The Week Nº17

IN-DEPTH:

Is Direct Effect Morphing into Something Different?

Daniel Sarmiento and Sara Iglesias Sánchez

Beyond the Runway: Understanding Competition Law Impacts of Schiphol Slot Reduction

Tuvana Aras and David van Wamel

Can defectively appointed judges enter into dialogue with the Court of Justice? – Maybe yes; and yet no

Paweł Filipek and Maciej Taborowski

Blanket ban on leave compensation in the event of voluntary early retirement and employee’s burden of proof for reasons for prior non-utilisation violate EU law (Case C-218/22)

Dominik Leist

With or without prejudice to the Geneva Convention? Refugees sur places as a result of subsequent circumstances determined by the applicant (Case C -222/22)

Giulia Raimondo and Silvia Rizzuto

The Effectiveness of Directives in Horizontal Situations: the Charter Unchained? (K.L. v. X)

Fien Van Reempts

The EU’s Trade Defence in Action - The General Court upholds the Commission’s significant distortion methodology in T-762/20

Niels Kirst

EU Law Live Analysis – General Court clarifies adjustments in dumping calculations in investigations with significant distortions (Cases T-764/20, T-763/20 and T-762/20)

Elyse Kneller & Victor Crochet

Clarifications of the ‘sufficient link’ test under Article 21 TFEU for taking into account ‘child-raising periods’ completed in another Member State (C-283/21, VA v Deutsche Rentenverischerung Bund

Pauline Melin

THE LONG READ:

The Nature of the European Union in the 21st century

Jaap Hoeksma

IN-DEPT H

Is Direct Effect Morphing into Something Different?

Daniel Sarmiento and Sara Iglesias Sánchez

The classics of EU law have the tendency to be in constant motion. When a well-ingrained principle appears to be consolidated in the system, a new variable reawakens old debates and we are forced to rerun what appeared to be settled for good. The reverse is also true: categories that seemed forgotten can reappear with a vengeance and force us into reassessing their new life, like zombies with new flesh. This is a sign of the vigour of EU integration and its legal system, in perpetual adaptation and adjustment to the demands of the development of an ever-closing Union. To some it can be a sign of arbitrariness and legal uncertainty, to others it can be the definitive proof of the Union’s genius and the key for its long-term survival.

In the past months there were several examples of how this constant motion can cause surprise, frustration, admiration or perplexity, maybe all at once. Furthermore, these precedents touched no other than the sacrosanct and consolidated category of direct effect of Union law. The fact that the Court of Justice keeps experimenting with the very core principle that guarantees the possibility for Union law to be invoked (a feature that acts like the electrical impulses of the nervous system of the EU’s legal order), is proof that no category, rule or principle is immune to the state of constant motion. To make matters even more intriguing, all the judgments to which we will refer in this Insight were delivered by the Grand Chamber of the Court of Justice. These are no accidents or anecdotal deviations from the standard rule-book. On the contrary, they are well-reflected movements taken at the apex of the EU’s highest court, so the message should be carefully attended.

In K.L. (C-715/20) delivered on 20 of February of 2024, the Court of Justice took a step further in the complex articulation of the relation between Directives and general principles of Union law, particularly when the Directive concerns disputes between private parties. To date, the standard position was well-established: Directives that ‘concretise’ a general principle of Union law can have horizontal direct effect among private parties, as long as the general principle is self-executing and requires no ulterior legislation to make it directly invocable. This approach, although highly criticised, is in our view a correct development, or otherwise the enactment of a Directive would have the counterproductive effect of neutralising the effectiveness of a general principle of Union law. Secondary law cannot undermine primary law, and thus the Mangold, Kükükdeveci, Bauer (and many others) case-law. But in K.L. something new has emerged, because the case concerned a Directive that concretises a general principle (Directive 1999/70 on fixed-term work contracts, which is a concrete materialisation of the general principle of equality applied to two different types of contracts), but the Court did not rule on the substance of this rule (equality), but on a different angle: the lack of obligation of an employer to state reasons when dismissing an employer with a fixed-term contract. This rule was not only considered illegal because it was discriminatory, but it was also illegal because it precluded the worker from knowing the reasons of his or her dismissal, and as a result he

or she would have no access to justice. Hence, the connection with Article 47 of the Charter and the fundamental right to an effective legal remedy (a general principle of Union law). This connection is what paves the way to a directly effective claim of a Directive in a dispute among private parties.

K.L. is no obscure ruling in a three-judgment with no Opinion of the Advocate General. On the contrary, this is the Grand Chamber speaking, and with a prior Opinion of the Advocate General openly admitting that there was no way to give direct effect to the Directive in light of the previous case-law. But the Court of Justice found a way.

This is the open-ended interpretation of the traditional notion of direct effect. Now let us turn to the restrictive interpretation, delivered in the case of EUIPO v. KaiKai, delivered only one week later.

In EUIPO v. KaiKai, the Court of Justice was faced with a matter that was only partly settled: to what extent should an international agreement have direct effect vis-à-vis secondary Union law? Be aware that this takes us into a different universe, in which there is no discussion as to the direct effect of Union law vis-à-vis national law. Here we are in the world of international agreements interacting with acts of Union secondary law, a rather unusual configuration to discuss direct effect, but nevertheless a perfectly plausible situation which may appear rather frequently in areas such as trade, environmental policy and, as in this case, intellectual property law. Without going into the details of a rather complex framework and procedural background, the Court of Justice was asked to determine if the Paris Convention for the Protection of Industrial Property had direct effect and superseded Regulation 6/2002 on Community designs, for the purposes of determining whether the right of priority to file an application to a Community design was governed by the Paris Convention or by Regulation 6/2002. Once again contradicting its Advocate General (and the General Court), the Court of Justice came to a rather surprising outcome: the Paris Convention did not have direct effect and there were no lacunae whatsoever in the Regulation, making it impossible to undertake a conform interpretation of Union law in light of the agreement. This was the outcome in spite of the fact that Union law made several references to the international agreements applicable to the case, and there was a common understanding about the fact that the Regulation had considerable gaps in its provisions. The judgment thus puts a further nail in the coffin of direct effect in the universe of international agreements, where the Court of Justice has traditionally been very sceptical of providing such agreements the same effectiveness as it is willing to grant Union law, and particularly instruments of secondary Union law. The restrictiveness does not only apply to the determination of direct effect, but also to the duty of producing a conform interpretation. This outcome maximised the effects of Union law vis-á-vis international law, sacrificing the direct effect of international agreements in the altar of the effectiveness of Union law.

The reader may say at this stage that the two judgments are consistent with the Court’s previous evolution in defining direct effect in horizontal situations in national courts, on the one hand, and its construal when applied to international agreements entered into by the Union, on the other hand. But look closer and you will be surprised.

In the more obscure corners of the deep and vast forest of direct effect there are some worrying developments taking place as of late. These are not usually spotted because they touch on highly technical areas and they are

portrayed outside the context of the traditional case-law on direct effect. And these worrying developments are on the rise, as it can be seen from the following two examples.

In the famous (for tax laywers) ‘Danish cases’ (C-115/16, C-118/16, C-119/16 and C-299/16 as well as cases C-116/16 and C-117/16) a surprising twist in the evolution of the case-law on Directives took place. In contrast with the traditional stance on the prohibition of ‘reverse direct effect’, which precludes Member States from relying on non-transposed Directives to restrict rights of individuals, the Court of Justice took the opposite turn, openly allowing the Member States to invoke a Directive for the purposes of ensuring the general principle of prohibition of abuse. This decision does not fit comfortably with the traditional stance since Berlusconi and others, but so be it for the sake of the fight against tax fraud. And last December the Court of Justice gave the screw yet another turn, in Infraestruturas de Portugal and Futrifer Indústrias Ferroviárias (C-66/22), by green-lighting national procurement authorities to invoke a non-transposed procurement Directive with the aim of excluding tenderers who have breached competition law. If this is not a case of ‘reverse direct effect’, we very much doubt what else it could be.

So what is going on? Are we witnessing a growing trend towards a more expansive or a more restrictive approach towards direct effect? In our view, such an angle of analysis is wrong. Each judgment certainty points in different directions, but the overall trend of the case-law, or whether there is a single direction here involved, is uncertain. To our understanding, what we are seeing is not so much a change in the point of destination, whether the overall or the specific destination, but a change in the morphology of the category of direct effect. Like Dr. Seth Brundle in The Fly, we are witnessing the gradual and apparently unstoppable transformation of direct effect into something different, a sort of Brundlefly of Union law. If Directives had no direct effect in disputes among private parties, the crude reality is that they are indeed starting to do so in a complex and sometimes messy way, with the categories overlapping and the case-law trying to make sense of it all, but with the overall outcome of recognising horizontally effective Directives. If an international agreement is intended to have direct effect, the instances in which it will do will be rather exceptional, particularly when there is conflicting act of secondary Union law, whose ability to prevail will leave little margin of hope to the agreement. And if Directives are not intended to have ‘reverse direct effect’, think twice, because they certainly will if it is with the aim of fighting a noble cause, like the prevention of tax fraud or anti-competitive conducts.

This mutation of direct effect is worrying, because the official message is still, well, the official message: there is no horizontal direct effect, international agreements have direct effect, ‘reverse direct effect’ is wrong and Member States should refrain from doing it, etc… But the reality is, well, quite the opposite.

These considerations lead us to share our frustration with the overall outcome and its worrying impact in the overall consistency of a highly relevant category of Union law, but also to think constructively: is there light at the end of this tunnel? Probably there is, and such a light would require either the repeal of the Directive as an act of Union law, erasing it from the face of the Treaties, or to introduce a new category of Directive, so that the

Union legislature could choose between ‘standard Directives’ which would have direct effect like Regulations, and ‘restrained Directives’, which would have no direct effect. In fact, this is what the Treaties already provided in the past through the creation of Framework Decisions, but in coexistence with a Directive that also (at least officially) did not have direct effect in many configurations. Now the time may have come to simply be honest and admit that some Directives will have direct effect in all cases, while others will not, according to the democratic choice of the Union legislator.

Is this realistic? Probably not. But the alternative is to live with a Brundlefly direct effect, and we all know how ugly that poor creature was, and what a sad fortune it had to endure at the end of the film.

Daniel Sarmiento is Professor of EU Law at the Universidad Complutense of Madrid and Editor-in-Chief of EU Law Live.

Sara Iglesias is Professor of EU Law at the Universidad Complutense of Madrid and In-Depth/Weekend Edition editor at EU Law Live.

SUGGESTED CITATION: Sarmiento, D. and Iglesias, S.; “Is Direct Effect Morphing into Something Different?”, EU Law Live, 04/03/2024, https:// eulawlive.com/insight-is-direct-effect-morphing-into-something-different-by-daniel-sarmiento-and-sara-iglesias-sanchez/

Beyond the Runway: Understanding Competition Law Impacts of Schiphol Slot Reduction

Tuvana Aras and David van Wamel

1. Introduction

Although progress is being made, aviation interests and environmental considerations still often collide. This has arguably been the case in the ‘Schiphol slot-reduction saga’, in which the Dutch Government, to combat noise pollution, drafted a plan to reduce the number of flight movements at Amsterdam Schiphol Airport (‘Schiphol Airport’) from 500,000 to 440,000 per year. The plan would have resulted in the reduction of slots available at Schiphol Airport. The issue has not only caused discord from an operational and aero-political point of view but also led to an interesting chain of events in the field of EU competition law.

The Dutch Government eventually retracted the reduction plan. Following this decision, the European Commission (‘Commission’) issued a rather unusual press release on the Directorate-General for Competition’s (‘DG COMP’) website, welcoming ‘the positive developments at Amsterdam airport enabling new entrant JetBlue Airways Corporation (‘JetBlue’) to continue operating at the airport’. It notes in this regard that the Commission was ready to adopt interim measures, had JetBlue not secured the necessary slots.

This Op-Ed aims to clarify DG COMP’s involvement in the slot-reduction saga and the interesting enforcement choices it potentially made, which would have led to the imposition of interim measures in what eventually was a dispute about the Dutch State’s intervention in pursuing environmental goals.

2. Background of the dispute: What happened to JetBlue?

One of the airlines that was directly hit by the slot reduction plan at Schiphol Airport was the United Statesbased low-cost carrier JetBlue which was planning to start regular operations between New York-Amsterdam and Boston-Amsterdam. When JetBlue initially asked for slots to operate these routes, the Dutch Slot Coordinator (‘ACNL’) refused the request due to the lack of available slots. However, following JetBlue’s complaint to the Department of Transport of the United States (‘DoT’), under the International Air Transportation Fair Competitive Practices Act (‘IATFCPA’) against the Dutch Government in February 2023, ACNL reportedly allocated two slot pairs to JetBlue.

Although JetBlue secured two pairs of slots until the IATA Summer 2024 season, the airline was later informed that it could not obtain historic rights (grandfather rights) over these slots for the next season due to their ad hoc nature. This would mean that the airline would have to acquire new slots for the IATA Summer 2024 season,

which would have been impossible for JetBlue through the administrative slot allocation scheme due to the capacity reduction plan.

In mid-November 2023, the Dutch Government surprisingly announced its plans to abandon the capacity reduction scheme, which meant that JetBlue could now potentially acquire the required slots to operate as of Summer 2024.

On the 5th of February 2024, the Commission issued a press release which concerned the inclusion of JetBlue in the Amsterdam-New York air services market. Currently, the Amsterdam-New York route is dominated by the Blue Skies Joint Venture (‘BSJV’), a joint enterprise between Air France -KLM (AF-KLM), Virgin Atlantic (Virgin), and Delta Air Lines (Delta). The Commission clarified that ‘the entry of a new competitor or the expansion of an existing competitor was necessary to remedy the distortive effects of the joint ventures’ on the Amsterdam-New York route. Therefore, JetBlue played a particularly important competitive role on this route. In the press release, the Commission explains that had JetBlue not secured slots, it could have adopted interim measures, without indicating what these interim measures would have consisted of and what the legal basis for their adoption would have been.

3. Commitment Decisions in the AF-KLM Merger and the Transatlantic Joint Venture

The competitive situation on the Amsterdam-New York route is rather complicated, as it has been subject to structural changes and cooperation between competitors that have resulted in various competition law commitments. These commitments were provided for, particularly, by AF-KLM during their merger, as well as in the antitrust case concerning the Transatlantic Joint Venture (‘TAJV’) that was formed between AF-KLM, Delta, and Alitalia, which is today succeeded by the BSJV.

