Opinion of Advocate General

Opinion of GA – Case Josemann

OPINION OF ADVOCATE GENERAL JOSEMANN delivered on January 18th 2010

Presented by: Zuzanna Warso, Henning Schober, Jonas Hein

JOSEMANN

(1) The Raad van State asks whether a public ordinance prohibiting the access to soft-drug retail locations subject to the Dutch AHOJG, or non prosecution policy (“coffee shops”) violates the provisions of the EC treaty. In light of the hearings process before the Court on January 15 th 2010 however, it seems the parties consider the issue of whether in the regulation of drug supply and vending, national authorities are in any way bound by the principles of European law or not, to be at the material core of the proceedings. The question of the Raad van State arises in the context of a national proceeding in which an owner of a coffeeshop, Mr. Joseman, charged the closure of his establishment by Dutch authorities on ground of violation against Art. 2 Maastricht Business Ordinance, which prohibits the access of non-residents to said coffeeshops.

(2) We note that at its core, the question of the Raad van State touches on the topic of competencies of member states in the matter of drug policy and their implications on the justification and proportionality standard to be applied by national courts. We shall first summarize briefly the Dutch legal background and subsequently analyze first the questions asked by the court concerning the access to coffee shops.

I. LEGAL AND FACTUAL BACKGROUND

A- Summary of proceedings

(3) By order of 7 September 2006 the Mayor of Maastricht closed the coffeeshop "Easy Going". The objection filed by the owner Mr. Joseman was consequently rejected by the Mayor. The Maastricht local Tribunal annulled the orders of 28 March 2007 and of 7 September 2006.

(4) Both Mr. J. and the Mayor appealed against this judgment before the Council of State. The Council of State communicated to the parties that it intends to request the Court of Justice of the European Communities (hereafter: the ECJ) to answer a number of preliminary questions.

B- Reasoning and factual background

(5) Mr. J. operates the coffeeshop "Easy Going", where – apart from alcoholic beverage and food – soft drugs are sold and consumed. Although the trade in soft drugs is prohibited by law, the authorities do not prosecute violation of this prohibition, if that trade takes place in a recognized coffeeshop and if thereby certain conditions are met. Coffeeshop "Easy Going" falls under this so- called “gedoogbeleid”.

(6) By order of September 7th 2006, upheld by order of March 28th 2007, the Mayor closed the coffeeshop "Easy Going" temporarily, because it had been observed twice that Union citizens, who do not reside in the Netherlands, were admitted to the premises, this being contrary to the provisions of the Maastricht Business Ordinance (hereinafter: MBO).

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C- Relevant Dutch legislation/ provisions

(7) According to Article 1 of the Constitution every person in the Netherlands has to be treated equally in equal cases. Discrimination on the grounds of religion, belief, political opinion, race, gender or on any other ground is unlawful.

(8) Article 2 MBO prohibits that other persons than residents have access to coffee shops. Residents are defined as persons who have their real residence in the Netherlands.

D- Possible relevant EC legislation

(9) According to Article 12 of the Treaty establishing the European Community (hereinafter: TEC) within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.

(10) According to Art. 18 Para. 1 TEC every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.

(11) According to Art. 29 TEC quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.

(12) According to Art. 49 TEC restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

E- Account of Dutch law on drugs

(13) For a better understanding of the discussion below, it is necessary to outline briefly the Dutch legal perspective on drugs, most importantly on so called 'soft drugs'. It shall be emphasized that there is only one relevant provision, the Opium Act (1919, 1976), regulating narcotic drugs. In accordance with Dutch drug policy arresting and criminalizing users possessing small quantities for personal use of any drug is not regarded as a priority. As this 'rule' is solely based on certain guidelines issued by the Office of the Public Prosecutor (Guideline 1996, revised in 2001), one has no trouble recognizing that there is a 'grey area' in Dutch legislative effort regarding the handling of drugs.

(14) In a letter from the Dutch government to the President of the House of Representatives of the Netherlands from 11 September 2009, the peculiar situation has been realized and been given utmost attention. It is stated, that not only the assortment of stimulants, that pose a risk to both individual and public health, has increased constantly in recent years, but also that nuisance and even more importantly drug-related organized crime place an ever-increasing burden on local authorities.

(15) For those reasons, the Advisory Committee on Drugs Policy established a priority list of issues in advising the government on the future of drugs policy. Issues Nr. 2 and 3 on that list concern the matter at hand. The committee states that coffee shops have grown into large-scale cannabis sales outlets, which become more and more uncontrollable. It recommends scaling those coffee shops down again to a size mainly for local users. Interlinked with larger cannabis sales outlets is inevitably organized crime, the combat of which must be intensified and broadened, the committee further states.

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(16) Since national drug policy is decentralized to a local level, mayors have already been given greater powers e.g. under Sections 174a of the Municipalities Act and 13b of the Opium Act to tackle nuisance of various kinds more effectively. Within the outlined framework, the provision in question here is to be understood as a pilot project.

II. REASONING

(17) Considering the questions asked by the Raad van State, we are to discuss whether a public ordinance prohibiting the access to “coffeshops”, that is soft-drug retail locations subject to the Dutch AHOJG policy, violates the provisions of the EC treaty.

