Wyatt and Dashwood's European Union Law Alan Dashwood, Michael Dougan, Barry Rodger, Eleanor Spaventa and Derrick Wyatt •HART- PUBLISHING OXFORD AND PORTLAND, OREGON 2011 Contents Preface v Table of Cases xxi Table of Legislation xcv PART I: INTRODUCTION 1 1 From the Founding Treaties to the Treaty of Lisbon 3 I THE SCHUMAN PLAN AND THE ESTABLISHMENT OF THE ECSC 3 II THE EDC AND THE EPC: A FALSE DAWN 5 III THE SPAAK REPORT AND THE TWO TREATIES OF ROME 7 IV A SINGLE SET OF INSTITUTIONS 8 V ENLARGEMENT FROM SIX TO FIFTEEN 9 VI AMENDMENT AND DEVELOPMENT OF THE FOUNDING TREATIES UP TO 2004 11 A The Budgetary Treaties of 1970 and 1975 11 B Own Resources Decisions 12 C A Directly Elected European Parliament 12 D The Single European Act 12 E The Treaty on European Union 13 F The Treaty of Amsterdam 15 G The Treaty of Nice 16 VII ENLARGEMENT FROM 15 TO 27 (PLUS . .) 16 VIII TREATY REFORM SINCE 2004: FROM THE CONSTITUTIONAL TREATY TO THE TREATY OF LISBON 18 A The Treaty Establishing a Constitution for Europe 18 B The Treaty of Lisbon 19 C Yet Further Treaty Reform ... 21 2 An Overview of the Union's Primary Law 23 I INTRODUCTION 23 II THE TREATY ON EUROPEAN UNION 24 A Title I: Common Provisions 24 B Title II: Provisions on Democratic Principles 26 C Title III: Provisions on the Institutions 26 D Title IV: Provisions on Enhanced Co-operation 27 E Title V: General Provisions on the Unions External Action and Specific Provisions on the Common Foreign and Security Policy 27 F Title VI: Final Provisions 28 III THE TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION 30 IV THE RELATIONSHIP BETWEEN TEU AND TFEU 33 V OTHER WRITTEN SOURCES OF PRIMARY LAW 34 VI UNWRITTEN SOURCES OF PRIMARY LAW 36 vii viii Contents PART II: INSTITUTIONAL FUNDAMENTALS 39 41 3 The Institutions of the European Union ^ I ARTICLE 13 TEU 43 II THE EUROPEAN COUNCIL ^ III THE COUNCIL 51 IV THE COMMISSION V A NOTE ON THE HIGH REPRESENTATIVE OF THE UNION FOR ^ FOREIGN AFFAIRS AND SECURITY POLICY ^ VI THE EUROPEAN PARLIAMENT VII THE COURT OF JUSTICE OF THE EUROPEAN UNION VIII SOME CONCLUDING REMARKS: ON THE UNION'S 'INTER- ^ INSTITUTIONAL BALANCE' 4 The Union's Decision-making Procedures I A NEW DISTINCTION BETWEEN LEGISLATIVE AND NON-LEGISLATIVb ^ ACTS 71 II ADOPTION OF LEGISLATIVE ACTS 72 A Initiation of Legislative Procedures 73 B Ordinary Legislative Procedure 77 C Special Legislative Procedures 80 D Passerelle Clauses 82 E Emergency Brakes „, III ADOPTION OF NON-LEGISLATIVE ACTS 83 A Non-legislative Acts Adopted Directly Under the Treaties g6 B Non-legislative Acts Adopted as Delegated Acts 87 C Non-legislative Acts Adopted as Implementing Acts IV SOME FURTHER ISSUES CONCERNING DECISION-MAKING ^ INTERACTION BETWEEN THE UNION INSTITUTIONS 91 A The Commission's Right to Alter or Withdraw Its Proposal ^ B The Council's Power of Amendment 94 C The European Parliament's Participation , V SOME CONCLUDING REMARKS 97 5 The System of Union Competences I THE FUNDAMENTAL PRINCIPLES OF UNION COMPETENCE IN ARTICLES 4 AND 5 TEU II THE PRINCIPLE OF CONFERRAL g9 A Establishing the Existence of Union Competence o9 B Establishing the Nature of Union Competence ]05 C The Problem of'Competence Creep' nl