions of Regulation 261/2004 widely to include cases of “denied boarding” due to a strike of airport staff. Cf. Recent Developments in European Consumer Law Blog

Austria’s reduced fares scheme for students in public transport, which is limited to students whose parents are in receipt of family allowances in Austria, violates free movement law. Commission v. Austria (per Judge Ó Caoimh)

While Bulgaria is allowed to ban tax debtors from leaving the country (cf. Aladzhov), the same does not go for strictly private debts. In this regard, the Court (per Judge Ó Caoimh) seems significantly more certain than AG Mengozzi, who left some room for exceptions. Byankov v. Glaven sekretar na Ministerstvo na vatreshnite raboti

For completeness sake, we should also mention the latest appeal of Evropaïki Dynamiki, who lost on appeal (per Judge von Danwitz) in their attempt to get an even more complete explanation as to why their tender bid was unsuccessful. Evropaïki Dynamiki ­– Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v. Commission Cf. European Law Blog

AG Bot has an opinion on the European Arrest Warrant as applied to in absentia trials. His primary answer simply tracks the 2009 amendment to the EAW Decision, which inserted a new art. 4a which deals expressly with this issue, and the doctrine of primacy. Moreover, the AG argued that this approach is consistent with the right to a fair trial of art. 47 Charter and, more interestingly, with the art. 53 Charter guarantee that the Charter does not detract from the level of protection offered by national Constitutional law and by the ECHR.

In a case that perhaps suggests some shortcomings to the prejudicial question procedure, AG Bot approves of a Spanish scheme to combat money laundering which happens to be focused on Gibraltar, as long as it is justified for overriding reasons in the public interest, is such as to ensure the attainment of its aims and not go beyond that which is necessary to attain those aims, and applies in a non-discriminatory manner, which is for the national, i.e. Spanish, court to verify. Cf. Directive 2005/60. Jyske Bank Gibraltar v. Administración del Estado

AG Mazák hands the Region of Flanders a resounding defeat in its attempts to make sure that in certain areas people can only buy real estate if they show they have a sufficient connection to the municipality in question, as well as its attempts to attach various public service obligations to construction projects of a certain size. Libert et al. v. Flanders and All Projects & Developments NV et al. v. Flanders (NL, DE, FR)

In one of the more fascinating access to documents cases imaginable, Mr. Ivan Jurašinović achieved a partial victory in his suit to obtain access to certain documents exchanged between the Council and the Yugoslavia Tribunal regarding the prosecution of Ante Gotovina and the massacre in Knin. Jurašinović v. Council (FR 1, FR 2) Both judgements are by the Slovakian Judge Schwarcz. The exception of art. 4(2)(2) of Regulation 1049/2001 also applies to legal proceedings like the Yugoslavia Tribunal, but it was the application of that rule to the documents requested that was partially flawed.

Commission pushes for judicial activism

Now that I've finally had the chance to read the five opinions on railway infringement cases that Advocate-General Jääskinen published on September 6, I have to say that I find some of the Commission's claims distinctly odd. They seem to have tried to get in Luxembourg what they couldn't get in Brussels.

The cases against Hungary, Spain and particularly Portugal are fairly straightforward. In those cases, the Commission argued for a generally accepted reading of Directive 91/440 and the 1st Railway Package while the Member States in question either admitted wrongdoing (Portugal) or were advocating a reading of the legislation that was distinctly implausible.

In the case of Portugal, the country was in the process of abolishing the requirement that the incumbent rail operator should get prior authorisation from the Minister for Transport before taking certain decisions, just like it was in the process of setting up a system to make sure the accounts of the infrastructure manager balance. It just had not finished doing those things yet by the end of the period established in the Commission's reasoned opinion. That happens all the time in infringement proceedings. The Member State gets a slap on the wrist, but ultimately there is no real dispute between it and the Commission.