Merger Agreement and its Commitments

The merger between Air France and KLM was subject to commitments (the ‘Merger Commitments’). In the Merger Commitments, both airlines agreed to make slots available in order ‘to allow a Prospective New Entrant to operate one new or additional Competitive Air Service on each of the Identified Long-Haul City-Pairs’. The Amsterdam-New York City pair enters within this definition. Under the Merger Commitments, a Competitive Air Service is defined as ‘a non-stop scheduled passenger air service which is operated daily (or in any case not less than six (6) times a week) on one or more of the Identified Long-Haul City Pairs’.

In this context, the parties would be required to free up slots in, for example, Amsterdam if a Prospective New Entrant wanted to acquire slots to operate on the abovementioned route but could not obtain the required slots through the general slot allocation process under Regulation (EEC) 95/93. In other words, if a new competitor wanted to access the Amsterdam-New York market but could not do so due to the lack of slots, then it could be upon AF-KLM to accommodate the request.

The Merger Commitments were unlimited in duration, but in November 2018, AF-KLM approached the Commission requesting the waiver of these commitments in respect of the Amsterdam-New York long-haul city pair. The Commission green-lighted the waiver (‘Waiver Decision’), noting that since the AF-KLM merger, no other competing airline had requested slots for the abovementioned route. The Commission further considered that the TAJV with AF-KLM, Delta, and Alitalia had been subject to an antitrust commitment decision. This decision provided for commitments on the Amsterdam-New York route, which were sufficient to tackle slot requests.

Transatlantic JV, the Antitrust Commitments, and the Blue Skies JV

The TAJV was formed in 2010 and was investigated by the Commission due to antitrust concerns. These concerns related to the cooperation between the joint venture parties, which included profit sharing, joint management of schedules, pricing, and capacity. The TAJV was liable to increase prices on the Amsterdam-New York route. The Commission was also concerned about the existing barriers to market access, particularly the lack of airport slots at Schiphol Airport. To alleviate the antitrust concerns, the joint venture parties offered commitments. The Commission, under Article 9 Regulation 1/2003, accepted the proposed commitments and decided to make the commitments legally binding (‘Antitrust Commitments’). Like the Merger Commitments, the parties to the joint venture offered to provide slots in Amsterdam to enable prospective competitors providing Competitive Air Services to operate flights on the Amsterdam-New York route. They would do so if the competitor could not acquire the necessary slots through the administrative slot allocation scheme. Competitive Air Services in the Antitrust Commitments is defined as a ‘scheduled passenger air transport service operated on an Identified City Pair on a non-stop basis’. This definition of the concept of Competitive Air Service in the Antitrust Commitments is broader than the same concept in the Merger Commitments. As has been confirmed by the Commission in the waiver of the Merger Commitments, the Antitrust Commitments are due to expire in (May) 2025.

In 2019, the TAJV was replaced by the BSJV, a collective enterprise between AF-KLM, Delta and Virgin Atlantic. Contrary to the TAJV, the BSJV was under the EUMR, given that the transaction also concerned the acquisition of 31% of joint control of Virgin Atlantic by AF-KLM. The decision on BSJV was related only to the acquisition of Virgin Atlantic shares. It explicitly excluded from its scope the relationship between AF-KLM and Delta, as this had been subject to the Antitrust Commitments (recital 13).

4. The Antitrust Commitments and a need for interim measures

The fact that the Commission stood ready to intervene with interim measures is interesting, given that, seemingly, there were commitments in place to ensure access to the Amsterdam-New York route for competitor airlines. Hence, why did the Commission consider it necessary to make use of interim measures? This is more interesting as the Commission scarcely makes use of this enforcement tool.

The slot commitments in the Merger Commitments and the Antitrust Commitments both allow prospective airlines that provide ‘Competitive Air Services’ to request the parties to the AF-KLM merger or the TAJV for

slots if the prospective airline would not be able to secure them through the administrative slot allocation scheme due to the lack of available slots, albeit that the Commission has waived the Merger Commitments in respect of the Amsterdam-New York route.

This has been the case with Norwegian, a low-cost carrier that started operations in the Amsterdam-New York market. According to the Waiver Decision, Norwegian failed to secure slots through the administrative allocation scheme and subsequently invoked the Antitrust Commitments, as its services fell within the definition of Competitive Air Services. These slots were made available by both KLM and Delta at Amsterdam and New York airports.

Since the Antitrust Commitments in 2015, ACNL has been issuing invitations to prospective airlines that can start flights between Amsterdam-New York, under the monitoring of a trustee appointed by the Commission. Interestingly, although the Antitrust Commitments have not been retracted by the Commission, these invitations stopped as of mid-2019 and the monitoring trustee has also taken down the procedure for the request of such slots on its website. This may explain why JetBlue did not rely on these commitments to request slots.

There is no indication as to whether JetBlue has requested Amsterdam-New York slots under the Antitrust Commitments. Yet, it is equally unclear why JetBlue would not have been able to secure slots for the IATA Summer 2024 under the Antitrust Commitments. One could hypothesize that (i) JetBlue may not have been eligible to request slots under the Antitrust Commitments, (ii) JetBlue was eligible, but AF-KLM refused to release slots based on the Antitrust Commitments, or (iii) the Antitrust Commitments were no longer in force.

Regarding the first hypothesis (i), the Commission’s readiness to impose interim measures, starting a new and separate antitrust procedure, may be explained by the fact that it considered that there was an antitrust issue because the Antitrust Commitments appeared to be inadequate. They did not allow competing carriers, such as JetBlue, sufficient access to the Amsterdam-New York route, which was exacerbated by the Dutch slot reduction plan. Concerning the second hypothesis (ii), the Commission may have wanted to opt for interim measures because it considered that enforcing the Antitrust Commitments against AF-KLM would take too long. Concerning the third hypothesis (iii), the replacement of TAJV with the BSJV could have meant that the Antitrust Commitments had ceased to apply as the TAJV no longer exists. This is how the DoT seems to understand the situation in the Antitrust Immunity (‘ATI’) decision for the BSJV. The decision explicitly provides that the previous ATI granted to the TAJV ceased to exist with the new, amended ATI granted to the BSJV. However, what obscures this is that the Antitrust Commitments do not seem to have been formally retracted by the Commission, which implies that they are still in force, i.e. they still bind the addressees of the commitment decision, including AF-KLM.

The second explanation also seems to be problematic as it implies that the Commission was not able to effectively and timely enforce the Antitrust Commitments on its own. The question will then be why the Commission was not able to enforce the commitments effectively. Regulation 1/2003 allows the Commission to impose fines and periodic penalty payments for non-compliance with antitrust commitments, as per Articles 25(2)(c) and 24(1)

(c). Whereas decisions to impose fines and fix the definitive penalty payment require a preceding Statement of Objections (‘SO’), whereas a decision imposing a periodic penalty does not. If expediency was the issue, the Commission could also have opted for enforcing the Antitrust Commitments by way of periodic penalties, as this would not have required it to hear the parties concerned, which is something it would have had to do if it were to impose interim measures under Regulation 1/2003.

5. Interim measures (?)!

Although the press release notes that the Commission ‘stood ready to intervene with interim measures’, it does not explain on what legal ground the Commission would have based the interim measures. Under EU competition law, the Commission can impose interim measures in mergers and in antitrust cases. Article 8(5) EUMR empowers the Commission to impose interim measures in merger cases where a concentration (i) has been implemented in contravention of the stand-still obligation, (ii) has been implemented in contravention of a commitment, or (iii) has already been implemented and is declared incompatible with the internal market. Under the EUMR the Commission may take a provisional decision imposing interim measures. It can order interim measures without hearing the undertakings concerned beforehand, provided they are heard as soon as possible after the decision (Article 18(2) EUMR). In the antitrust context, Article 8 Regulation 1/2003 entitles the Commission to order interim measures in cases of urgency due to the risk of serious and irreparable damage to competition where the Commission finds a prima facie infringement of Articles 101 or 102 TFEU. Interim measures in antitrust cases can only be ordered after the Commission has heard the parties concerned (i.e. following an SO, as per Article 27(1)).

The press release notes that the Commission found that the entry of a new competitor or the expansion of an existing competitor was necessary to remedy the distortive effects of the joint venture. Hence the need for interim measures. Moreover, the press release refers to the BSJV, which would indicate that the Commission was ready to impose interim measures based on the EUMR. However, it seems that the conditions for interim measures under the EUMR have not been met. For example, the BSJV was not cleared subject to merger commitments. The implementation of the concentration could therefore not have contravened any commitments.

The press release mentions the TAJV, which was subject to the Antitrust Commitments. However, if the Commission would have wanted to impose interim measures based on the TAJV, it could not have done so solely because AF-KLM was contravening the Antitrust Commitments — for example, because AF-KLM would not, contrary to the commitments, be willing to make available slots to JetBlue. Regulation 1/2003 arguably does not allow for this. Instead, the Commission would have had to make a case that the TAJV constitutes a prima facie infringement of the EU antitrust rules and that it could cause serious and irreparable harm to competition (absent interim measures).

The potential use of interim measures in an antitrust case is highly notable, as it remains rarely used. It had lain dormant for almost 20 years until the Broadcom case. Recently, however, there has been renewed interest in

interim measures. The Commission is currently reviewing Regulation 1/2003, assessing particularly whether this regulation allows for the effective use of interim measures.

The press release notes that the Commission stood ready to intervene with interim measures, suggesting that it was confident that it could impose interim measures promptly. This is notable, as it implies that the procedural framework for imposing interim measures does not prevent the Commission from intervening on very short notice. It has been argued, in the context of the review of Regulation 1/2003, that the procedural framework may be an important hindrance to the effective use of interim measures. Does this then dispel these doubts?

Regardless, would the Commission be empowered to order interim measures? Would the Commission have found a prima facie infringement of Article 101 TFEU? Was there urgency, i.e. serious and irreparable harm to competition? The press release seems to suggest that the Commission was convinced there was. It notes that ‘the Commission has actively and closely monitored the evolution of the market conditions at Amsterdam airport […] to identify any risk of serious and irreparable damage to competition for transatlantic traffic, in particular on the Amsterdam-New York route’ and that ‘JetBlue’s entry revived competition to the benefit of consumers’ but that ‘there was […] a risk that JetBlue would have had to discontinue its operations’.

However, the Antitrust Commitments complicate things. First, does the joint venture constitute a (prima facie) infringement of Article 101 TFEU considering the Antitrust Commitments? Based on the Antitrust Commitments, the parties to the joint venture must make available slots at Schiphol Airport to allow any carrier that can offer a Competitive Air Service to operate or increase up to seven new or additional round trips per week on the Amsterdam-New York route. Does this not ensure sufficient competition on the Amsterdam-New York route, despite the joint venture? Second, the Antitrust Commitments could make it less likely that the joint venture causes serious and irreparable harm to competition. They enable eligible carriers to request slots, opening the market for competitors. So, how could the joint venture seriously and irreparably harm competition if competitors were able to enter the market? As abovementioned, it could be that the Antitrust Commitments are no longer in force. Yet, there does not seem to be information publicly available indicating that the Antitrust Commitments have been formally retracted.

Therefore, one might wonder if the Commission – notwithstanding that it apparently ‘stood ready to intervene with interim measures’ – could have used interim measures.

6. Concluding Remarks

The fact that DG COMP stood ready to intervene with interim measures is highly notable for several reasons. It indicates a willingness to dust off the interim measures tool. However, it can be questioned whether interim measures were the correct enforcement tool in this case, given that there were existing commitments in place. But if interim measures were the right tool, does that not indicate a potential enforcement gap concerning commitments? This is because the Antitrust Commitments aimed to address the competitive issues on the

Amsterdam-New York route, but the Commission seems not to have been able to enforce them (in time). Lastly, the Schiphol slot-reduction saga seems to have been concluded through potential antitrust intervention. However, it should not be forgotten that this saga finds its origins in a state measure aimed at achieving environmental goals. Notwithstanding the ‘butterfly effects’ it created in the competition context, it may be questioned whether the slot reduction issue could not have been solved through other means more suitable to it. For example, instead of creating a (legal and procedural) competition law embroglio, the Dutch Government can be criticized for violating the Balanced Approach Regulation (EU) 598/2014, due to the failure to follow procedure before the adoption of reduction measures based on noise pollution.

Tuvana Aras is a Meijers PhD Candidate at the Europa Institute and the Institute of Air and Space Law at Leiden University (t.aras@law.leidenuniv.nl)

David van Wamel is a PhD Candidate at the Europa Institute at Leiden University and at Consumer Competition Market at KU Leuven (d.r.van.wamel@law.leidenuniv.nl)

SUGGESTED CITATION: Aras, T. and van Wamel, D.; “Beyond the Runway: Understanding Competition Law Impacts of Schiphol Slot Reduction”, EU Law Live, 05/03/2024, https://eulawlive.com/op-ed-beyond-the-runway-understanding-competition-law-impacts-of-schiphol-slot-reduction-bytuvana-aras-and-david-van-wamel/

Can defectively appointed judges enter into dialogue with the Court of Justice? – Maybe yes; and yet no

Paweł Filipek and Maciej Taborowski

1. Introduction

At the end of 2023 the Court of Justice rendered a ruling in C-718/21 Krajowa Rada Sądownictwa (Continuation of judicial functions). In the judgment, requested by the Chamber of Extraordinary Control and Public Affairs (‘CECPA’) of the Polish Supreme Court, the Court held that the CECPA is not an independent and impartial court established by law, and therefore declared its request for a preliminary ruling inadmissible. This is an important case. That is because, first, the Court of Justice has rebutted its own presumption made in C-132/20 Getin Noble Bank that the referring court meets the criteria of Article 267 TFEU regardless of its actual composition (point 2). Secondly, although it had earlier occasions to do so, in C-718/21 Krajowa Rada Sądownictwa the Court of Justice has for the first time conducted its own assessment of the status of that Chamber and reached a negative conclusion (point 3). As a result of that ruling, under Union law, the Chamber no longer has, at that very moment, the capacity to adjudicate in the areas covered by EU law (point 4), although it continues to exist and adjudicate, which makes it increasingly complicated to rectify the deficiencies in the appointment of judges to that Chamber and to determine the legal effects of the decisions delivered by them so far (point 5).

