* Respectively lecturer and senior lecturer.
Since the last issue of EIPASCOPE the Court has delivered a number of interesting decisions despite the summer recess. This article will review recent case law related to damages for breach of Community law, the four freedoms, the environment, equal treatment of men and women, public procurement as well as various institutional questions.
The principle of state liability for breach of Community law was first set out in the Francovich decision ( ECR I-5357). On a number of occasions since that time the Court has been called upon to clarify the conditions under which damages may be obtained. Further light was shed on this matter in Case C-5/94 Hedley Lomas of 23 May this year. This case concerned a refusal on the part of the United Kingdom to issue licences for the export of animals for slaughter to Spain. This refusal was based on the belief that Spain, although it had implemented Directive 74/577/EEC of 18 November 1974, had not taken sufficient measures to ensure its enforcement and that some of the Spanish slaughterhouses were not complying with the provisions of the Directive. It was on this basis that Mr Hedley Lomas was refused an export licence for the export of sheep for slaughter to a specific Spanish slaughterhouse. This licence was refused despite the fact that there was no reason to believe that the slaughterhouse in question was not complying with the Directive. Mr Lomas brought proceedings to obtain damages.
Having established that the refusal to issue export licences was an infringement of Community law relating to the free movement of goods, the Court went on to consider the question of state liability. Referring to its judgments in Francovich and Brasserie du Pêcheur and Factortame (Joined Cases C-46/93 and C-48/93, 5 March, 1996, see EIPASCOPE No. 2, 1996). the Court emphasized that the right to reparation must be recognized when three conditions are met: 1) the law infringed must confer rights on individuals; 2) the breach must be sufficiently serious; and 3) there must be a causal link between the breach and the damage sustained. In applying these conditions to the Lomas case, the Court considered that as Article 34 EC creates rights for individuals the first condition was fulfilled. As far as the second condition was concerned, the Court pointed out that the breach was serious because the UK government had no discretion with respect to the application of the legislation and, in addition, it had not proved that the slaughterhouse concerned had failed to comply with the terms of the Directive. The Court did not rule on whether or not the third condition had been fulfilled as it felt that this was a matter for the national court to decide. Nevertheless, it would appear that the existence of a causal link between the breach and the damage should not be very difficult to establish.
With respect to the free movement of goods, the full Court delivered three judgments concerning the question of trademarks under Community law. See Joined Cases C-427/93, C-429/93 and C-436/93, Paranova and C-71/94, C-72/94 and C-73/94, Eurim-Pharm and Case-232/94, MPA Pharma delivered on 11 July 196. In these cases the Court further elaborated on the criteria set out in Case 102/77, Hoffman-La Roche ( ECR 1139) and Case 1/81, Pfizer ( ECR 2913) concerning the circumstances under which a trademark owner may rely on his rights to prevent an importer from marketing a product put on the market in another Member State by the trademark owner or, with his consent, where that importer has repackaged the product in new packaging to which the trademark has been reaffixed. In the first place it is clear that the trademark owner cannot oppose the repackaging of a product if this is necessary in order to sell the product in the country of importation. However, in cases where the importer may sell the product without repackaging it, the trademark owner is entitled to object if the importer decides to repackage the product. There is no need to repackage a product if it can be rendered suitable for marketing in the Member State of importation simply by affixing new labels or by adding new information or user instructions in the language of the relevant Member State.
The trademark owner will also be entitled to object to the repackaging if it involves a risk that the product inside the package will be exposed, tampered with or subject to influences affecting its original condition. However, as far as pharmaceutical products are concerned, this will not be the case where the repackaging only affects the internal packaging thus leaving the inner packaging intact. Consequently, the mere removal of blister packs from their external packaging and their insertion with other packs into new external packaging cannot be considered to affect the original condition of the product inside the packaging. The Court emphasized that the mere fact that there is an isolated risk of hypothetical error will not be sufficient to confer on the owner of the trademark the right to oppose the repackaging.
