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GUIDE to the CASE LAW of the European Court of Justice on Articles 49 Et Seq

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GUIDE to the CASE LAW of the European Court of Justice on Articles 49 Et Seq 1 GUIDE TO THE CASE LAW Of the European Court of Justice on Articles 49 et seq. TFEU FREEDOM OF ESTABLISHMENT European Commission 2 PREFACE The present guide forms part of a series of guides concerning the case law of the European Court of Justice. To date this series includes publications concerning Article 49 TFEU et seq. (Freedom of Establishment) and Article 56 TFEU et seq. (Freedom to Provide Services). A separate chapter in the guide concerning Article 56 TFEU is dedicated to the case law on Directive 2006/123/EC on services in the internal market (Services Directive). The guides are produced and updated by the European Commission, Internal Market, Industry, Entrepreneurship and SMEs Directorate-General. This guide, which concerns Article 49 TFEU, aims to present the cases in a practical way by gathering together the essential passages of the cases, thus making it possible to find all the relevant parts of the judgement without having to consult the complete text of the case. The structure of the guide, following recent case law, provides an approach to Article 49 intended to help not only academics, but also practitioners directly involved in dealing with infringements. In the 2015 Single Market Strategy1 and the accompanying Staff Working Document2, the Commission states the intention to engage in a more active enforcement policy. In this respect, the guides, by presenting the relevant case law in an organised way, aim to provide clarity on the legal interpretations given by the Court of fundamental notions, on the proportionality analysis and on the correct application of fundamental freedoms of the Treaty. To highlight the essential passages, without ignoring their context, the reasoning of the Court is given without alteration, but the key words are shown in bold and italics. It must be noted that this method of presentation does not commit the Court, only the editors. Within each chapter, cases are cited in reverse chronological order starting with the most recent. The dynamic development of the interpretation by the Court of the concept of "restriction" on the freedom to provide services can thus be followed. For further information concerning the Guides to the Case Law please contact the following Unit: Unit E1 Service policy for Consumers [email protected] 1http://ec.europa.eu/DocsRoom/documents/14007?locale=en 2http://ec.europa.eu/DocsRoom/documents/14012 3 CONTENTS TABLE OF EQUIVALENCES OF TREATY ARTICLES ................................ 6 1 – FIELDS OF APPLICATION ........................................................................... 7 1.1 NATURAL PERSONS ................................................................................................ 7 1.2 LEGAL PERSONS AND COMPANIES .......................................................................... 8 1.2.1 Legal Persons ......................................................................................................... 8 1.2.2 Nationality of a company ....................................................................................... 8 1.2.3 Limits of application of the right of establishment ............................................... 9 2 – DEFINITION OF ''ESTABLISHMENT'' .................................................... 14 2.1 ECONOMIC ACTIVITY.............................................................................................14 2.2 PERMANENT ACTIVITY (OF A STABLE AND CONTINUOUS NATURE) .........................15 2.3 SELF-EMPLOYED ACTIVITIES ..................................................................................19 2.4 CROSS-BORDER CHARACTER .................................................................................22 3 – TYPES OF ESTABLISHMENT .................................................................... 25 3.1 PRIMARY ESTABLISHMENT ....................................................................................25 3.1.1 Natural persons ................................................................................................... 25 3.1.2 Legal persons - Transfer of central management and control of a company to another Member State ........................................................................................ 25 3.2 SECONDARY ESTABLISHMENT (RIGHT TO MAINTAIN MORE THAN ONE PLACE OF WORK WITHIN THE EUROPEAN UNION) .................................................................27 3.2.1 Natural persons ................................................................................................... 27 3.2.2 Legal persons ....................................................................................................... 28 4 – COROLLARIES OF THE FREEDOM OF ESTABLISHMENT ............. 31 4.1 ENTRY AND RESIDENCE .........................................................................................31 4.2 RIGHT TO RESIDE AFTER CEASING AN ACTIVITY ......................................................32 4.3 OTHER RIGHTS OF THE FREEDOM OF ESTABLISHMENT ...........................................32 4 5 – DEFINITION OF RESTRICTIONS ............................................................. 35 5.1 GENERAL PRINCIPLES ............................................................................................35 5.2 DISCRIMINATORY MEASURES ...............................................................................37 5.3 NON-DISCRIMINATORY MEASURES .......................................................................42 5.4 ORIGIN OF RESTRICTIONS ......................................................................................46 5.4.1 Restrictions emanating from the state of destination ........................................ 46 5.4.2 Restrictions emanating from the state of origin ................................................. 48 5.4.3 Restrictions emanating from associations or organisations not governed by public law ............................................................................................................. 52 6 – JUSTIFICATION OF RESTRICTIONS ...................................................... 53 6.1 DISCRIMINATORY MEASURES ...............................................................................53 6.1.1 Participation in the exercise of official authority (Article 51TFEU) ..................... 53 6.1.2 Public policy, public security and public health (Article 52 TFEU) ....................... 58 6.1.3 Protection of MS’ security (Article 346 TFEU) ..................................................... 63 6.2 NON-DISCRIMINATORY MEASURES .......................................................................64 6.2.1 Measures justified by an imperative requirement in the general interest ......... 64 6.2.2 Measures suitable for securing the attainment of the objective pursued and not going beyond what is necessary (proportionality) .............................................. 69 6.3 MEASURES AIMING TO PROHIBIT THE CIRCUMVENTION OF NATIONAL RULES ........78 7 – LEGAL CONSIDERATIONS ....................................................................... 80 7.1 INTERPRETATION OF ARTICLE 49 TFEU AS A ‘FUNDAMENTAL’ PRINCIPLE OF EUROPEAN UNION LAW ........................................................................................80 7.2 DIRECT APPLICABILITY OF ARTICLE 49 TFEU ............................................................82 7.3 OBLIGATION OF MEMBER STATES TO MODIFY LAWS INCOMPATIBLE WITH THE RIGHT OF ESTABLISHMENT ....................................................................................84 7.4 RIGHT TO REDRESS IN THE CASE OF DAMAGE ATTRIBUTABLE TO A MEMBER STATE 85 7.4.1 Principle of the right to reparation (corollary of direct effect) ........................... 85 7.4.2 The three pre-conditions for the right to redress (according to European Union law) ...................................................................................................................... 87 7.4.3 Implementation of redress (according to national law) ...................................... 89 8 – PROCEDURAL GUARANTIES IN CONNECTION WITH 5 RESTRICTIONS ............................................................................................. 91 8.1 OBLIGATION TO VERIFY AND COMPARE ON THE PART OF THE STATE OF DESTINATION .......................................................................................................91 8.2 OTHER PROCEDURAL GUARANTIES: REASON FOR REFUSAL, RIGHT TO LEGAL PROCEEDINGS, PENALTIES.....................................................................................92 9 - SPECIFIC QUESTIONS ................................................................................. 94 9.1 RELATION TO OTHER PRIMARY LAW ......................................................................94 9.1.1 Article 4(3) TEU .................................................................................................... 94 9.1.2 Article 18 TFEU ..................................................................................................... 94 9.1.3 Article 21(1) TFEU ................................................................................................ 96 9.1.4 Article 50 TFEU ..................................................................................................... 97 9.1.5 Article 53 TFEU ..................................................................................................... 98 9.1.6 Article 54 TFEU ..................................................................................................... 99 9.1.7 Article 56 TFEU ..................................................................................................
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