2. Getin Noble Bank presumption and the Union standard

of judicial independence

In C-132/20 Getin Noble Bank, the Court of Justice – while recalling that the referring body must be an independent court established by law – refused to make an assessment of the status of the judge constituting the referring court. Instead, the Court of Justice adopted a highly formalistic presumption that a national court satisfies the requirements of a ‘court’ irrespective of its actual personal composition; a presumption which, in principle, could only be rebutted by a final national or international judicial decision (cf. paras. 69 and 72). Accordingly, in Getin Noble Bank, the Court declared admissible the questions referred by a single-judge formation of the Supreme Court composed of a person appointed to the judicial post in a manifest breach of the law in a procedure that did not ensure an objective choice of candidates and was marked by undue influence of political power. Yet, such procedure, in the eyes of the ECtHR, deprived the body of the status of a court (see Reczkowicz v. Poland, judgment of 22 July 2021; Dolińska-Ficek and Ozimek v. Poland, judgment of 8 November 2021; Advance Pharma v. Poland, judgment of 3 February 2022). A highly formalistic approach by the Court of Justice gave rise to concerns that, in seeking to preserve judicial dialogue with defective national judges for the sake of effectiveness of EU law, the Court was doing so at the expense of the standards of the rule of law and guarantees of judicial independence for it differentiated between ‘courts’ within the meaning of Article 267 TFEU – for the purposes

of the preliminary ruling procedure; and the ‘courts’ within the meaning of Article 19 TEU (Article 47 of the Charter) – for courts deciding cases with a Union law element.

In C-718/21 Krajowa Rada Sądownictwa, we find affirmation that the substantive criteria for judicial independence, in the eyes of the Court, are to be the same under the Union’s principle of effective judicial protection (Article 19(1)(2) TEU and Article 47 Charter) as under the right of a national body to make a reference under Article 267 TFEU. Indeed, the independence of the CECPA is assessed by the Court of Justice against the standards it has expounded on the basis of Article 19 TEU (see para. 46). What leads to a different standard, however, is the incorporation into Article 267 TFEU of a presumption which excludes the assessment of the composition of the referring authority until a final judicial decision establishing that it is defective has been made.

3. The Assessment of CECPA

The Court of Justice refrained from a direct assessment of judicial status of CECPA in the infringement case C-204/21 Commission v Poland concerning the ‘Muzzle Law’, while in Case C-487/19 W.Ż., having pointed to suggestions and criteria for an evaluation, the CJEU left the assessment of CECPA’s status to the national court. That has not been done so to date, since in the meantime, the judicial panel before which the case was pending has been changed and ‘captured’ by new defective appointees to the Supreme Court. In C-718/21 Krajowa Rada Sądownictwa, the Court carried out that assessment for the first time in the context of checking the admissibility of the national reference for a preliminary ruling under Article 267 TFEU made by a Supreme Court panel comprising defectively appointed persons.

In its assessment, the Court of Justice relied primarily on the ECtHR judgment in the Dolińska-Ficek and Ozimek case, in which the Strasbourg Court held that the panel – specifically, of the CECPA – does not have the status of a court within the meaning of Article 6(1) of the ECHR, and for it to rule on an individual case constitutes a violation of the right to a fair trial. The Court invoked also the judgment of the Polish Supreme Administrative Court of 21 September 2021 overturning the resolution of the new NCJ recommending candidates for the CECPA in 2018. Most importantly, however, the Court of Justice conducted its own assessment of the circumstances of the appointment of persons to the CECPA, while it clearly refused to undertake similar assessment earlier in Getin Noble Bank hiding itself behind the newly construed presumption.

Thus, if the Court in C-718/21 Krajowa Rada Sądownictwa considered itself competent to assess the regularity of the appointment of the judges comprising the referring body, it could have made such an assessment also in its earlier judgment. Then, by contrast, it hid behind the formula of requiring an already existing final decision of another court (national or international), thus renouncing the autonomous exercise of its power to check if the requesting body meets the Treaty criteria. On the other hand, in C-718/21 Krajowa Rada Sądownictwa, the Court did not confine itself to merely invoking the ECtHR’s final judgment finding that the CECPA lacked the attributes of a court but made its own determination. It reaffirmed the conclusions of the Strasbourg Court. But since the Court of Justice, despite the final judgment of the ECtHR, makes its own assessment, it cannot be

excluded that it will not be identical to the Strasbourg assessment. Could then same body be deemed not to be a court under Article 6 ECHR, and yet to be a court under Union law? Indeed, in result of the Court’s stance in Getin Noble Bank, the body which had not been a court within the meaning of the ECHR was recognised as a court for the purposes of the preliminary ruling procedure.

4. Incapacity to adjudicate on Union law

In the light of the judgment in C-718/21 Krajowa Rada Sądownictwa, the formation of the CECPA that referred questions to the Court of Justice, does not meet the requirements of Union law, its reference is inadmissible, thus it cannot participate in judicial dialogue with the Court. As a consequence, indeed, the CECPA’s formation cannot rule at all on matters with a Union law element, as they can only be decided by a body which meet the conditions to be a court and the requirements of effective judicial protection. Accordingly, all judicial decisions made by it are defective. Meanwhile, the jurisdiction of this Chamber covers adjudication, inter alia, in cases of: protection of competition, consumers and unfair contractual advantage practices; public tenders; regulation of energy, telecommunications and postal services, or rail transport.

Yet, there are at least two pertinent questions that arise. First, does the Court’s judgment apply only to this CECPA formation which made the very reference, or to the Chamber as a whole, i.e., all its formations. Second, as a matter of Union law, are the defective decisions of the CECPA those made after the date of the Court’s ruling, or equally the earlier ones, made before the ruling?

Formally, a decision of the Court on the inadmissibility of a reference due to the defective composition of the body applies to the particular body (formation) which made the reference. However, the circumstances that gave rise to finding deficiency in the appointment of members of the referring body to the Supreme Court did not only relate to those who had submitted questions in C-718/21 Krajowa Rada Sądownictwa. The CECPA was set up in 2018 and entirely staffed by persons appointed under a new procedure incompatible with the requirements of judicial independence. An identical assessment would therefore be made of the admissibility of references submitted by formations composed of persons appointed to the Supreme Court in the same manner.

Such a view seems to be supported by the Court in C-718/21 Krajowa Rada Sądownictwa. The Court states that it is nevertheless clear from the grounds of the Dolińska-Ficek and Ozimek judgment that the assessments made by the ECtHR apply without distinction to all the judges of the CECPA who were appointed to it in similar circumstances (para. 53). The Court of Justice states also that the CECPA, which has been created ex nihilo within the Polish Supreme Court, and is composed entirely of judges appointed in a defective way, has jurisdiction over particularly sensitive matters, such as electoral disputes and proceedings relating to the holding of referendums, other cases governed by public law, in particular those listed in that provision, and extraordinary appeals enabling final decisions of the ordinary courts or other Chambers of Supreme Court to be set aside.

Furthermore, in C-718/21 Krajowa Rada Sądownictwa, the Court only ruled on a preliminary reference from the formation of the CECPA. However, similar to the Dolińska-Ficek and Ozimek case, the ECtHR judgments have

been made in relation to other defective appointees to the Supreme Court, in Reczkowicz – in relation to those sitting in the Disciplinary Chamber, in Advance Pharma – in relation to those of the Civil Chamber. The recent Court ruling may therefore imply that any reference for a preliminary ruling made by the Supreme Court in a formation involving persons appointed to it in manifest breach of the law will be inadmissible.

5. A need to rectify CECPA

Flawed rulings issued by defective appointees, whose nomination process was in breach of Article 6(1) ECHR, Article 19(1) TEU or Article 47 CFR, may give rise to various problems for the legal system of a Member State in the context of inter alia the preliminary ruling procedure, the damages liability, the legal ineffectiveness of flawed judicial decisions (W.Ż.), the possible need of their revocation, the possibility of finding a violation of the ECHR by the Strasbourg Court or from the perspective of infringement proceedings under Article 258 TFEU. In effect, decisions of defective appointees may pose an issue concerning legal certainty. Potentially, judicial decisions of defective appointees may also cause difficulties in cross-border cooperation in criminal or civil matters since there may be problems with their recognition and enforcement.

All that seems to be also a valid reason for the need to cure the defective judicial appointments. Therefore, a judicial reform, after the rule of law crisis is over, cannot be limited to excluding from the judiciary only those defective appointees who most blatantly violated EU values. The problem of defective appointees is much broader then that: should defective appointments remain unresolved, they will keep generating flawed judicial decisions, liable to be challenged. The key problem with the status of defective appointees concerns their nomination process. Here, the irregularities once made, will not by themselves be cured over time. No change regarding defective judicial appointments means more and more flawed judicial decisions. That may expose taxpayers to the need e.g., to pay compensation according to EU law or just satisfaction under the ECHR and will also contribute to wide-spread legal uncertainty within the Polish jurisdiction for Union citizens and investors.

6. Conclusions

The CECPA is not a ‘court’ and all rulings coming from it are inherently defective. That was already clear when – following the Court’s 2019 ruling in A.K. and Others – the ‘old’ judges of the Supreme Court issued a historical resolution of 23 January 2020 adopted jointly by the Civil Chamber, the Criminal Chamber and the Chamber of Labour and Social Security. It was already apparent from this resolution that all judgments issued by the panels of the CECPA are made under conditions of nullity and are likely to be overturned in the future. After C-718/21 Krajowa Rada Sądownictwa we know that already more than half of judges of the Polish Supreme Court fail to guarantee the required independence and lack the status authorising them to request preliminary rulings from the Court. It was only the presumption, created by the Court in C-132/20 Getin Noble Bank that could possibly shield the Polish and the EU legal systems, from the immense consequences for the full effectiveness of Union law of breaking the important link between the Court of Justice and the national court of last instance. However, the case C-718/21 Krajowa Rada Sądownictwa shows that this thin line of protection is also starting to break down.

Meanwhile, the CECPA still remains part of the Supreme Court and may remain part of Poland’s fractured legal and judicial system for a considerable time ahead, in the lack of the willingness to change the situation by the President of the Republic, tied to the previous ruling majority responsible for the decline in the rule of law in Poland, and equipped with the right of legislative veto and the continued operation of the Constitutional Tribunal, whose staffing was decided entirely by the same previous ruling majority.

Maciej Taborowski is Professor at the Institute of Law Studies of the Polish Academy of Sciences, Member of the Good Lobby Profs and former Deputy Ombudsman of the Republic of Poland (2019-2022).

Paweł Filipek is Assistant Professor at the Institute of Law Studies of the Polish Academy of Sciences. Both authors were representing the Ombudsman in rule of law cases before the Court of Justice, the ECtHR and the Polish Constitutional Tribunal.

SUGGESTED CITATION: Taborowski , M. and Filipek, P.; “Can defectively appointed judges enter into dialogue with the Court of Justice? – Maybe yes; and yet no”, EU Law Live, 07/03/2024, https://eulawlive.com/op-ed-can-defectively-appointed-judges-enter-into-dialogue-with-the-court-of-justicemaybe-yes-and-yet-no-by-pawel-filipek-and-maciej-taborowski/

Blanket ban on leave compensation in the event of voluntary early retirement and employee’s burden of proof for reasons for prior non-utilisation violate EU law (Case C-218/22)

Dominik Leist

On 18 January 2024, the Court of Justice further refined its extensive case law on the minimum annual leave entitlement in its ruling in Case C-218/22, BU v Comune di Copertino. A blanket ban on leave pay in lieu is also in breach of EU law if it is provided for in the event that the employee terminates the employment relationship at their own request and has not proven that they did not take the leave during the employment relationship for reasons for which they are not responsible. The decision is in line with previous case law and is convincing.

I. Underlying facts

The decision is based on a request for a preliminary ruling from the Italian Tribunale di Lecce, which asked the Court of Justice to interpret Article 7 of Directive 2003/88/EC and Article 31(2) of the EU-CFR. The underlying court proceedings centred on an employee who had worked in the public sector for many years and voluntarily left the company in October 2016 to take early retirement. Up to this point, he was still entitled to 79 days of leave, which he had earned in the period from 2013 to 2016 in the form of the statutory minimum leave and for which he was now demanding financial compensation.

However, this claim was opposed by Art. 5(8) of the Italian ‘Decree-Law No 95 laying down urgent provisions for the revision of public expenditure with no change in services to citizens and measures to strengthen the capital base of companies in the banking sector’, which was applicable to the employment relationship. This regulation stipulates, among other things, that leave, rest days and other leave entitlements of employees in the public sector do not lead to the payment of financial compensation under any circumstances. In an earlier decision, the Italian Corte costituzionale had considered the regulation, which served to curb public expenditure, to be compatible with EU law. However, the referring court had doubts as to its compatibility with Article 7 of Directive 2003/88/EC and Article 31(2) of the EU-CFR. It therefore referred the following questions to the Court of Justice:

(1) Should Article 7 of Directive 2003/88/EC and Article 31(2) of the Charter of Fundamental Rights of the European Union be interpreted as precluding national legislation, such as that at issue in the main proceedings (namely Article 5(8) of Decree-Law No 95), which, for reasons of public expenditure containment and organisational requirements of the public sector as employer, does not permit the monetisation of leave in the event that an employee in the public service resigns?

(2) If the answer [to the first question] is in the affirmative, must Article 7 of Directive 2003/88/EC and Article 31(2) of the Charter be interpreted as requiring the employee in the public service to demonstrate that it was impossible for him/her to take the leave concerned in the course of the employment relationship?

II. Decision of the Court of Justice

The Court summarised the two questions referred into a single question and came to the conclusion that a provision such as the one submitted was incompatible with EU law. The Court derived this solution almost entirely from its previous leave case law, which it first outlined in broad terms and then specified in the context of its application to the question referred.

a) Reference to and confirmation of previous leave case law

Firstly, the Court reaffirms that the right of employees to paid annual leave constitutes a particularly important principle of EU social law from which no derogation is permitted and which the competent national authorities may implement only within the limits expressly laid down in Directive 2003/88/EC itself (Comune di Copertino (C-218/22, para. 25); Max-Planck-Gesellschaft zur Förderung der Wissenschaften (C-684/16, para. 19)). The right to annual leave itself is only one of the two aspects of the right to paid annual leave enshrined as a fundamental right under EU social law, which also includes a right to payment (Comune di Copertino (C-218/22, para. 30); Maschek (C-341/15, para. 28); job-medium (C-233/20, para. 32)).

Since it is no longer possible to actually take the leave upon termination of the employment relationship, but complete withholding of the entitlement must be avoided, the right to paid annual leave also includes the employee’s entitlement to financial compensation for the days of leave not yet taken upon termination of the employment relationship. The accrual of this entitlement, as set out in Article 7(2) of Directive 2003/88/EC, only requires the termination of the employment relationship and the existence of leave entitlements at that time (Comune di Copertino (C-218/22, para. 31); Max-Planck-Gesellschaft zur Förderung der Wissenschaften (C-684/16, para. 23)). Since the claim arises directly from the directive, it cannot be made dependent on further conditions (Comune di Copertino (C-218/22, para. 31); Kreuziger (C-619/16, para. 22)).