As far as the repackaging is concerned, parallel importers are also required to meet a number of other conditions. In the first place, the repackaged product must indicate who has carried out the repackaging. This indication must be printed on the external packaging in such a way that it may be understood by a person with normal eyesight, exercising a normal degree of protection. The importer is under no obligation to state that the repackaging was carried without the authorization of the trademark owner. However, in the event that the parallel importer has added an extra article from a source other than the trademark owner, he must ensure that the origin of the extra article is indicated in such a way as to dispel any impression that the trademark owner is responsible for it. Secondly, the external package must clearly indicate who packaged the product and the packaging must not be such as to give rise to the possibility of damage being caused to the reputation of the trademark. In the case of pharmaceutical products, the Court considered it possible that damage might be caused by defective, poor quality or untidy packaging. However, the Court considered that the requirements concerning the presentation of the product varied according to whether the product was to be sold in hospitals or through pharmacies. In the former case, the Court was of the opinion that presentation was less important than in the latter. Thirdly and finally, the trademark owner must be given advance notice that the repackaged product is being put on sale.
From the 1978 Hoffman-La Roche case, it is clear that an owner may not rely on his rights if this contributes to the artificial partitioning of the markets between the Member States. In the cases decided on 11 July 1996, the Court emphasized that when determining whether this condition is met it is not necessary to establish that the owner deliberately sought to partition the market. However, the Court also stressed that the partitioning of the market will not be considered to be artificial when the action of the trademark owner can be justified by the need to safeguard the essential function of the trademarks.
In the case of Bristol Meyers a question was also raised concerning the relationship between Article 36 EC and Council Directive 89/104/EEC to approximate the law of the Member States relating to trademarks. In its decision the Court emphasized that national rules on the subject of trademarks must be assessed in the light of the Directive, however the Directive itself should be interpreted in the light of Article 36. The Court then went on to hold that Article 36 remained the basis for determining the scope of application of Article 7(1) of the Directive.
The Semeraro Casa Uno case (Joined Cases C-418/93, C-419/93, C-421/93, C-460/93, C-461/93, C-462/93, C-464/93, C-9/94, C-10/94, C-11/94, C-14/94, C-15/94, C-23/94, C-24/94 and C-332/94 Semeraro Casa Uno of 20 June 1996) is the latest in a series of cases concerning Sunday trading rules. In its decision the Court upheld its previous ruling in the Punto case (Joined Cases C-69/93 and C-258/93  ECR I-2355) and ruled that Article 30 EC is not to be interpreted as applying to national legislation on the closing times of shops, which applies to all traders operating within the national territory and which affects in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States. Although the Italian national court considered that the legislation in question discriminated indirectly against imported goods due to the particular nature of the Italian market, the Court refused to consider this issue when deciding whether or not the measure had the same de facto effect on domestic and imported products.
As regards the free movement of persons the Court has delivered three rulings concerning the public service exemption under Article 48(4) EC in Case C-173/94 Commission v Belgium, Case C-473/93 Commission v Luxembourg and Case C-290/94 Commission v Hellenic Republic delivered on 2 July 1996. The three cases concerned access to a number of posts in areas including research; education; health; inland transport; posts and telecommunications; water, gas and electricity distribution; and music. In conformity with its previous case law, the Court pointed out that in determining whether or not posts fall within the scope of application of Article 48(4), it is necessary to consider whether or not they typify the specific activities of the public sector, in so far as they involve the exercise of power conferred by public law and responsibility for safeguarding the general interests of the State or of other public bodies. Therefore, before deciding whether or not Article 48(4) is applicable, it is necessary to take into consideration the nature of the tasks and responsibilities inherent in the post. The Court considered that the Commission was competent to exclude entire areas from the Article 48(4) derogation and that it was not necessary for it to examine the posts concerned on a case by case basis. Although Luxembourg argued that, in view of the size of the country and its specific demographic situation, it was necessary for teachers to be Luxembourg nationals in order to transmit traditional values, the Court refused to exclude primary school teachers from the scope of Article 48. That refusal was not shaken by considerations relating to the preservation of national identity in a demographic situation as specific as that prevailing in the Grand Duchy of Luxembourg.