D The Problem of 'Legal Basis Disputes' HI THE PRINCIPLE OF SUBSIDIARITY l\\ A The Meaning(s) of Subsidiarity *, B Implementing Subsidiarity: The Role of the Union's Political Institutions ll C Implementing Subsidiarity: The Role of the Union Courts g D Implementing Subsidiarity: The Role of the National Parliaments U IV THE PRINCIPLE OF PROPORTIONALITY l22 Contents ix V FLEXIBILITY 124 A Primary Flexibility: The Opt-out Provisions 125 B Secondary Flexibility: Enhanced Co-operation 127 VI SOME CONCLUDING REMARKS 131 6 Direct Actions Before the Union Courts 135 I INFRINGEMENT ACTIONS AGAINST MEMBER STATES 135 A Introduction 135 B Procedure 137 C Substantive Issues in Infringement Proceedings 143 D Fines and Penalty Payments 149 II THE ACTION FOR ANNULMENT 153 A Introduction 153 B The Time Limit 155 C Acts Susceptible of Judicial Review 156 D Standing of Privileged and Semi-privileged Applicants 160 E Standing of Non-privileged Applicants 162 F Grounds of Review 177 G The Effects of Annulment 180 III THE ACTION FOR FAILURE TO ACT 182 A Introduction 182 B No Set Time Limit 183 C Failures to Act that May Be Challenged 183 D Standing 185 E Taking a Position 187 F The Effect of a Finding of Failure to Act 189 IV THE ACTION FOR DAMAGES 189 A Introduction 189 B 'Traditional' Case Law and the Schoppenstedt Formula 191 C The Case Law after Bergaderm 195 D Concurrent Liability of the Union and the Member States 198 E Damage and Causation 198 F Limitation 199 V THE PLEA OF ILLEGALITY AND NON-EXISTENCE OF AN ACT 200 VI INTERIM MEASURES 203 VII CONCLUDING REMARKS 205 7 References for Preliminary Rulings 209 I GENERAL ISSUES 209 II QUESTIONS THAT MAY BE REFERRED 211 III COURTS AND TRIBUNALS OF THE MEMBER STATES 214 IV THE RELATIONSHIP BETWEEN THE COURT OF JUSTICE AND THE REFERRING COURT 216 V REFERRAL: DISCRETION OR DUTY? 218 A The Discretion Conferred by Article 267(2) TFEU 218 B Mandatory References 222 C References on Validity 225 VI EFFECTS OF THE RULING BY THE COURT OF JUSTICE 228 VII CONCLUDING REMARKS 230 x Contents PART III: CONSTITUTIONAL FUNDAMENTALS 233 8 The Direct Effect and Supremacy of Union Law 235 I INTRODUCTION: THE SYSTEM OF DECENTRALISED ENFORCEMENT 235 II THE DUTY OF CONSISTENT INTERPRETATION 239 III THE PRINCIPLE OF DIRECT EFFECT 244 A The Threshold Criteria for Direct Effect ^ B Who May Rely on Directly Effective Union Law? 248 C Against Whom May Directive Effective Union Law Be Enforced? 252 17(1 IV THE PRINCIPLE OF SUPREMACY m V THE RELATIONSHIP BETWEEN DIRECT EFFECT AND SUPREMACY 278 VI CONCLUDING REMARKS m 9 Judicial Protection of Union Rights before the National Courts 287 I INTRODUCTION W II THE FUNDAMENTAL RIGHT TO JUDICIAL PROCESS 289 III THE PRINCIPLE OF EQUIVALENCE IV THE PRINCIPLE OF EFFECTIVENESS ^ A The Courts Early Period: Until the Mid-1980s l B The Courts Middle Period: Until 1993 L. C The Courts Most Recent Period: Since 1993 1(13 V ACTIONS BASED DIRECTLY UPON UNION LAW ^ A The Right to Interim Relief 305 B The Right to the Recovery of Unlawfully Levied Charges ? C The Francovich Right to Reparation ,.4 D A Private Law Right to Damages? VI UNION LEGISLATION CONCERNING REMEDIES AND PROCEDURAL RULES 3 VII CONCLUDING REMARKS 