However, Article 7 of the Directive does not generally preclude national provisions according to which the employee could also lose his minimum leave entitlement after the end of the reference period or a carry-over period. The same applies to a claim for compensation after termination of the contract (Comune die Copertino (C-218/22, para. 39)). The prerequisite for a loss of entitlement that is compatible with the Directive, however, is that the employee actually had the opportunity to exercise the entitlement conferred on him by the Directive beforehand (Comune di Copertino (C-218/22, para. 35); Max-Planck-Gesellschaft zur Förderung der Wissenschaften (C-684/16, para. 35)).

b) Art. 5(8) of Decree-Law No 95 as a restriction of the right to paid annual leave

The Court then applied these principles to the constellation presented to it. Firstly, the Court saw a restriction of the right to paid annual leave in Art. 5 para. 8 of Decree-Law No. 95. This already resulted from the fact that, according to the Italian regulation, the employee was not entitled to financial compensation for the days of leave not taken solely because he terminated the employment relationship at his own request in order to take early retirement (Comune di Copertino (C-218/22, para. 37, 40, 41)). The absence of a voluntary termination of the employment relationship therefore constituted a condition for the entitlement to leave compensation that was not provided for in the Directive (Comune di Copertino (C-218/22, para. 41)). In the Court’s view, the fact that the employee was able to foresee his retirement and therefore take it into account when planning his leave did not argue against the assumption of a restriction of the right to paid annual leave. This appears consistent, as the Court of Justice had already ruled in several decisions that the reason for the termination of the employment relationship was not relevant with regard to the right to financial compensation under Art. 7 (2) of the Directive and that this also expressly related to voluntary terminations (Maschek (C-341/15, para. 28); job-medium (C-233/20, para. 32)).

c) Discussion of the objectives pursued with the restriction

In contrast to the last comparable decision (job-medium (C-233/20)), the Court then goes on to examine whether the restriction of the entitlement to paid annual leave is in conformity with EU law. Due to the fact that the entitlement is determined by fundamental rights, this is examined on the basis of the requirements of Art. 52(1) EU-CFR. The Court’s assessment of the objectives pursued by the restrictive provision is revealing. With regard to the objective of controlling public expenditure, the Court convincingly states that, according to the fourth recital of Directive 2003/88/EC, the effective protection of safety and workers’ health pursued by the leave requirements must not be subordinated to purely economic considerations (Comune di Copertino (C-218/22, para. 45)). This corresponds to the basic assessment that the Court of Justice had already made in the CCOO decision with regard to working time regulations (CCOO (C-55/18, para. 66); see Klein/Leist, Zeitschrift für Europäisches Sozial- und Arbeitsrecht 2019, p. 365). With regard to the objective of taking into account the organisational requirements of the public employer, the Court acknowledges that this should also encourage employees to take their leave regularly. This corresponds to the priority of actual utilisation over financial remuneration provided for under EU law. However, the objectives pursued were not relevant to the outcome, as Article 5(8) of Decree-Law No 95 was in any case contrary to EU law for another reason.

d) Breach of the employer’s duty of care to allow the employee actually to take the paid annual leave

The decisive factor was the principle arising from Art. 7 of Directive 2003/88/EC and Art. 31(2) EU-CFR that an acquired minimum leave entitlement cannot be lost if the employee was unable to take his leave (Comune di Copertino (C-218/22, para 47); Max Planck Society for the Advancement of Science (C-684/16, para 54)). In that regard, the entitlement can only lapse if the employee has not taken their paid annual leave of their own free will

and in full knowledge of the consequences of not doing so after they have been put in a position to actually take the paid annual leave. This presupposes that the employer requests the employee –formally if necessary– to take his paid leave and informs him clearly and in good time that the leave entitlement will expire at the end of the reference period or a permissible carry-over period if he does not take it. The burden of proof for this lies with the employer (Comune di Copertino (C-218/22, para. 49); Max Planck Society for the Advancement of Science (C-684/16, para. 45)).

In applying these principles to the question referred for a preliminary ruling, the Court first notes that the case law originally developed with regard to the loss of leave entitlements in the current employment relationship also applies to the right to compensation upon termination of the employment relationship (Comune di Copertino (C218/22, para. 50)). However, the requirements applicable here were not fulfilled, which resulted in particular from the fact that the Italian prohibition of compensation also covered the annual leave entitlement that only arose in the year of termination (Comune di Copertino (C-218/22, para. 51)). Insofar as the question referred was also aimed at a constellation in which the employee had to prove that he was unable to take the leave before the end of the employment relationship for reasons beyond his control, the Court implicitly rejected this by emphasising the employer’s burden of proof for compliance with its duty to cooperate.

III. Opinion

The decision is consistent with the Court’s previous leave case law and is therefore hardly surprising (see Pelke, Betriebs-Berater 2024, p. 243; Arnold, ArbRAktuell 2024, p. 89).

It contains four central judgements: Firstly, the right to paid annual leave cannot be subordinated to purely economic considerations. Secondly, the case law that can now be regarded as established, according to which the accrual of a right to compensation under Art. 7(2) of Directive 2003/88 EC does not depend on the type of termination of the employment relationship, also applies to cases of voluntary early retirement. Thirdly, even in the event of voluntary termination of the employment relationship by the employee for the purpose of early retirement, both the original leave entitlement and the entitlement to compensation arising upon termination of the employment relationship can only be extinguished if the employer has previously fulfilled its obligations under EU law to cooperate. Fourthly, the employer bears the burden of proof for compliance with the obligations to cooperate, which cannot be circumvented in practice by requiring the employee to provide evidence of reasons for not taking the leave that are not attributable to the employee.

All four assessments are convincing. The fact that the right to paid annual leave cannot be subordinated to purely economic considerations is consistent, as this is also primarily aimed at health protection - like the rest period regulations, for which the Court has already made this assesment. The same applies to the consistent application of the principles on the obligation to cooperate to the constellation submitted, as it cannot be automatically concluded from a voluntary termination of the employment relationship in favour of early retirement that the employee could have easily realised their leave entitlements beforehand. On the contrary, a provision such as

the one in the original case could create a false incentive for employers to act contrary to the priority of actually granting leave, which is laid down in Union law, especially in the case of older employees who are therefore particularly in need of health protection, since leave after termination of the employment relationship would in any case be subject to a prohibition on compensation. The assessment that the employee must in any case be entitled to financial compensation for any remaining leave upon termination of the employment relationship if the employer cannot prove that it has fulfilled its obligations to cooperate in the granting of regular leave is therefore also convincing in the case of voluntary early termination of the employment relationship for the purpose of early retirement. The Court of Justice therefore rightly saw no reason to establish an exception to this principle.

By contrast, a burden of proof on the part of the employee for the lack of opportunity to take leave in advance, as was laid down in the second question referred, would precisely undermine the protection provided by EU law in the form of the employer’s duty to enable the employee actually to take the paid annual leave to which he or she is entitled. It is therefore also convincing that the Court instead emphasises the employer’s burden of proof with regard to its duties to inform and cooperate, the breach of which precludes the loss of leave entitlements.

Dominik Leist is a research assistant at the Institute for Labour Law and Industrial Relations in the European Union (IAAEU) in Trier and a legal trainee at the Trier Regional Court. He is the author of numerous publications, in particular on labour law under the influence of European law, and a contributor to the IAAEU’s labour law podcast.

SUGGESTED CITATION: Leist, D.; “Blanket ban on leave compensation in the event of voluntary early retirement and employee’s burden of proof for reasons for prior non-utilisation violate EU law (Case C-218/22”, EU Law Live, https://eulawlive.com/op-ed-blanket-ban-on-leave-compensation-in-theevent-of-voluntary-early-retirement-and-employees-burden-of-proof-for-reasons-for-prior-non-utilisation-violate-eu-law-case-c-218-22/

With or without prejudice to the Geneva Convention? Refugees sur places as a result of subsequent circumstances determined by the applicant (Case C-222/22)

Giulia Raimondo and Silvia Rizzuto

Introduction

In Case C-222/22 Bundesamt für Fremdenwesen und Asyl (Conversion religieuse ultérieure), the Court of Justice of the European Union (‘the Court of Justice’ or ‘the Court’) held that Directive 2011/95/EU (Qualification Directive) precludes a presumption that any subsequent application based on a risk of persecution arising from circumstances which the applicants created by their decision since leaving their country of origin is abusive and therefore prevents the granting of international protection.

The facts

The case originates from proceedings before the Federal Administrative Court of Austria regarding granting refugee status to an Iranian individual who converted to Christianity in Austria. The Federal Office for Immigration and Asylum (BFA) contests this decision, arguing that the applicant created the risk of persecution upon return to Iran by converting to Christianity while in Austria. The BFA underlines that under national law, refugee status cannot be granted in such cases unless the activities in question are authorised in Austria and reflect a pre-existing conviction held by the applicant in their country of origin.

The Administrative Court whether Article 5(3) of the Qualification Directive precludes legislation under which foreign nationals filing subsequent applications are normally denied asylum if their well-founded fear of persecution is based on circumstances they have created by their own decision since leaving their country of origin.

The national legislation in question recognises the need for international protection arising sur place under two cumulative conditions. Namely, when the risk of persecution originates from activities that are permitted in the Member State, and it is established that those activities constitute the expression and continuation of convictions held by the applicant in the country of origin. The referring court thus asked the Court of Justice whether these two conditions were in line with the Qualification Directive.

The Law: Qualification Directive and Assessments of International Protection sur place

In this case, Article 5 of the Qualification Directive provides a common definition of applications based on international protection needs arising sur place, that is, after refugees have left their country of origin. Notably, Article 5(2) of the Qualification Directive provides that: ‘A well-founded fear of being persecuted or a real risk

of suffering serious harm may be based on activities which the applicant has engaged in since he or she left the country of origin, in particular where it is established that the activities relied upon constitute the expression and continuation of convictions or orientations held in the country of origin’.

The same provision in the subsequent paragraph adds a significant exception:

‘Without prejudice to the Geneva Convention, Member States may determine that an applicant who files a subsequent application shall not normally be granted refugee status if the risk of persecution is based on circumstances which the applicant has created by his or her own decision since leaving the country of origin’ (Article 5(3), emphasis added).

The decision

As highlighted by UNHCR in its amicus curiae, in transposing the Qualification Directive into their national legislation, the Austrian legislator merged elements of Article 5(2) and 5(3) of the Qualification Directive by requiring that, to grant asylum, the activities should constitute the continuation of previously held convictions. In addition, it also took a restrictive application of the exception established in Article 5(3) by taking a discretionary measure (Article 5(3) uses ‘may’) and making it an obligation (Article 3(2) of AsylG 2005 uses ‘shall’). According to the Austrian and German Governments intervening in the proceedings, this would have implied the automatic disregard of any subsequent application (para. 36).

In line with the Opinion of the Advocate General (AG) Richard de la Tour, the Court considered that the exception of Article 5(3) to the general rule established in Article 5 (1 and 2) of the Qualification Directive must be interpreted restrictively and applied with caution (para. 29; AG Opinion points 54 and 59). The Court further recalled that Article 4(3) of the Qualification Directive requires the competent national authority to carry out a complete examination of all the circumstances specific to the individual case of the applicant. Hence, any form of automatism would amount to depriving this provision of its effet utility (para. 37).

In casu, the competent authority has established the applicant’s general credibility and has accepted not only the sincerity of his religious conversion, but also the existence of a well-founded fear of persecution in the event of his return to his country of origin. If confirmed, which is up to the referring court, this finding would exclude any abusive intention or instrumentalisation of the procedure, hence leading to the inapplicability of Article 5(3). Conditioning the recognition of protection needs arising sur place to the continuation of convictions already held in the country of origin would result in the deprivation of refugee status on the sole ground that a person converted after the adoption of the final decision on his previous application (AG Opinion, point 72).

Article 5(3) of the Qualification Directive in light of the Geneva Convention?

At the same time, the Court also recognised that where, following an individual assessment, the risk of persecution invoked in support of a subsequent application is based on the applicant’s abusive and manipulative intention, Article 5(3) of the Qualification Directive allows Member States to refuse refugee status, within the meaning of

Article 2(e) of the Directive, even if they would otherwise qualify as a refugee under the 1951 Convention relating to the Status of Refugees (Geneva Convention) and Article 2(d) of that Directive (para. 40).

It is worth noting that the exception provided for under Article 5(3) is ‘[w]ithout prejudice to the Geneva Convention’. This was emphasised by the Austrian and German governments intervening in the proceedings, as they submitted that this phrase in German would generally mean ‘regardless’ (para. 41). The Court replied that the wording used in one of the linguistic versions of a provision of Union law cannot serve as the sole basis for its interpretation, and other linguistic versions of this provision transpose the same expression as meaning that Member States must take into account the provisions of the Geneva Convention. Beyond these observations, it must also be recalled that under Article 78(1) TFEU, the Union is obliged to interpret its common policy on asylum and immigration in accordance with the Geneva Convention, ‘the cornerstone of the international legal regime for the protection of refugees’ (recital 4, Qualification Directive).

In this respect, the Geneva Convention includes no requirement that refugees must have left their country of origin on account of a well-founded fear of persecution, nor that their asylum claims sur place should be assessed based on their intentions or motivations (UNHRC Handbook, paras 94-96). The Geneva Convention protects those who are at risk of persecution at the time of the assessment, irrespective of whether the risk of persecution originates from the applicants’ previously held convictions or conduct. In this respect, what is relevant is the credibility of the applicant. As UNHCR observed, ‘once the credibility of the applicant has been established following a rigorous assessment, the recognition of the refugee status depends on the existence of a well-founded fear of persecution, regardless of whether the risk of ill-treatment was created by the applicant’s own activities’ (UNHCR, para 4.2.10; see also ECtHR, F.G v Sweden, paras 114-115). Yet this credibility assessment is somewhat different from that prescribed by the Qualification Directive and therefore implied by the AG and the Court. It is not so much about the personal credibility of the applicant’s good faith (see here), but about the reasonableness of their fear of being persecuted upon return (Goodwin-Gill and McAdam at 82-86).