Article 52 EC on the freedom of establishment has been used by the Court of Justice to ensure that non-resident taxpayers are treated in the same way as resident taxpayers. In case C-107/94, Asscher of 27 June 1996, the Court of Justice was asked a number of questions concerning Dutch legislation which was applying a higher rate of tax to non-residents than to residents pursuing the same activity. In its reply, the Court first pointed out that although direct taxation falls within the competence of the Member States it must nevertheless respect the provisions of Community law and avoid any discrimination for reason of nationality. Although the national legislation at issue applied equally to natinals and non-nationals, it was likely to have a disproportionate effect on the latter group. As a result, and in view of the fact that there was no objective difference between the situation of resident and non-resident taxpayers which was capable of justifying the difference in treatment, the Court held that the Dutch legislation constituted an infringement of Article 52 EC.
Article 52 was again at issue in Case C-101/94, Commission v Italy of 6 June 1996 which concerned an Italian law obliging dealers in transferable securities to have their registered offices on Italian territory. In its judgment, the Court acknowledged that freedom of establishment is to be exercised under the conditions laid down by the law of the country of establishment for its own nationals, and that those national conditions may demand that the exercise of a specific activity is restricted and subject to particular rules or supervision. In this respect, the Court emphasized that Article 52 prohibits not only direct discrimination against nationals of other Member States, but also all national rules which are liable to place EC nationals from other Member States in a less favourable legal or factual situation than that of a national of the State of establishment. The Court considered that the Italian legislation did discriminate against dealers from other Member States in so far as it prevented them from using certain forms of secondary establishment, and it caused them to incur additional costs which Italian dealers did not have to bear. Although Italy tried to argue that the rules were justified on the grounds that it was not possible to compare the rules on access to the profession of securities dealer in the various Member States and that the location of the dealer' s principal establishment on Italian territory was the only means of supervising and eventually sanctioning the dealers, the Court refused to accept this argument. From the judgment, which should be read together with Case C-55/94, Gebhard ( ECR I-4165) concerning similar rules applicable to lawyers, it can be concluded that it is not sufficient that the residence requirement facilitates the supervision and control of the operators if there are other ways of attaining this objective. The Italian law was also contrary to Article 59 EC because it precluded dealers from other Member States from providing their services in Italy.
As far as the free movement of services is concerned, the Television without Borders Directive' (89/552) came up for consideration by the Court in Case C-11/95 Commission v Belgium and Case C-222/94 Commission v UK, both of which were decided on 10 September 1996. In these cases the Court was asked to interpret Article 2(1) of the Television Directive which provides that each Member State shall ensure that all television broadcasts transmitted by broadcasters under its jurisdiction comply with the law applicable to broadcasts intended for the public in that Member State (the principle of one-control only). Furthermore, the Court was required to interpret Article 2(2) of the Directive on the Member States' obligation to ensure freedom of reception of broadcasts and that retransmissions on their territory shall not be restricted. In the case against Belgium the Court held that, by maintaining in the French speaking region a system of prior authorization for the retransmission by cable of television broadcasts emanating from other Member States, Belgium was in breach of Article 2(2) of the Directive. In reaching this conclusion the Court classified cable distribution as an activity which comes within the scope of the Directive. In addition the Court emphasized that it is for the Member State from which the television broadcasts emanate to monitor the application of the law of the originating Member State applying to such broadcasts and to ensure compliance with the Directive. The receiving Member State does not have the right to exercise its own control in thisrespect (see Hedley Lomas above). While the Directive provides that the receiving Member State may exceptionally suspend retransmission, this right may only be exercised under the circumstances mentioned in the relevant Article. Generally speaking, the receiving Member State has no right to exercise secondary control. Finally, the Court also found that Belgium had failed to fulfil its obligation under the Television Directive concerning three other, to some extent similar, systems of prior authorization.