A- Concerning the Free Movement of Goods

(18) As far as the provisions of the free movement of goods are concerned, in our view, the rules of the Maastricht ordenance do not fall within the scope of the EC Treaty. The Dutch provisions neither explicitly nor implicitly distinguish between domestic products and products from other Member States. Having clarified this, they fail to hinder trade between the Member States in a discriminatory manner. In fact, Art. 2 MBO cannot even be classified as a product requirement, but rather constitutes a selling arrangement and as such applies to all relevant goods. It effects the marketing of domestic products and products from other Member States in the same manner, legally and factually. Thus, Art. 2 MBO falls outside the scope of applicability of the provisions concerning the free movement of goods.

B- Concerning the Freedom of Services

(19) This however has no effect on the possible applicability of the freedom of services. The Court has clarified it also to include a “passive” element or the reception of a “service”. In Vestergaard it was held that “the right to exercise the freedom to provide services includes the freedom for the recipients of services to go to another Member State in order to receive a service there, without being obstructed by restrictions.” (ECJ, C-55/98, “Vestergaard”) This claim was repeated in Calfa, where the Court reminded, “the principle of freedom to provide services established in Article 59 of the Treaty, which is one of its fundamental principles, includes the freedom for the recipients of services to go to another Member State in order to receive a service there.” (ECJ, C-348/96, “Calfa”) In addition, the Court acknowledged: “tourists must be regarded as recipients of services.”

(20) In the present case, Art. 2 MBO draws a distinction on the basis of residence. These mainly operate to the detriment of nationals of other Member States, considering that non-residents will in the majority of cases be of other nationality. Consequently, the Maastricht regulation appears to violate the principle of equal treatment of Art. 49 TEC indirectly, namely the freedom of tourists to go to a foreign country and enjoy services under the same conditions as residents. i. “Access” as corollary right

(21) However, it still remains to be verified, if the access to a location of retail in itself can be legitimately claimed to fall within the peripheral realms of a “service”, or, in other words, if it is an integral part of the concept of a service. Art. 50 TEC defines “services” as such actions that are provided for remuneration. While the entrance to a location of retail lacks commercial or contractual character as such, the freedom to receive services also includes corollary rights of entry and departure as well as the right to remain in the host country for the duration of the service as emphasized by the directives 73/148/EEC and 2004/38/EC. It is obviously also a necessary corollary of every provision of service that the possibility of attaining it be permitted. The freedom

3 Opinion of GA – Case Josemann of services can thereby also be specified as a freedom of movement congruent to Art. 12, 18 TEC. This underlines its warranting character in the abolishment process of all obstacles to intercommunity transfer of services.

(22) We therefore claim to have established that a regulation concerning the access to places of retail falls within the scope of the TEC. Thus, a provision that prohibits this access, such as Art. 2 MBO, constitutes a violation of the freedom of services. ii. Concerning the differentiation of legal and illegal products

(23) This result, however, shall not deflect the litigious issue of whether the sale of soft drugs is a “service” in the sense of Art. 50 TEC. While we fully acknowledge the doubts and controversies raised by the very particular status of soft-drugs in Netherlands and the policy of tolerance deployed by the Dutch policy, we deny this to be the question at hand.

(24) Art. 2 MBO does not differentiate between the sale of soft drugs and that of legal products, such as beverages and snacks, but rather simply prohibits the access to the latter accessorily. The sale of these legal products undoubtedly falls under the definition of a service in the view of Art. 50 TEC. We argue that from a perspective of European law it should be of absolute irrelevance that possibly illegal products are sold in the store in question, when the access to said legal products is denied. iii. Result

(25) Hence, we argue that the regulation at issue in the main proceedings, concerning the access of non-residents to coffeeshops, falls within the scope of the EC treaty and violates the provisions concerning the free movement of services.

C- Justification

(26) Any violation of the freedom of services needs to be justified and, if that is the case, furthermore needs to fulfill the requisites of proportionality. i. Ground of Justification applicable

(27) Article 46 TEC allows Member States to derogate from the Treaty provisions on the freedom of services on grounds of public policy, public security and public health.

(28) Without doubt, the main motivation behind the provision at hand and the predominant reason accessible for justification of the above-mentioned violation, is that of public policy as defined in Art. 55 in connection to Art. 46 TEC. The Mayor of Maastricht argues that by the prohibition of Art. 2 MBO, the demand of drugs within the Netherlands is reduced, the supply infrastructure weakened and organized crime overall targeted. Additionally, he contends that according to the obligations of the Netherlands within the Schengen Agreement, Art. 2 MBO shall be seen as a means to address the issue of drug tourism and fight drug abuse.

(29) In the present case, the exception of ‘public policy’ needs to justify a violation of the freedom of services. The Court, in its established jurisdiction, has held that “the concept of ‘public policy’ in the Community context, particularly as justification for a derogation from the fundamental principle of the freedom to provide services, must be interpreted strictly” (ECJ C-36/02 “Omega – Laserdrome”). It goes on to argue that the justification ground of public policy may only be relied on, if “a genuine and sufficiently serious threat to a fundamental interest of society” can be

4 Opinion of GA – Case Josemann established (ECJ C-54/99 Église de Scientologie, paragraph 17). With this in mind, it needs to be proven that by violating the freedom of services a fundamental interest of society is addressed.