The Convention itself provides exhaustively listed exclusion clauses to exclude international protection, and it is essential that such clauses be interpreted restrictively. Therefore, there is no basis for excluding applicants at risk of persecution, even in cases where the circumstances were determined by the applicant itself after leaving its country of origin. It would seem reasonable to conclude, in accordance with the UNHCR and consistent jurisprudence ( see C-349/20 para 50, C-621/21 para. 60, and C-151/22 para. 49), the Geneva Convention does not require applicants whose well-founded fear of persecution arises sur place that their asylum request was submitted in good faith. In fact, the very logic of the Convention starts from the premise that once the requirements of Article 1(A) (2) are satisfied, refugee status should be recognised, with no special substantive or procedural limitation (see Hathaway and Foster, 79-90). It is rather the task of national authorities to assess whether the activities conducted by the applicant would expose them to persecution or serious harm upon return to their country. Hence, the focus should be on the consequences rather than on the triggering cause.

Be that as it may, the Court could probably not offer an interpretation contra (EU) legem. It certainly strived to interpret the Qualification Directive in line with the Geneva Convention and the principle of non-refoulement but with limited results (para. 44). The Court clarified to what extent national legislation that prevents a subsequent asylum application is compatible with the Qualification Directive. However, it would have also faced the opportunity to clarify once again the scope of EU law and Article 78(1) TFEU, which states that a common policy on asylum, subsidiary protection and temporary protection ‘shall be in accordance with the Geneva Convention’. In the case at hand, it would not be relevant to establish whether the religious conversion occurred out of genuine belief or with abusive intent, as what should be concretely evaluated is the objective risk of facing persecution in one’s country of origin, which entitles individuals to protection. Instead, the Court ruled that the Qualification Directive does not allow a presumption that any subsequent application based on circumstances created by the applicant stems from an abusive intention to circumvent the procedure for granting international protection. According to the Court, each subsequent application must be assessed on an individual basis by the Member States’ competent authorities in order to avoid the risk of manipulation by bad-faith asylum seekers.

Conclusions

Overall, the Court of Justice has aligned itself with the still-growing number of national courts and authorities that are adding a requirement of good faith to sur place claims. However, as explained above, this is not in line with the rationale of the Geneva Convention. In our view, a better approach would have been one based on Article 78 of the TFEU, and thus on the Geneva Convention, which provides that asylum claims, even those stemming from manipulative actions abroad, should be evaluated based on a well-founded fear of persecution and the usual criteria established by the Convention itself.

Giulia Raimondo is a Postdoctoral Researcher at the University of Luxembourg, Faculty of Law, Economics and Finance and a member of the ILA Committee on International Migration and International Law, giulia.raimondo@uni.lu

Silvia Rizzuto is a PhD Researcher in EU Law at the University of Luxembourg, Faculty of Law Economics and Finance, and at Alma Mater Studiorum University of Bologna (cotutelle de thèse), silvia.rizzutoferruzza@uni.lu

SUGGESTED CITATION: Raimondo, G. and Rizzuto, S.; “With or without prejudice to the Geneva Convention? Refugees sur places as a result of subsequent circumstances determined by the applicant (Case C-222/22)”, EU Law Live, 08/03/2024, https://eulawlive.com/op-ed-with-or-withoutprejudice-to-the-geneva-convention-refugees-sur-places-as-a-result-of-subsequent-circumstances-determined-by-the-applicant-case-c%e2%80%9122222-by-gi/

The Effectiveness of Directives in Horizontal Situations: the Charter Unchained? (K.L.

v. X)

Fien Van Reempts

Introduction

On 20 February 2024, the Court of Justice in K.L. v. X (C-715/20) held that Article 47 of the Charter may be invoked in conjunction with Directive 1999/70 in a dispute between private individuals in order to disapply national legislation contravening that directive.

While the possibility of relying on Charter provisions in combination with a directive in order to generate the disapplication of national legislation contravening that directive is nothing new, the modalities of doing so in K.L. v. X might appear to be. This is the case in as far as this possibility is confirmed for (i) Article 47 of the Charter, independently, that is to say without reference to another provision of the Charter; and (ii) in combination with a directive which does not concretise a right enshrined in the Charter.

Are these developments truly novel, unchaining the use of the Charter in horizontal situations in order to render directives effective in horizontal situations from previous constraints thereon, or were these constraints never in place to begin with?

The effectiveness of directives in horizontal situations: of doors and windows

It is well-established that directives lack horizontal direct effect, as first affirmed in Marshall (152/84). Most recently, the scope of the prohibition on the horizontal direct effect of directives was clarified in Popławski II (C573/17), excluding the possibility for directives to be relied upon in horizontal situations for both purposes of exclusion (disapplication of the contravening national legislation), as well as for substitution (direct reliance on the directive).

However, when the Court closes a door, it might be wise to check whether there has not been any window left on a latch. Enter the (in)famous judgment of the Court in Mangold (C-144/04), where the Court recognised the possibility for individuals to rely on the horizontally directly effective general principle of non-discrimination, in order to enable the disapplication of national legislation contravening a directive giving concrete expression to that general principle, as later clarified in Kücükdeveci (C-555/07). In Egenberger (C-414/16), the Court extended this reasoning to the Charter, rendering it possible for an individual to rely on horizontally directly effective provisions of the Charter, in order to enable the disapplication of national legislation contravening a directive displaying an intrinsic link to the Charter right at stake. This kind of effectiveness of the Charter has gradually unfolded, with the Court recognising only a few provisions of the Charter capable of horizontal direct effect and

only having occurred where an intrinsic link could be established between the relevant Directive provision and the Charter right.

The judgment of the Court of Justice

In K.L. v. X, the Court addressed whether Polish national legislation, in requiring a statement of reasons at the termination of a contract only for contracts of indefinite nature, was incompatible with clause 4 of the framework agreement on fixed-term work annexed to Directive 1999/70, laying down a prohibition to discriminate between fixed-term workers and comparable permanent workers in respect of employment conditions, and if so, what the consequences of such incompatibility would entail in the context of a horizontal dispute.

The Court first determined that the national legislation at issue is incompatible with Directive 1999/70 by not requiring a statement of reasons for the termination of fixed-term contracts to be given by the employer, while such a statement is required for permanent workers, thereby depriving fixed-term workers of crucial information for assessing the justifiability of the dismissal, thereby restricting their access to legal proceedings.

Regarding the obligations for the national court stemming from that incompatibility, the Court reiterated that Union law cannot require the national court to disapply the national legislation based solely on its incompatibility with Directive 1999/70. Nevertheless, as the Member State implements Union law through national legislation, the dispute at hand falls within the scope of the Charter. The Court held that in restricting the access of a fixed-term worker to legal proceedings, the national legislation undermines the fundamental right to an effective remedy as laid down in Article 47 of the Charter. Accordingly, the Court concludes that in a horizontal dispute, the national court must guarantee the judicial protection afforded to individuals by Article 47 of the Charter by disapplying any contravening provision of national law.

Independent use of Article 47 of the Charter

A first element rendering the present case noteworthy is the reliance on Article 47 of the Charter as the sole Charter provision for the purpose of the disapplication of national legislation contravening a directive in a horizontal situation.

Having, without much explanation, disregarded Article 21(1) of the Charter because of a lack of pertinence, and not touching upon Article 30 of the Charter, the Court assessed the national legislation’s compatibility with the Charter solely in reference to its Article 47. While already referred to in Egenberger in relation to the horizontal direct effect of the prohibition of non-discrimination, Article 47 of the Charter was only applied in combination with article 21(1) of the Charter for the purpose of the disapplication of contravening national legislation. Furthermore, while the Court took its time to assert that article 21(1) of the Charter ‘is sufficient in itself to confer on individuals a right which they may rely on as such in disputes between them’ (para. 76), and the reasons why this is the case, no such explicit affirmation of horizontality was rendered in relation to Article 47 was, causing doubts as to whether or not that provision even had horizontal direct effect. (fn1)

The independent use of Article 47 of the Charter in the present case, generating the disapplication of national legislation contravening Directive 1999/70, can thus be considered an explicit clarification of the horizontal direct effect of Article 47 of the Charter. Nevertheless, if considering that what the Court in Egenberger did was in fact an earlier recognition of that provisions horizontal direct effect, the statement in that case that Article 47 of the Charter was capable of being relied upon as such ‘by itself’(para. 78), implies that the Court’s explicit doing so in K.L. v. X, should not come as a surprise.

No ‘specific expression’ or ‘concretisation’ of Charter provision by the directive : untying the knot ?

The second element of the judgment that will undoubtedly raise some eyebrows in the legal scholarship, is that the directive relied upon in conjunction with Article 47 of the Charter is not intrinsically linked with that Charter provision in an equivalent manner to the directive provisions in earlier case law. There, the directive provision at stake displayed an intrinsic link with the Charter provision in ‘laying down […] a general framework’ in protection of the right enshrined in the respective Charter provision (Egenberger, para. 75), giving ‘concrete expression’ to that right (Keolis Agen (Joined Cases C-271/22 to C-275/22), para. 28), or being the successor of the directive that right was based on (Bauer, para. 55-56). In K.L. v. X no such link seemed to be present.

While earlier case law in a.o. Kücükdeveci and Smith (C-122/17) certainly appeared to require such an intrinsic link between the directive provision and the relevant general principle or Charter right before the latter could be called upon in order to generate the disapplication of national legislation contravening the former in a horizontal dispute, later case law makes clear that such a link is not actually presupposed. In Egenberger and Bauer, the Court made clear that the Charter provisions relied upon for such an effectiveness of directives in horizontal situations are ‘sufficient in [themselves]’ and ‘[do] not need to be made more specific by provisions of EU or national law’. The function of the directive is then to trigger article 51(1) of the Charter, enabling an assessment under its horizontally directly effective provisions. The Court’s occupation with nevertheless establishing the intrinsic link between the relevant provision of the directive and the Charter right in those cases, is then attributable to the method it employs for the verification of the compatibility of the national legislation with the Charter right. Since its case law in Mangold, the Court has relied on the substance of the directive to establish the de facto compatibility of the provision of national law with Union law. The de jure consequences of such incompatibility are then drawn from the horizontal direct effect of the general principles, or the rights enshrined in the Charter provisions. In order for this method to deliver a correct result, i.e. whether or not the legislation is compatible with the general principle or right enshrined in the Charter provision at stake, the intrinsic link as described above is a necessary prerequisite. (fn 2)

In K.L. v. X, the Court does not employ the same method of verification, therefore does not need to establish this intrinsic link. As in earlier cases, the incorrect implementation of the directive brings the dispute within the scope of application of the Charter according to its article 51(1). However, in K.L. v. X the Court does not base its verification of the compatibility of the national legislation with the Charter provision on its compatibility with the substance of the directive. Instead, it holds that in its incompatibility with the directive, the national legislation

at issue also undermines the right enshrined in Article 47 of the Charter. In other words, while the intrinsic link as displayed in earlier case law allowed for the Court to conduct its verification of compatibility so that it could be held that because the national legislation contravened the Directive, it contravened the Charter, in the present the case the national legislation, in its incompatibility with the directive also infringes Article 47 of the Charter.

Conclusion: some consequential clarifications

While in light of the prohibition of the horizontal direct effect of directives, and the rather casuistic approach with which the Court has approached the effectiveness of directives in combination with the Charter in horizontal situations in the past, the present judgment might appear to unchain the use of the Charter for this purpose, rendering it far more easy to circumvent the shut door on the horizontal direct effect of directives by escaping out of the window. This statement is only half true. As shown above, the effectiveness of directives in combination with the Charter has not been chained by any impossibility of Article 47 of the Charter to be relied on as the sole Charter provision, nor by any requirement of an intrinsic link between the relevant Directive provision and the right enshrined in the Charter since Mangold reasoning was extended to the Charter itself in Egenberger.

Then again, the second half of the statement has some truth to it. If we consider that it was now explicitly clarified that

• A Directive must not be giving a specific expression to, or concretisising a Charter right in order for national legislation incompatible with that directive to be able to be disapplied in a horizontal situation, but that it suffices that in incorrectly implementing the directive, the national legislation has also infringed or undermined that Charter right; and that

• The Charter right in question can be the right to an effective remedy as laid down in Article 47 of the Charter;

an increase of the amount of cases in which a directive will be held effective in horizontal situations in combination with the Charter is very realistic. As the effects of applying directives in such a manner are quasi indistinguishable from the effects of applying the directive by itself, such a development is liable to further diminish the relevance of the shut door on the horizontal direct effect of directives. As always, time will tell whether or not in the aftermath of this latest judgment, this indeed proves to be the case.

Fien Van Reempts is a PhD researcher at the University of Antwerp and Research Foundation Flanders – FWO (n°11PJ224N). Her research is titled: ‘The effectiveness of directives in horizontal situations: a reassessment in the post exclusion/substitution-dichotomy era’.

(fn1): E Muir, ‘The Horizontal Effects of Charter Rights Given Expression to in EU Legislation, from Mangold to Bauer’ (2019) 12 REALaw 185, 208 – 209.

(fn2): J Lindeboom, ‘Continuïteit en verandering in de rechtspraak over de doorwerking van richtlijnen in de nationale rechtsorde’ (2022) 9/10 NtER 1, 5-6.

SUGGESTED CITATION: Van Reempts, F.; “The Effectiveness of Directives in Horizontal Situations: the Charter Unchained? (K.L. v. X)”, EU Law Live, 05/03/2024, https://eulawlive.com/op-ed-the-effectiveness-of-directives-in-horizontal-situations-the-charter-unchained-k-l-v-x-by-fien-vanreempts/

The EU’s Trade Defence in Action - The General Court upholds the Commission’s significant distortion methodology in T-762/20

Niels Kirst

On February 21, the EU’s General Court issued a crucial judgment on the European Union’s (EU) trade defence instruments (TDIs). Sinopec Chongqing SVW Chemical and Others v Commission (T-762/20) saw the General Court annulling Commission Implementing Regulation (EU) 2020/1336 while at the same time upholding the EU’s ‘significant distortions methodology.’ This judgment carries substantial implications for the EU’s future trade defence investigations. The case relates to two other cases, T-763/20 and T-764/20, will be discussed by Elyse Kneller and Victor Crochet in another analysis published this week.

The applicants, consisting of three Chinese exporters of polyvinyl alcohols (PVA), contested the Commission Implementing Regulation (EU) 2020/1336, which imposed anti-dumping duties of 17.3% on PVA imports from China. The investigation, initiated by Kuraray Europe GmbH, covered the period from July 1, 2018, to June 30, 2019. The Commission recommended anti-dumping duties based on the dumping margin, resulting in a final duty of 17.3% for the applicants. Due to market distortions in China, the Commission established the normal value using Turkish data, raising concerns about the fairness of comparisons.