At issue in the case against the UK was the definition of the term jurisdiction' used in the phrase broadcasters under [the] jurisdiction [of a Member State]' which appears in the first indent of Article 2(1) of the Directive. While the Commission argued that jurisdiction depends on where the broadcaster is established, the UK claimed that it depended on the Member State from whose territory the broadcast was transmitted. In its decision, the Court looked to the purpose of the rule on jurisdiction, which is to make sure that a Member State ensures that all television broadcasts made by broadcasters under its jurisdiction comply with the law applicable to broadcasts in that Member State, including the provisions of the Directive. On this basis the Court considered that jurisdiction cannot depend on the place from which the broadcast is transmitted and that only the jurisdiction ratione personae over television broadcasters can be decisive. Consequently, UK legislation which covered the transmission of foreign satellite programmes was contrary to the Directive.
The Television Directive, and especially the aforementioned Article 2(2), will be interpreted by the Court in Joined Cases C-34/95, C-35/95 and C-36/95 Konsumentombudsmannen (see Advocate General Jacob' s Opinion of 17 September 1996). This case concerns the compatibility with Community law of restrictions on television advertising imposed by national law.
a) The EEC-Turkey Association Agreement concerning the application of the social security schemes of EC Member States to Turkish workers and to members of their families was considered in Case C-277/94 Z.Taflan-Met of 10 September 1996. Various Dutch social security benefits were being withheld from Turkish workers on the grounds that the insured risk did not materialize when the person concerned was covered by the legislation. While the Dutch court considered that the plaintiffs could qualify for the benefits under Decision No. 3/80 taken in the framework of the Association Agreement, it was uncertain as to whether the Decision had entered into force as the date of implementation had not been specified. In its decision, the Court of Justice ruled that Decision No. 3/80 entered into force on the date on which it was adopted and had been binding on the contracting parties since that time. In its second question the Dutch court asked the Court whether the Decision, and more particularly Articles 12 and 13 thereof, could have direct effect. The Court considered that this was not possible given the fact that the Decision did not contain a sufficient number of precisely detailed provisions and was intended to be supplemented in the Community by a subsequent act of Council.
b) The issue of equal treatment of men and women came before the Court in Case C-228/94 Atkins of 11 July 1996. This case concerned provisions of the Transport Act of 1985 which empowered local authorities to offer free or reduced-price travel to women over 60 and men over 65. Mr Atkins alleged that this constituted discrimination on grounds of sex contrary to Directive 79/7/EEC. The first question put to the Court was whether the discrimination fell within the scope of the Directive. According to the established case law of the Court, before a benefit falls within the Directive it must constitute the whole or part of a statutory scheme and, secondly, thebenefit must be directly and effectively linked to the protection provided against one of the risks specified in Article 3(1) or a form of social assistance with the same objective. The Court felt that since the concessionary fare scheme was based on a statutory provision it formed part of a statutory scheme. This was so despite the fact that the local authorities were under no duty to implement a concessionary fare scheme, and retained discretion as to the beneficiaries entitled to concessions, and despite the fact that the scheme was not formally part of the national social security rules. Having established that the scheme came within the scope of the Directive, the Court went on to consider whether it provided direct and effective protection against one of the risks specified in Article 3(1). The Court held that this was not the case. In the first place, the Court emphasized that old-age and invalidity were only two of the criteria which could be applied to define the class of beneficiaries. In addition, the Court recalled that the fact that a recipient of a benefit was within one of the situations envisaged in Article 3(1) was not sufficient to bring that benefit within the scope of the Directive. Similarly, the fact that the scheme at issue in the case only benefitted classes of persons who were in situations envisaged by Article 3(1) did not bring that local scheme within the scope of the Directive. Finally, the Court rejected Commission argument that the scope of the Directive extended beyond provisions concerning social security and social assistance to cover social protection as a whole.