Spain tried to argue that the access charges that are paid by the transport companies for access to the railway system, being levied by a public company, were something akin to a tax and therefore needed to be established by law or by Ministerial decree. That may well be as a matter of philosophy, but it is not the approach taken in art. 4 of Directive 2001/14, which establishes a more nuanced division of power between the Ministry and the Infrastructure Manager. Likewise, Spain seems to have overlooked art. 11 of that Directive, which requires that the infrastructure charging scheme include certain performance incentives, and the requirement of art. 14 that capacity allocation should be done by the infrastructure manager and not by the Ministry.

The Hungarian case is already more tricky. That country still lost on the question of the financial viability of the infrastructure manager, just like Portugal, on the absence of performance incentives in the access charging system, like Spain, as well as on the question of whether the access charges are always high enough to cover the direct costs attributable to the transport in question. However, the Commission went on its face in the area of capacity allocation and access charge levying, where it tried to push for a more drastic approach to independence, just like in the German and Austrian cases.

What these three cases have in common is that the Commission is trying to get the Court to say that a holding model does not make the infrastructure company sufficiently independent, even though such a model, whereby the infrastructure company and one or more passenger transport companies are both owned by a holding company, is expressly permitted by art. 6 of Directive 91/440, as amended by Directive 2001/12:

Article 6
1. Member States shall take the measures necessary to ensure that separate profit and loss accounts and balance sheets are kept and published, on the one hand, for business relating to the provision of transport services by railway undertakings and, on the other, for business relating to the management of railway infrastructure. Public funds paid to one of these two areas of activity may not be transferred to the other.
The accounts for the two areas of activity shall be kept in a way that reflects this prohibition.
2. Member States may also provide that this separation shall require the organisation of distinct divisions within a single undertaking or that the infrastructure shall be managed by a separate entity.
3. Member States shall take the measures necessary to ensure that the functions determining equitable and non-discriminatory access to infrastructure, listed in Annex II, are entrusted to bodies or firms that do not themselves provide any rail transport services. Regardless of the organisational structures, this objective must be shown to have been achieved.
Member States may, however, assign to railway undertakings or any other body the collecting of the charges and the responsibility for managing the railway infrastructure, such as investment, maintenance and funding.

In its evaluation of the 1st Railway Package, specifically in Annex 5 to the evaluation, the Commission outlined exactly what it thought was necessary in order for the infrastructure manager to be sufficiently independent that it could be entrusted with the responsibility to establish access charges and allocate capacity. However, unfortunately for the Commission, annexes to Commission Staff Working Documents are not binding EU law.

So the long and the short of it is that the Advocate-General observes that the requirements of Annex 5 go beyond what is required by binding EU law, and declines the invitation to read these additional requirements into the law. Much as AG Jääskinen was willing to use his idea of the best interests of passengers to read a pro-liberalisation agenda into an ambiguous law in Westbahn v. ÖBB, he is hardly going to do that when the legislation is as clear as here.

Which brings me to my ultimate question: What is the Commission trying to achieve here? This is a sensitive area of the law, with potential ramification for the Member States that amount to billions of euros, never mind national prestige and control over a service of undoubted general interest. In three railway packages, the Commission hasn't been able to persuade the Member States to require complete unbundling. Even in the Recast Directive, which is so new that it hasn't even been formally adopted yet, the holding company model is still permitted. Perhaps the Commission would say that it is not really trying to get the Court to force Germany, France, Italy and many other Member States to abolish their holding models, because they have the alternative under art. 6(3) of Directive 2001/12 of creating an independent body for access charging and capacity allocation. But realistically, I don't see how that is any more palatable, since that would imply creating a wholly new governance model for the industry, one that doesn't exist anywhere else. (Although in Switzerland they have Trasse Schweiz to take care of the capacity allocation process.)

Then again, the Court hasn't spoken yet.

UPDATE: In a highly non-official response, a Commission official emphasised that the Commission is not bringing infringement proceedings against all countries that have a holding company model, but only those where it objects to the specific form in which this model is cast. To be continued...