This led the applicant to contest the measures and bring five legal pleas forward. The first legal plea alleged that the application of Art. 2(6a) of Regulation (EU) 2016/1036 (the basic regulation) is inconsistent with the obligations arising from World Trade Organisation (WTO) law and sought to invoke the principle of consistent interpretation in EU law. The second plea alleged infringement of Art. 2(10) of the basic regulation and a manifest error of assessment. The third plea alleged infringement of Art. 18(1) and (5) of the basic regulation and Art. 6(8) of the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT), the fourth plea alleged infringement of Art. 3(2) and (3) of the basic regulation when establishing price undercutting, and infringement of Art. 3(6) of that regulation, and the fifth and final plea alleged infringement of the rights of defence.

The following analysis will focus on the first legal plea and the General Court’s approval of the ‘significant distortion methodology’, as this is the most crucial development of this case.

The ‘significant distortions methodology’ in EU law refers to a mechanism introduced in 2017 to address situations where prices and costs in exporting countries are distorted due to state intervention (see here and here). This methodology allows the EU to disregard such distorted prices and costs when calculating anti-dumping measures or countervailing duties (for the application so far, see here). Instead, it replaces them with prices and costs from

a representative country where they are deemed to be undistorted – in the present case, Turkish prices were used. This approach ensures that trade defence investigations remain effective, particularly in cases involving imports from state-controlled economies such as China (for the counterargument, see here).

The methodology of Art. 2 (6a) of the basic regulation enables the dismissal of prices and costs in the exporting country if they are influenced by state intervention. It states that costs can be determined based on: ‘the weighted average of the actual amounts determined for other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the country of origin;’ This permits the substitution of these figures with unaffected prices and costs from a representative country – in the present case, Türkiye. Consequently, the approach ensures the effectiveness of trade defence investigations.

The question in the case was whether the EU infringed on WTO law when applying Art. 2 (6a) of the basic regulation. However, the General Court rejected this claim by highlighting that when a legal provision is not intended to implement WTO rules on TDI, e.g. because WTO rules are silent, WTO rules are irrelevant for interpreting this provision. The General Court followed a historical analysis and analysed the legislative intent to arrive at that finding.

The General Court assessed the ‘significant distortion methodology’ as follows. Para. 43 of the judgment states, ‘WTO law does not, however, include specific rules for calculating normal value in such situations.’ Furthermore, para. 41 states that ‘[…], the Commission was not required to interpret it in accordance with the obligations of the European Union in the context of the WTO.’ And finally, in the same para., ‘If that had been the case, the Commission would have been deprived of the discretion which the legislature had intended to grant it.’ In short, if a legal provision within the EU’s internal TDI legislation is not aimed at implementing WTO rules on TDI— perhaps because WTO does not address the issue covered by that provision—then WTO rules are not applicable for interpreting it. This scenario precisely characterises the case under review.

Despite this approval, the Commission Implementing Regulation was nevertheless annulled. The TDI measure under scrutiny was partially annulled due to a distinct calculation error. The General Court invalidated the regulation, particularly scrutinising the Commission’s reductions to the export price, which were deemed unwarranted under Art. 2(10)(e), (g), (i), and (k) of Regulation (EU) 2016/1036. The Court underscored flaws in the Commission’s rationale and the presumption utilised in determining the normal value for Sinopec Ningxia. It concluded that the Commission’s reliance on the highest normal values of other exporting producers stemmed from flawed reasoning, resulting in an inaccurate presumption of non-cooperation (see paras. 175-221). Be that as it may, the Commission will certainly be happy that the ‘significant distortion methodology’ was upheld by the General Court.

Dr Niels Kirst is an Assistant Professor of EU Law at Dublin City University. He is a Member of the Brexit Institute and an investigator at the Horizon Europe Projects REGROUP and EXPRESS².

SUGGESTED CITATION: Kirst, N.; “The EU’s Trade Defence in Action - The General Court upholds the Commission’s significant distortion methodology in T-762/20”, EU Law Live, 06/03/2024, https://eulawlive.com/analysis-the-eus-trade-defence-in-action-the-general-court-upholds-thecommissions-significant-distortion-methodology-in-t-762-20-by-niels-kirst/

EU Law Live Analysis – General Court clarifies

adjustments in dumping calculations in investigations with significant distortions (Cases T-764/20, T-763/20

and T-762/20)

Elyse Kneller & Victor Crochet

1. Introduction

On 21 February 2024, the General Court dismissed two actions for annulment brought by concerning Regulation 2020/1336 (Contested Regulation) imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols (PVA) from China ( T-763/20 and T-764/20). Chinese exporting producers, Sinopec Chongqing and Sinopec Ningxia (together ‘Sinopec’), also challenged the Contested Regulation in a third proceeding (T-762/20), and were successful with respect to one of their legal pleas.

Notably, the judgments of the General Court close the book on the question of whether World Trade Organisation (WTO) law can be invoked to challenge the Commission’s non-use of domestic costs when constructing the normal value under Article 2(6a) of the Basic Regulation 2016/1036 (see further details on this in the analysis by Niels Kirst in EU Law Live).

The remainder of this analysis will focus on two other important aspects of the proceedings. It first deals with the one successful plea in case T-762/20, regarding the Commission’s adjustments to Sinopec’s constructed normal value and export price under Article 2(10) of the Basic Regulation. It then turns briefly to the General Court’s findings in respect of the Commission’s obligations when calculating price undercutting in situations of product market segmentation.

2. Adjustments to Sinopec’s export price

Sinopec argued that the Commission erred when adjusting its export price downward pursuant to Article 2(10) (i) of the Basic Regulation by deducting the SG&A costs and profit margin of its related trader, Sinopec CentralChina, after finding that this trader acted more as an ‘agent’ working on a commission basis than an internal sales department of Sinopec. The Commission claimed that there is a general rule that, where an undertaking sets up a related company to carry out business operations which it would otherwise have to entrust to outside traders, an adjustment will be warranted – the exception being where the two parties form a single economic entity.

The General Court clarified that there is no general principle of this kind as this would ‘shift the burden of proof’ away from the Commission who bears the weight of adducing evidence that an adjustment is justified. This is a noteworthy finding from the General Court, which regularly sides with the Commission in proceedings on this issue, finding more often than not that the Commission’s adjustments under Article 2(10(i) of the Basic

Regulation are warranted. As a result, the General Court found that the Commission did not justify its adjustment to Sinopec’s export price as it did not provide sufficient evidence that Sinopec Central-China was not operating as an internal sales department.

The General Court also sided with Sinopec in finding that the Commission did not make a fair comparison of the constructed normal value and the export price as it deducted costs relating to insurance costs, transport, handling and loading expenses, credit costs and bank charges from the latter in order to arrive at an ‘ex-works’ level, whilst it did not adjust the constructed normal value nor establish that these costs were not already included in the SG&A costs from the representative company in Türkiye. The General Court made clear that as the Commission constructed the normal value using data from a surrogate company, it was for the Commission to demonstrate that the adjustment to the export price was justified – which it did not do.

In contrast, the General Court did not lay the blame on the Commission for increasing the constructed normal value with an amount for non-refundable export VAT, as the export price also included a corresponding amount. Interestingly, it found that the Commission should not have relied on Article 2(10)(b) of the Basic Regulation –as that provision does not allow the normal value of the representative country constructed according to Article 2(6a) to be adjusted to take account of the non-refundable VAT affecting the export price in the country in which the dumped imports originate – but rather Article 2(10)(k), which is a catch-all provision allowing for adjustments of general factors affecting price comparability. This irregularity could not invalidate the Contested Regulation on its own, however, as it had no decisive effect.

3. Price undercutting in segmented markets

The Applicants submitted that the Commission should have examined price undercutting per market segment because the Union producers primarily sold high-quality PVA at higher prices, whilst there was a high concentration of low-quality PVA sold by the Chinese producers at lower prices.

Referring to Hubei (C-891/19), the General Court noted that the Commission may be required to carry out an additional comparison of the prices in each market segment when (i) a clear segmentation of the market and significant variations between market segments; and (ii) a high concentration of domestic sales and dumped imports in separate segments. Applying these conditions to the facts of the case, the General Court reasoned that the Commission was correct to find that there was no clear market segmentation. As a consequence of its finding that all PVA was to a certain extent in competition with each other, the General Court further ruled that the Commission did not err when it compared, for the price undercutting calculation, all sales of PVA made by the Union producers with that of the Chinese producers, even though the Union producers did not sell certain product types.

Elyse Kneller and Victor Crochet are both trade defence lawyers in Brussels, Belgium.

SUGGESTED CITATION: Kneller, E. and Crochet, V.; “EU Law Live Analysis – General Court clarifies adjustments in dumping calculations in investigations with significant distortions (Cases T-764/20, T-763/20 and T-762/20)”, EU Law Live, 07/03/2024, https://eulawlive.com/analysis-eulaw-live-analysis-general-court-clarifies-adjustments-in-dumping-calculations-in-investigations-with-significant-distortions-cases-t%e2%80%91764-20t%e2%80%91763-20-a/

Clarifications of the ‘sufficient link’ test under Article 21 TFEU for taking into account ‘child-raising periods’ completed in another Member State (C-283/21, VA v Deutsche Rentenverischerung Bund)

Pauline Melin

On 22 February 2024, the Court of Justice rendered its judgment in VA v Deutsche Rentenversicherung Bund (C-283/21) where it held that Article 21 TFEU must be interpreted as requiring the Member State responsible for the payment of a pension to take into account ‘child-raising periods’ completed in another Member State when the person has exclusively completed periods of insurance in the first Member State. This remarkably short judgment –only 23 paragraphs– is noteworthy for two reasons. Firstly, the same Court with the same juge rapporteur confirmed its previous judgment in CC v. Pensionsverischerungsanstalt (C-576/20) on the relationship between Article 21 TFEU and the Implementing Social Security Coordination Regulation 987/2009. Secondly, the Court clarified when there is a ‘sufficient link’ with a Member State requiring those ‘child-raising periods’ to be taken into account pursuant to Article 21 TFEU.

The situation in VA v Deutsche Rentenversicherung Bund is a classical cross-border situation, yet connoted by a series of complex events. VA is a German national who has been living in Vaals (Netherlands), located 5 kilometres away from Aachen (Germany). VA attended school and trained professionally in Germany. Furthermore, she has only ever worked in Germany. The complexity of VA’s situation lies in the fact that, before raising her children, VA had been neither employed nor self-employed in Germany and had not contributed to the statutory pension insurance. Prior to the period of raising her children, VA had completed professional training in Germany for which she did a one-year unpaid placement. As a matter of fact, VA started to contribute to the German statutory pension insurance only after October 2012. Although she had worked in Germany on several occasions between her ‘child-raising periods’ and October 2012, she had only pursued marginal occupations which were exempted from social security contributions under German law.

When calculating her pension for total incapacity to work, the German authorities refused to consider the ‘childraising periods’ completed in the Netherlands. Doubting about the compatibility of the refusal with EU law, the Higher Social Court of North Rhine-Westphalia essentially asked the Court of Justice whether those ‘childraising periods’ should have been taken into account pursuant to Article 44(2) of Regulation 987/2009.

The relationship between Article 44(2) of Regulation 987/2009 and Article 21 TFEU

Article 44(2) of Regulation 987/2009 governs the conditions under which a Member State (Member State A) is required to take into account ‘child-raising periods’ completed in another Member State (Member State B). It provides for three cumulative conditions. The first condition is that Member State B does not already take the ‘child-raising periods’ into account. This reflects the rationale of the ‘Single State principle’ whereby the situation of a person should be subject to the social security legislation of only one State. The second condition requires the legislation of Member State A to be applicable to the person concerned on the ground that she or he is pursuing employed or self-employed activity at the date prior to taking the ‘child-raising periods’. The third and final condition demands that the person continues to be subject to the legislation of Member State A when the ‘child-raising periods’ begin.

In the case of VA v Deutsche Rentenversicherung Bund, the Court concluded that the conditions of Article 44(2) of Regulation 987/2009 were not fulfilled since VA had been neither employed nor self-employed in Germany prior to the date of taking the ‘child-raising periods’ (para. 36). The Court therefore turned to an interpretation based on Article 21 TFEU.

The co-existence and complementarity between the EU social security coordination regime and free movement law can be traced back in the jurisprudence of the Court. In Elsen (C-135/99), Kauer (C-28/00), and ReichelAlbert (C-522/10), the Court ruled that free movement law required the legislation of a Member State to be applicable to ‘child-raising periods’ completed in another Member State if there was a sufficient link between those ‘child-raising periods’ and periods of occupation in the first Member State. Furthermore, the Court found in those cases that the Member State has to treat the ‘child-raising periods’ as if they were completed in its territory.

Those judgments have been rendered in the context of Regulation 1408/71, the predecessor of Regulation 883/2004 and Regulation 987/2009. They have been partially codified in Article 44(2) of Regulation 987/2009 as the rationale of the Court’s judgments can be found in that provision. It is however only a partial codification since the reference to the open-ended ‘sufficient link’ test was –perhaps intentionally– left out by the EU legislature who opted for the three cumulative conditions of Article 44(2) instead.

In CC v. Pensionsverischerungsanstalt, decided in July 2022, the Court was asked about the relevance of its previous jurisprudence in Elsen, Kauer and Reichel-Albert to a situation where the conditions of Article 44(2) of Regulation 987/2009 apply ratione temporis. In CC v. Pensionsverischerungsanstalt, the appellant was not employed nor selfemployed immediately prior to taking the ‘child-raising period’ but had been employed or self-employed in that Member State in the past. In other words, the appellant did not fulfil the second condition of Article 44(2) of Regulation 987/2009. Whereas the AG had called the Court to respect the choice made by the legislature regarding the conditions of Article 44(2) of Regulation 987/2009 (AG Opinion in CC v Pensionsverischerungsanstalt, paras. 60-62), the Court chose another option. It held that Article 44(2) of Regulation 987/2009 is not the exclusive instrument that governs the regime of taking into account child-raising periods (C-576/20, para. 55). The Court

explained that, when a person does not fulfil one of the conditions of Article 44(2) but still had worked and paid contributions in the Member State responsible for the payment of the pension, Article 21 TFEU required that Member State to take into account ‘child-raising periods’ completed in another Member State (C-576/20, para. 65).

With VA v Deutsche Rentenversicherung Bund, the Court confirmed its previous judgment in CC v. Pensionsverischerungsanstalt (C-576/20). Hence, the ‘sufficient link’ test under Article 21 TFEU continues to be relevant when the conditions of Article 44(2) of Regulation 987/2009 are not fulfilled.