318 10 General Principles of Union Law 321 I FUNCTION AND SOURCES OF GENERAL PRINCIPLES II THE GENERAL PRINCIPLE OF SINCERE OR LOYAL CO-OPERATION 322 III SUBSIDIARITY AS A GENERAL PRINCIPLE 324 IV PROPORTIONALITY ^ A The Principle of Proportionality as a Limit to the Actions of the Institutions B The Principle of Proportionality as a Limit to Member States Actions V LEGAL CERTAINTY AND LEGITIMATE EXPECTATION 3 VI THE PRINCIPLE OF NON-DISCRIMINATION 332 VII OTHER GENERAL PRINCIPLES 335 11 Fundamental Rights 337 I EVOLUTION OF THE CONCEPT 337 II THE RESPONSE OF THE POLITICAL INSTITUTIONS 33j A From the 1977 Political Declaration to the Nice Treaty ... B The Treaty of Lisbon 34° 3 III THE SCOPE OF APPLICATION OF FUNDAMENTAL RIGHTS f3 A Fundamental Rights as a Limit to the Acts of the Institutions Contents xi B Fundamental rights and Member States' Implementing Powers 344 C Member States Acting within the Scope of Union law 346 D The Institutional Structure of the Union and Fundamental Rights 351 E Relationship between the European Union and the European Convention of Human Rights 354 12 The Charter of Fundamental Rights 359 I BACKGROUND TO THE DRAFTING OF THE CHARTER 359 II THE CHARTER: STRUCTURE AND SUBSTANTIVE PROVISIONS 361 A Structure of the Charter 361 B Preamble 362 C Substantive Provisions 363 III THE HORIZONTAL PROVISIONS: INTERPRETATION AND SCOPE OF APPLICATION OF THE CHARTER 382 A Article 51: The Charters Field of Application 382 B Article 52: Scope of the Charter's Provisions 383 C Article 53: Level of Protection 385 D Article 54: Abuse of Rights 385 IV THE UK AND POLISH PROTOCOL 386 PART IV: THE INTERNAL MARKET 389 13 Fiscal Barriers to the Free Movement of Goods 391 I THE FREE MOVEMENT OF GOODS 391 A Customs Union and Charges Having Equivalent Effect 392 B Customs Duties and Charges Having Equivalent Effect 393 C Charges Falling Outside the Scope of Article 30 TFEU: Services Provided to the Importer and EU Law Obligations 394 II PROHIBITION ON DISCRIMINATORY INTERNAL TAXATION 395 A Discriminatory Taxation: Article 110(1) TFEU 396 B Protectionist Taxation: Article 110(2) TFEU 399 C The Importance of a Comparator 401 III THE RELATIONSHIP BETWEEN ARTICLES 30 AND 110 TFEU 401 IV THE RELATIONSHIP BETWEEN ARTICLES 30 AND 110 TFEU AND OTHER PROVISIONS OF THE TREATY 403 V DISCRIMINATORY TAX TREATMENT OF EXPORTS 404 VI THE COMMON CUSTOMS TARIFF AND EXTERNAL RELATIONS 405 14 The Free Movement of Goods: Quantitative Restrictions and Measures Having Equivalent Effect 407 I INTRODUCTION 408 II QUANTITATIVE RESTRICTIONS ON IMPORTS AND EXPORTS 408 III MEASURES HAVING EQUIVALENT EFFECT TO QUANTITATIVE RESTRICTIONS ON IMPORTS 409 A The Inception of the Court's Case Law: Dassonville and Cassis de Dijon 409 B The Application of the Cassis Ruling 413 C The Sunday Trading Saga 415 D The Keck and Mithouard Judgment 418 E The Case Law after the Keck Judgment 422 F The Member States' Positive Duties 430 xii Contents G The Cross-border Element and Reverse Discrimination 431 IV MEASURES HAVING EQUIVALENT EFFECT TO QUANTITATIVE RESRICTIONS ON EXPORTS 4S V GENERAL REMARKS ABOUT ARTICLES 34 AND 35 TFEU W VI DEROGATION FROM ARTICLES 34 AND 35 TFEU 4ii A Grounds of