(30) The issue of drug tourism and drug abuse has for years been a major concern of coercive action of the member states. References in this respect are the Four Year EU Action Plan on Drugs and the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). It is not only a primary target in the criminological efforts of all member states but also, due to its vast social implications (as the recent EMCDDA Annual Report 2009 shows), of particular importance to the intergovernmental dialog within the realms of Police and Judicial Co-Operation in Criminal Matters. In light of this, combating drug tourism and criminality cannot be seen as anything less than a fundamental interest of society. ii. Proportionality of Art. 2 MBO

(31) When considering the proportionality of Art. 2 MBO we aim at balancing whether in the case at hand, fundamental interests of society outweigh the freedom of services. In light of the fact that we have verified a violation of a fundamental principle of EC law, the analysis of the existence of milder measures needs to be treated with utmost sensitivity. In accordance with the principle of subsidiarity, we believe the ability of verification of the most efficient and mildest means lies within the necessary competencies of the national institutions directly concerned. This is even more so, if the regulation of the named fundamental interest of society constitutes a genuine competency of the Member States.

(32) We believe we have therewith touched on the most relevant problem of this case: whether all drug policy concerning the regulation of supply, production and sale of drugs, is at all a competency of the European Community. The questions raised on legality, de facto legality or illegality of soft drugs in Holland, cannot be addressed by Community organs in particular the Court, if the legislative competencies remain within the powers of the Member States. We will therefore focus on the question of competencies.

(33) The EC and EU Treaties refer to drug policy in three instances: Art. 29 Para. 2 TEU, Art. 31 Para. 1 lit. e) TEU and Art. 152 Para. 1 TEC. The only provision that could, if at all, constitute a community competency, is therefore the latter. Thereby, the Community receives “complementary” powers in the reduction of “drugs-related health damage, including information and prevention”. This reserved wording has good reasons. Drug policies vary from member state to member state, social health issues in this respect are of very varied amplitude and national policy strategies are diverse. Considering further that there is no legal European market for drugs and hence no necessity for universal legislation on the prohibition or not of their retail and production, the TEC employs an abrasive taxonomy as far as drug policy competencies are concerned. This, we argue, complies with subsidiary requirements as pronounced by Art. 5 TEC.

(34) This conclusion is not refuted by a possible recourse to Art. 49 TEC. The Plaintiff argues that, as the sale of soft drugs has assumed to be a habitual and public matter, it qualifies as a de facto legalized conduct and is therefore to be seen as a “commercial activity” in the sense of Art. 50 TEC. In this respect we would like to emphasize the words of the Representative of the Netherlands, “there is no such thing as de facto legality”. Legality as a legal concept refers to the compliance of public or private actions with the norms of positive law. We cannot seem to emphasize enough that in the Netherlands according to positive law the sale of soft drugs is illegal. Now, if and in so far as Dutch authorities have decided on a non-prosecution policy, we are not confronted with a situation of “de facto legality”. This merely constitutes a perfectly legitimate executive decision to usurp discretion offered by criminal law, which however does not alter positive law. It is an essential necessity of the division of powers. Or, put in other words, if a

5 Opinion of GA – Case Josemann police patrol legitimately decides not to fine a driver that has exceeded the speed limit by 5 km/h, driving 125 km/h in a 120 km/h zone is not suddenly legal according to positive law.

(35) We have therefore established that a competency of the community in the regulation of drug policy can in no plausible way be established. In a plural and multilevel system of competencies ruled by the principle of referral, law application must respect the essential necessity of particular legislative approaches in certain regulation matters. The authors of the Treaties reprimand such discipline within the normative catalogs of TEU and TEC, in particular Art. 6 Para. 3, Art. 5 TEU and Art. 5 TEC.

(36) Returning therefore to the question of proportionality, we are now enriched with a further, decisive cognition. Art. 2 MBO violates a TEC provision, the Free Movement of Services of Art. 49 TEC, while fulfilling aims that completely fall within the scope of competency of the Dutch Government. Taking this into consideration, it is not our duty to argue whether the measures taken are proportionate and resemble the mildest means available. However it is up to us to advise the Dutch organs competent to resolve the question at hand with a considerable advertence to the violated principle of European law. We would especially like to draw attention to the fact that a regulation that merely prohibits the sale of soft drugs, rather than the access to coffee shops for non-residents would lack any implication on European law whatsoever.

III. CONCLUSION

(37) In light of the foregoing, we recommend that the Court answer the questions of the Raad van State as follows:

A provision, which prohibits the access of non-residents to coffee shops as Art. 2 MBO, constitutes a violation of the provisions of the Free Movement of Services as set out by Art. 49 TEC. The ground of public policy is a legitimate aim to justify this violation. When considering the proportionality of the measures used, in particular the balancing of concordance of the legal positions in conflict, the Raad van State is requested to pay special attention to the implications to European law as they arise in this case.