The existence of a ‘sufficient link’

The difference in VA v Deutsche Rentenversicherung Bund (C-283/21) compared to previous cases was that VA had been neither employed nor self-employed, and not been paying social security contributions, in Germany either before or immediately after taking ‘child-raising periods’ in the Netherlands. In that context, the question was therefore whether the child-raising periods completed in the Netherlands had a sufficient link with periods of insurance completed by VA in Germany.

The Court found that the existence of a sufficient link between periods can be established where the person has exclusively completed periods of insurance, by virtue of periods of training or occupational activity, in the Member State responsible for the payment of pension, both before and after the completion of the child-raising periods in another Member State (C-283/21, para. 47). Then, the Court relied on the definition of periods of insurance contained in Article 1(t) of Regulation 883/2004, whereby periods of insurance do not only cover periods of contribution, employment or self-employment but also all periods treated as equivalent by the legislation of the competent Member State (C-283/21, para. 48). Under German law, periods of vocational training as well as periods of marginal occupation were treated as periods of insurance (C-283/21, para. 50). The fact that the person did not pay contributions during those periods was irrelevant for the existence of a sufficient link if the Member State responsible considers those periods as periods of insurance (C-283/21, paras. 49 and 51). Similarly, the length of residence in the Member State where the person has raised his or her children was irrelevant (C-283/21, para.52).

Although the AG seemed to suggest an interpretation of the ‘sufficient link’ test that was as close as possible to the conditions of Article 44(2) of Regulation 987/2009 (AG Opinion in VA v Deutsche Rentenversicherung Bund, for the reasons stated out in para.52), the Court did not follow that path. Instead, the Court repeated what it had previously stated in CC v Pensionsverischerungsanstalt, namely that both periods before and after taking up ‘childraising periods’ have to be taken into account for the purpose of the establishment of a sufficient link. The real novelty of this case rests in the fact that a ‘sufficient link’ can be established between the ‘child-raising periods’ and any period treated as equivalent to periods of insurance under the law of the Member State concerned, regardless of whether the person has paid contributions during that period.

Pauline Melin is Assistant Professor of EU Law at Maastricht University. The author would like to thank her colleagues, Guido Bellenghi and Nikos Parthenopoulos, for their useful suggestions on a previous version of this text. All errors or omissions remain on the author.

SUGGESTED CITATION: Meline, P.; “Clarifications of the ‘sufficient link’ test under Article 21 TFEU for taking into account ‘child-raising periods’ completed in another Member State (C-283/21, VA v Deutsche Rentenverischerung Bund)”, EU Law Live, 04/03/2024, https://eulawlive.com/analysisclarifications-of-the-sufficient-link-test-under-article-21-tfeu-for-taking-into-account-child-raising-periods-completed-in-another-member-state/

THE LONG READ

The Nature of the European Union in the 21st century

Jaap Hoeksma 1

European integration is a process in which each treaty marks a new stage in the creation of an ever closer Union among the peoples of Europe. The characteristics of the European Coal and Steel Community (‘ECSC’) were different from those of the present European Union (‘EU’). While the construction of the 1952 ECSC has been qualified as a revolutionary breakaway from the traditional pattern of international organisation, the distinctive hallmarks of the EU in its current form can be summarised as follows:

1. Contrary to States on the one hand and traditional international organisations on the other hand, the EU comprises both States and citizens (Article 1 TEU).

2. The EU applies the constitutional principles of democracy and the rule of law to an international organisation (Article 2 TEU).

3. The exercise of sovereignty in the EU is shared between the Member States and the Union, both internally and in the field of foreign affairs.

This observation warrants a reopening of the stalled academic debate about the nature of the European Union in the 21st century.

The 1957 Stresa Conference on the Nature of the ECSC

The first meeting in the process of European integration about the nature of the beast was held in the spring of 1957 in the Italian resort of Stresa. In the wake of the failure of the proposed European Defence Community, the High Authority had invited nearly 500 leading personalities from the 6 Member States to a 10-day conference about the identity of the ECSC. Despite its grandiose set-up, however, the Stresa meeting ended in ideological schism.2 The internationalists and the supranationalists were unable to agree on the question as to whether the first European Community was subject to conventional international law or not and accused each other of betrayal of the post-war ideals.

The Stresa conference has been casting long shadows. Scholars agreed in the aftermath of the unfortunate gathering to describe the emerging polity as an organisation sui generis. 66 years onward, the Franco-German working group on EU Institutional Reform established that hardly any progress has

1. Jaap Hoeksma (1948) is a philosopher of law with numerous publications on the nature of the European Union as a new subject of International law. He has authored the theory of democratic integration and is the inventor of the boardgame Eurocracy.

2. J. Bailleux, How Europe became law. The first international academic conference on the nature of the ECSC (Milan-Stresa 1957), translated from French by Simon Jackson, Revue Française de Science Politique, Vol 60(2), 2010, pp. 295 to 318.

been made in the debate about the nature of the beast.3 The authors found that the intergovernmental approach on the one hand and the federal perspective on the other are still dominating the debate about the identity of the Union. In turn, they suggest portraying the EU in its present form as ‘a hybrid system in which the European general interest is put forward in three ways, notably by the European Commission, by citizens’ representatives in the European Parliament (‘EP’), and by government representatives in the European Council and the Council’.

The fact that the debate has not moved forward an inch in the past seven decades does not imply that the academic community should not have tried to establish the nature of the EU. On the contrary, many attempts have been made as the survey hereunder of what the EU is not may illustrate:

• The EU is not a State because it lacks the will to be a state.4

• The EU is neither an association of states nor a Staatenverbund (BVerfG) as it is also composed of citizens.5

• The EU is not a network as it exercises sovereignty.6

• The EU is neither a traditional nor a neomedieval or a non-imperial empire since it is based on voluntary cooperation.7

• The EU is more than both a federation of nation States or a confederal union of sovereign Member Peoples as it has democratic aspirations of its own.8 9

Under the vigour of the 1992 Maastricht Treaty the EU has been identified as a Union of States and peoples but it has entered a new stage since then.10

The EU has also moved beyond the concept of ‘demoi-cracy’ as the 2007 Lisbon Treaty regards the EU-citizens as a constitutive element in the construction of the Union.11

Far from suggesting that lawyers should agree with Rosas that it may never be possible to identify the EU or that political scientists should acquiesce in Bellamy’s observation that ‘a sufficiently developed

3. Franco-German Working Group on EU Institutional Reform, Sailing on High Seas: Reforming and Enlarging the EU for the 21st Century, Paris—Berlin 2023.

4. J. Ku, ‘Is the European Union now a State?’, Opinio Juris, 17 July 2010.

5. Bundesverfassungsgericht, 12 October 1993, 2 BvR 2134/92 (Maastricht).

6. J. Zielonka, ‘Barking up the wrong European tree’, Social Europe, 4 December 2023.

7. J. M. Barroso, Press Conference 10 July 2007, Brussels, Youtube Euractiv.

8. G. Ricard-Nihoul, Pour une Fédération européenne d’Etats-nations: la vision de Jacques Delors révisitée, Larcier 2011.

9. A. Cuyvers, The EU as a Confederal Union of Sovereign Member Peoples, Leyden 2013.

10. W. van Gerven, The European Union: a Polity of States and Peoples, Stanford 2005.

11. K. Nicolaïdis, The Idea of European Demoicracy, in: J. Dickson and P. Eleftheriadis, Philosophical Foundations of European Union Law, Oxford 2012.

and comprehensive political theory of the EU remains a work in progress’, their findings should not be perceived as an incentive to try harder but as an encouragement to study the Union from a different perspective.12 13

The list of qualifications that do not apply to the EU can easily be expanded and has indeed been increased from the historical perspective by Geert Mak.14 The common denominator of these non-applicable terms is that they accentuate the impossibility of describing the present EU in terms of the paradigm of the Modern State System or in those of the pre-Westphalian era.

This observation is validated by the persistent use of the term ‘EU democracies’ in the Defence of Democracy Package, which the European Commission submitted ahead of the 2024 elections for the European Parliament.15 Thus, we should verify whether the claim of the internationalists at the Stresa conference that the ECSC was subject to conventional international law remains valid for the present Union.

Sovereignty in the framework of the EU

As the absolute sovereignty of States forms the hallmark par excellence of the Westphalian system of International Relations, an analysis of the way in which this concept is being applied by the European Union may provide clarity about the presumed incompatibility of the constitutional architecture of the EU with conventional international law. At the start of the investigation, it should be recalled that the drive for the 6 participating States to embark on the adventure of sharing the exercise of sovereignty was inspired by the experience that absolute sovereignty destructs absolutely. The founding myth, as it tends to be called in the 21st century, was harsh reality for contemporary peoples and politicians.16 Two devastating world wars in 30 years had brought doom and gloom to the ‘old continent’. The most effective way to break the vicious circle of war and to give Europe a chance to survive was to rein in the absolute power of its bellicose states.17 Seen from this point of view, the most appropriate domains to start the deviation from the traditional pattern of international relations by pooling sovereignty were indeed those of coal and steel. So, high ideals were implemented with practical means!

12. A. Rosas and L. Armati, EU Constitutional Law, 3d edition, Oxford 2018.

13. R. Bellamy and J. Lacey, Political Theory and the European Union, Routledge 2017.

14. G. Mak, In Europa, Amsterdam 2004.

15. European Commission, Defence of Democracy Package of 12 December 2023.

16. S.R Larsen, The Constitutional Theory of the Federation and the European Union, Oxford 2021.

17. J. Huizinga, Geschonden wereld, Haarlem 1945.

The emancipation of European law

Having learned that they could share the exercise of sovereignty in a limited field without losing statehood, the 6 participating States agreed to broaden their experiment to the entire economy. Determined to lay the foundations for an ever-closer Union among the peoples of Europe, they established the European Economic Community in 1957. Within 5 years following its entry into force, the Court of Justice found that the Member States had in fact created a new legal order of international law, which comprised not only the Member States but also their citizens.18 A decade onward, the Member States presented themselves in the Declaration on European Identity to the outside world as a Union of democratic States.19 As the citizens of the Member States received the additional status of EU citizens by virtue of the 1992 Treaty of Maastricht, the constitutionalisation of the Union continued unabatedly. The inclusion of the Charter of Fundamental Rights of the EU in the 2007 Lisbon Treaty confirmed the unprecedented application of constitutional values to an international organisation. As a result of this cross-fertilisation European law established itself as an original branch of public law between national and international public law.

A single currency

The EU not only enjoys legal sovereignty but has also attained monetary sovereignty. The aim of the Maastricht Treaty was to crown the internal market with a single currency. This ambition was greeted with scepticism by the financial markets as the global monetary system is based on the Westphalian presumption that currencies must be backed by States. The mistrust of the markets reached a peak during the euro-crisis of 2008 to 2014 and threatened to bring down both the euro and the EU. Only after a large majority of the Member States had concluded an extraordinary treaty,20 which enabled the president of the European Central Bank to proclaim that he would do whatever it takes to save the single currency, the functioning of the euro as a ‘currency beyond the state’ and the monetary sovereignty of the EU ceased to be questioned.21

18. Judgment of the Court of Justice of 5 February 1963, Van Gend en Loos, EU:C:1963:1

19. EC Bulletin 1973-12.

20. Treaty on Stability, Coordination and Governance in the Economic and Monetary Union of 2 March 2012.

21. H. van Rompuy, Europe in the storm, Leuven 2014.

Transnational democracy

The transformation of an association of States into a democratic polity has not happened overnight but is the result of a long incremental process.22 The change-over of the Parliamentary Assembly of the Communities to a directly elected parliament, which formed the basis for the first elections of the European Parliament in 1979, formed the initial step on the road to democratic sovereignty.23 In this perception, the introduction of EU citizenship was a logical milestone as the democratic functioning of a polity requires citizenship. Without citizenship no democracy! Consequently, the Lisbon Treaty constructs the EU as a transnational democracy and stipulates that the governance of the Union has to respect similar standards of democracy and the rule of law as it requires its Member States to meet. In its verdicts of 19 December 2019 the European Court of Justice accentuated the autonomy of the EU’s representative democracy by putting beyond doubt that the Member States should not only ensure the smooth conduct of the elections for the European Parliament but also should refrain from actions which would have the effect of undermining the transnational democracy of the Union.24

A democratic Union of democratic States

This concise analysis of the deviation by the EU from the traditional patterns of international law may serve to provide the newly introduced phrase of the EU’s democracies with a legal-philosophical foundation. It demonstrates that, in order to understand the evolution of the emerging polity and to establish the identity of the Union, scholars have to replace the Westphalian paradigm of states and diplomates with the civic perspective of democracy and human rights. Rosas’ suggestion that the European conundrum might never be solved would have been valid if the template of the Modern State System had been eternal indeed, as Jean-Jacques Rousseau proclaimed in the 18th century.25 However , once the democratic approach has been substituted for the traditional Westphalian paradigm, the horizon of the drive towards ever closer Union can be broadened. From the democratic perspective, it is obvious that the identification of the Communities in 1973 as a Union of democratic States implied that the polity was poised to meet similar standards of democracy and the rule of law as its Member States. The present use of the phrase ‘the EU’s democracies’ indicates that, 50 years onward, the European Union has overcome its democratic deficit and has evolved into a Union of democratic States which also constitutes a democracy of its own.26 In its Conditionality Verdicts of 16 February 2022 the Court of Justice of the EU has shown how the democratisation of the EU has taken place. The Court found that the Member

22. L.M. Poiares Pessoa Maduro and M. Wind (eds), The Transformation of Europe: twenty-five years on, Cambridge University Press 2017. 23. Act concerning the election of the members of the European Parliament by direct universal suffrage, OJ L. 278 8.10.1976.

24. Judgement of the Court of Justice of 19 December 2019, Puppinck and others EU:C: 2019:1113 and judgement of the Court of Justice of 19 December 2019, Junqueras Vies EU:C:2019:1115.

25. J.J. Rousseau, A Lasting Peace through the Federation of Europe and the State of War (1756), trans. C.E. Vaughan, London 1917.

26. J. Hoeksma, The Democratisation of the European Union, Eleven, the Hague 2023.

States have first agreed on their common values and have subsequently applied these values to their organisation. in addition, the Court established that the EU is entitled to defend its values and that the application of the rule of law-sanctions does not constitute unwarranted interference in the internal affairs of sovereign States.27

Conclusion

By evolving from a Union of democratic States to a European democracy the EU has outgrown the Westphalian system of International Relations. In hindsight, this conclusion could have been reached much earlier as the aim of the Westphalian system is to regulate the relations between States, while the EU has established itself as a democratic polity of states and citizens. It follows that the Union cannot be identified in terms of that template. The shortest way to describe ‘a Union of democratic States which also constitutes a democracy of its own’ is to call it a democratic Union of democratic States.28 As the EU has emulated the Westphalian system, it has overcome the traditional dichotomy between international organisations and democratic principles. Hence, it is no longer contradictory to identify the Union from the external perspective as a democratic international organisation. Taking into account that the exercise of sovereignty in the polity is divided between the Member States and the Union, the conclusion of this analysis may serve to underpin the concept of ‘the EU’s democracies’ with the identification of the European Union as a democratic international organisation, in which the exercise of sovereignty is shared between the Member States and the Union.

Two caveats apply. Just like constitutions, constitutional treaties contain norms which may be interpreted differently by various addressees. However, a specific problem of the EU is that one or more Member States are unwilling to respect the values of the Union for ideological reasons.29 On the other hand, as the determination to lay the foundations for an ever closer Union among the peoples of Europe is far from exhausted, it should be added that future Treaties may drive the EU towards new stages of evolution. During the lifespan of the Lisbon Treaty, however , politicians and judges are legally obliged to defend the EU’s democracies against democratic backsliding and constitutional erosion.

27. Judgments of the Court of Justice of 16 February 2022, Hungary vs Parliament and Council and Poland vs Parliament and Council, C-156/21 and C-157/21, EU:C:2022:97 and 98.

28. J. Hoeksma, The European Union: a democratic Union of democratic States, Oisterwijk 2021.

29. M. Wind, The Tribalization of Europe: A Defence of our Liberal Values, Polity 2020.

HIGHLIGHT F THE WEEK S O

Request for a preliminary ruling relating to non-execution of European arrest warrant published in OJ

Monday 4 March

On 4th March, the Official Journal of the European Union published Criminal proceedings against AR (also referred to as Rugu) (C-722/23), a case concerning a request for a preliminary ruling from the Court of Cassation in Belgium on the interpretation of Framework Decision 2002/584/JHA on the European Arrest Warrant (EAW).

Read on EU Law Live

Preliminary reference on the compatibility with Article 21(1) TFEU of Lithuanian law prohibiting the recordal of a marriage contract in Register of Marriage Contracts

Monday 4 March

The Official Journal of the EU published a request for a preliminary ruling, lodged on 21 December 2023, from the Lietuvos vyriausiasis administracinis teismas (Lithuania), concerning a dispute between the appellant, I. J., and the respondent, the State enterprise Registers Centre: Registrų centras (C-789/23).

Read on EU Law Live

Action against EDPB’s decision concerning final measures adopted against Meta, under Article 66(2) GDPR, published in OJ

Monday 4 March

Official publication was made of an action, brought on 8 January 2024, by Meta Platforms Ireland (‘Meta’) against the European Data Protection Board (‘EDPB’): Meta Platforms Ireland v European Data Protection Board (T-8/24).

Read on EU Law Live

Appeal in Mazepin v. Council published in Official Journal

Monday 4 March

On 4th March, the Official Journal of the European Union published the appeal in Mazepin v. Council (Case C-35/24 P), a case concerning the appellant’s claim that the Court should annul certain Council decisions, insofar as they include the appellant in the list of persons and entities subject to restrictive measures.

Read on EU Law Live

Request for a preliminary ruling on Article 325 TFEU and Charter of Fundamental Rights published in OJ

Monday 4 March

The Official Journal published Beach and bar management (C-733/23), a request for a preliminary reference lodged by the Administrativen sad Burgas (Bulgaria) concerning the interpretation of Article 325 TFEU, Article 273 of VAT Directive 2006/112/EC, and Articles 48-50 of the Charter of Fundamental Rights.

Read on EU Law Live

Commission publishes achievements and setbacks of the 13th Ministerial Meeting of the WTO

Monday 4 March

On behalf of the EU, the European Commission, according to its press release, managed to secure important agreements on e-commerce, new rules to improve global services trade, environmental cooperation, and strengthening the position of developing countries in the global trading system, at the 13th Ministerial Meeting of the World Trade Organization, in Abu Dhabi.

Read on EU Law Live

Council approves first ever sustainable investment facilitation agreement between the EU and Angola

Monday 4 March

The Council adopted a decision on the conclusion of the sustainable investment facilitation agreement (SIFA) between the EU and Angola, the aim of which is to attract and expand investments, while integrating environment and labour rights commitments.

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Commission fines Apple over unfair trading conditions concerning music streaming services providers

Monday 4 March

Apple received a fine, over €1.8 billion, by the European Commission for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users through its App Store.

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Council adopts regulation on the cross-border provision of digital public services in the EU

Monday 4 March

The Council adopted the Interoperable Europe Act, a regulation which aims to create more efficient digital public services across the EU.

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Council and Parliament reach provisional agreement on regulation on packaging waste

Tuesday 5 March

On 4th March, the Council and the European Parliament reached a provisional political agreement on a proposal for a regulation on packaging and packaging waste, which aims to ‘tackle the increase in packaging waste generated in the EU, while harmonising the internal market for packaging and boosting the circular economy.’

Read on EU Law Live

Council and Parliament strike deal to ban products made with forced labour

Tuesday 5 March

The Council and the European Parliament struck a provisional agreement on a regulation banning, in the EU internal market, products made with forced labour, and clarifying the responsibilities of both the Commission and national authorities in the investigation and decision-making process.

Read on EU Law Live

Commission Implementing Regulation imposing anti-dumping duty on cast iron products, originating from China, published in OJ

Tuesday 5 March

Official publication was made of Commission Implementing Regulation 2024/770 of 4 March 2024 imposing a definitive anti-dumping duty on imports of certain cast iron articles originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation 2016/1036 on protection against dumped imports from countries not members of the Union (‘the basic Regulation’).

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Court of Justice to stream hearing in case concerning the compatibility of national legislation with Article 267 TFEU, and interpretation of Article 47 of the Charter

Tuesday 5 March

The Court of Justice’s hearing in KUBERA (C-144/23), a case concerning a preliminary reference on the interpretation of the third paragraph of Article 267 TFEU, was streamed on the Court’s website.

Read on EU Law Live

Kočner v. Europol: Europol and Member State jointly and severally liable for damage from unlawful data processing

Tuesday 5 March

The Court of Justice handed down judgment in Kočner v. Europol (C-755/21 P), a case concerning the joint and several liability of a Member State and Europol in relation to unlawful data processing.

Read on EU Law Live

Court of Justice upholds validity of amended Directive 91/477 on the acquisition and possession of weapons

Tuesday 5 March

The Grand Chamber of the Court of Justice handed down judgment in Défense Active des Amateurs d’Armes (C-234/21), a request for a preliminary ruling from the Constitutional Court of Belgium concerning the validity of Council Directive 91/477 on the acquisition and possession of weapons, as amended by Directive 2017/853.

Read on EU Law Live

Commission invitation to interested parties to submit comments, in the context of State aid proceedings relating to Swedish tax exemption schemes, published in OJ

Tuesday 5 March

The Official Journal of the EU published an invitation, to interested parties, to submit comments pursuant to Article 108(2) TFEU, in regard to State Aid SA.56908 (2023/C) – Prolongation and modification of biogas scheme for motor fuel in Sweden, as well as State Aid SA.56125 (2023/C) (ex 2020/N) – Tax exemption for non-food based biogas and bio-propane in heat generation.

Read on EU Law Live

Court of justice sets aside General Court’s judgment upholding Commission’s decision refusing access to toys safety standards

Tuesday 5 March

The Court of Justice handed down its judgment concerning an appeal, brought on 23 September 2021, by Public.Resource. Org, Inc. against the judgment of the General Court in Case T-185/19, by which the appellant contended there was an error in assessing the application of the exception in the first indent of Article 4(2) of Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents, as well as an error in law in not recognising an overriding public interest in that regard: Public.Resource.Org and Right to Know v Commission and Others (C-588/21 P).

Read on EU Law Live

Defence Industrial Strategy and Programme to support Europe’s readiness and security

Tuesday 5 March

The European Commission and the High Representative presented the first-ever European Defence Industrial Strategy at EU level and proposed an ambitious set of new actions to support the competitiveness and readiness of its defence industry.

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Directive boosting consumer rights for the green transition, amending UCPD and CRD, published in OJ

Wednesday 6 March

Official publication was made of Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and through better information.

Read on EU Law Live

Council and Parliament reach agreement on EU space management reform

Wednesday 6 March

The Council and the European Parliament reached a provisional agreement on the reform of the Single European Sky, which consists of two items: an amended proposal for the recast of the Single European Sky regulation (SES 2+) and a proposal for a regulation amending the EU Aviation Safety Agency (EASA) regulation.

Read on EU Law Live

Commission rules subjecting new battery electric vehicles, originating from China, to registration, published in OJ

Wednesday 6 March

The Official Journal of the EU published Commission Implementing Regulation 2024/785 of 5 March 2024 making imports of new battery electric vehicles designed for the transport of persons originating in the People’s Republic of China subject to registration.

Read on EU Law Live

Council and Parliament strike provisional deal on cyber security package

Wednesday 6 March

The Council and the European Parliament reached a provisional agreement on the so-called ‘cyber solidarity act’, as well as on a limited amendment to the cybersecurity act (CSA).

Read on EU Law Live

Council and Parliament representatives strike deal on revision of the Plant Health Law

Wednesday 6 March

The Council and European Parliament reached a provisional agreement on a targeted revision of Regulation (EU) 2016/2031, also known as the Plant Health Law, which aims to improve the application and enforcement of those rules.

Read on EU Law Live

ECtHR streaming hearing of case concerning transmission and use in competition law proceedings of data obtained in criminal investigations

Wednesday 6 March

The European Court of Human Rights’ hearing, in Ships Waste Oil Collector B.V. and Others v. the Netherlands (application nos. 2799/16, 2800/16, 3124/16 and 3205/16), a case concerning the transmission of data, lawfully obtained in criminal investigations through telephone tapping, to another law enforcement authority, the Competition Authority, that used those data in unrelated administrative investigations into the applicants’ companies’ involvement in price-fixing, was streamed on the ECtHR’s website.

Read on EU Law Live

General Court dismisses two actions for annulment against restrictive measures imposed upon Belarusian companies

Wednesday 6 March

The General Court handed down its judgment in BSW v. Council (T-258/22) and in AAT Mostovdrev v. Council (T-259/22) concerning two actions for annulment challenging Council Decision (CFSP) 2022/356 amending Decision 2012/642/CFSP in regard to restrictive measures in view of the situation in Belarus and against Council Regulation 2022/335 amending Regulation 765/2006 concerning restrictive measures in view of the situation in Belarus (‘the contested acts’).

Read on EU Law Live

Council and Parliament reach agreement on transfer of proceedings in criminal matters

Thursday 7 March

The Council and the European Parliament reached a provisional agreement on a proposed law related to the transfer of proceedings in criminal matters, which will ‘regulate the conditions under which criminal proceedings initiated in one member state may be transferred to another member state.’

Read on EU Law Live

Court of Justice clarifies GDPR concepts of ‘personal data’ and ‘data controller’ in context of a personal data auctioning system

Thursday 7 March

The Court of Justice’s Fourth Chamber delivered its judgment in IAB Europe (C-604/22), a case regarding a request for a preliminary ruling concerning the notion of ‘data controller’, within the meaning of Article 4(7) GDPR, and the question of whether a string composed of a combination of letters and characters, which stores users’ preferences for advertising purposes, can be considered personal data.

Read on EU Law Live

Court of Justice interprets duties of national regulatory bodies for the railway sector under Article 56 of Directive 2012/34

Thursday 7 March

The Court of Justice handed down judgment in Die Länderbahn and Others (C-582/22), a request for a preliminary ruling from the Administrative Court in Köln (Germany) concerning the interpretation of Directive 2012/34/EU establishing a single European railway area.

Read on EU Law Live

Court of Justice partly upholds appeal in OC v. Commission

Thursday 7 March

The Court of Justice handed down judgment in OC v. Commission (C-479/22 P), an appeal brought against the General Court’s earlier judgment in OC v. Commission (T-384/20), concerning the applicant’s action for damages under Article 268 TFEU in relation to OLAF’s press release 13/2020, titled ‘OLAF investigation uncovers research funding fraud in Greece’.

Read on EU Law Live

Court of Justice: Italian measure imposing additional financial burden to importers of green electricity is, in principle, compatible with EU internal market rules

Thursday 7 March

The Court of Justice handed down its judgment in Fallimento Esperia and GSE (C-558/22), a case concerning the compatibility of the Italian legislation, which imposes on importers of green electricity a financial burden that does not apply to domestic producers of the same product, with Articles 18, 28, 30, 34, 107, 108 and 110 TFEU, and with Directive 2009/28/EC on the promotion of the use of energy from renewable sources.

Read on EU Law Live

Court of Justice provides guidance regarding certain provisions of the VAT Directive, as well as principles relating to the exercise of right to deduct value added tax

Thursday 7 March

The Court of Justice delivered its judgment in a case concerning a reference for a preliminary ruling in regard to the interpretation of Articles 9(1) and 167 of the VAT Directive, and of the principles of value added tax neutrality, proportionality, protection of legitimate expectations and legal certainty: Feudi di San Gregorio Aziende Agricole (C-341/22).

Read on EU Law Live

Commission Implementing Regulation amending current rules on definitive anti-dumping duty on imports of ceramic tiles originating in India and Türkiye, published in OJ

Friday 8 March

The Official Journal of the EU published Commission Implementing Regulation 2024/804 amending Implementing Regulation (EU) 2023/265 imposing a definitive anti-dumping duty on imports of ceramic tiles originating in India and Türkiye.

Read on EU Law Live

Directive amending certain provisions of MiFID II, published in OJ

Friday 8 March

Official publication was made of Directive (EU) 2024/790 of the European Parliament and of the Council of 28 February 2024 amending Directive 2014/65/EU on markets in financial instruments (MiFID II).

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AG Collins: Preliminary reference concerning contracting authority seeking clarification from a tenderer (economic operator) established in Türkiye should be inadmissible

Friday 8 March

Advocate General Collins handed down his Opinion in Kolin Inşaat Turizm Sanayi ve Ticaret (C-652/22), a preliminary ruling by the Visoki upravni sud Republike Hrvatske (Administrative Court of Appeal, Croatia), which, as stated by the AG, would afford the Court of Justice an opportunity to clarify the circumstances in which, after the expiry of the deadline for the submission of bids, contracting authorities may seek corrections or clarifications from tenderers.

Read on EU Law Live