In the field of state aids, the Court' s judgment in Case C-39/94 La Poste of 11 July 1996 is very important. The case concerned the legality of the substantial logistical and commercial assistance afforded by La Poste to SFMI and Chronopost, which are two companies governed by private law and controlled by La Poste itself. While the Commission had been asked to consider whether the assistance constituted an illegal state aid, the issue had also arisen before a national court. The national judge asked the Court of Justice whether he should declare: that the national court (1) had no jurisdiction; (2) that the proceedings would be stayed until the Commission had adopted its decision; (3) that the national court had jurisdiction and then safeguard the rights of individuals if there was an infringement by the State. The national judge also asked whether the fact that the Commission had considered the case for more than two years should have any bearing on his decision concerning jurisdiction. The Court first described the system applicable to state aids in the Community and the respective roles of the Commission and the national courts in putting that system into effect. The competence of the national courts arises because the prohibition on the implementation of planned aid laid down in the last sentence of Article 93(3) is directly applicable. On this basis the Court stated that if Article 93(3) is invoked then the national court may rule on the issue even if the matter is also being considered by the Commission, and that the national court is under no obligation to stay the proceedings. If the national court is unsure as to how to interpret the concept of state aid then it should consult either the Commission or the Court of Justice with respect to this matter. In relation to the assistance at issue in the case, the Court stated that such assistance could constitute a state aid. In determining this issue, the decisive question is whether the remuneration received in return is less than that which would have been demanded under normal market conditions. In response to the last question posed by the national court, the Court of Justice ruled that under Community law the recipient of the aid will not incur liability for failing to verify that the aid received was notified to the Commission. However, there is nothing to exclude he application of national law concerning non-contractual liability in such circumstances
In the field of EC environmental law, the Court of Justice has once again been called upon to interpret the provisions of Council Directive 79/409/EEC on the conservation of wild birds. In Case C-44/95, Regina v Secretary of State for the Environment, ex parte Royal Society for the Protection of Birds of 11 July 1996 the Court shed further light on the extent to which a Member State may take economic requirements into account when designating a Special Protection Area (SPA) pursuant to Article 4(1) and 4(2) of the Directive, and the relationship between the Wild Birds' Directive and Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora. In relation to the first point, the Court emphasized that a Member State is not permitted to take account of the economic requirements mentioned in Article 2 when designating a SPA and defining its boundaries. Furthermore, although when designating a SPA Member States are entitled to take account of general interests superior to that represented by the ecological objective of the Directive, economic requirements can never correspond to a superior general interest in this context. The second issue in the ruling concerned Article 6(4) of the Habitats Directive which widens the range of grounds which justify encroaching upon SPA and expressly includes considerations of a social or economic nature within these grounds. In this respect the Court held that although Article 6(3) and (4) of the Habitats Directive amended the first sentence of Article 4(4) of the Birds' Directive, this merely means that Member States may go back on a decision classifying an area by reducing its extent. It does not make any amendment regarding the initial classification of an area as a SPA and this must still be carried out in accordance with the criteria set out in Article 4(1) and (2) of the Birds' Directive.
In relation to public procurement, three Member States have been condemned by the Court for failing to comply with Directive 92/50 with respect to the coordination of procedures for the award of public service contracts. See Cases C-234/95 Commission v France, C-253/95 Commission v Germany and C-311/95 Commission v Greece, all of which were decided on 2 May 1996. Furthermore, on 19 September 1996, the Court held that Greece had failed to comply with Directive 89/665 on the review procedures to be applied to supply and works contracts.
As regards institutional issues, the Court protected the Parliament' s prerogatives in Case C-303/94 Parliament v Council, of 18 June 1996. In the case the Court held that the Council could not add an Annex to Directive 91/414 concerning the placing of plant protection products on the market by adopting a new Directive. The Court considered that the Council could not adopt a new Directive which modified the scope of the obligations imposed on the Member States by the basic Directive, without following the appropriate legislative procedure.
In his opinion of 27 June 1996 in Joined Cases C-192/95 to C-218/95 Comateb, Advocate General Tesauro argued that the Court should change its case law concerning the Member States' right to avoid refunding a tax or duty collected contrary to EC law if the individuals who have paid the illegal tax have obtained an equivalent amount from, for example, the customers. If the Court follows the Advocate General, this will mean that Member States will have to reimburse taxes collected contrary to EC law even when this leads to the unjust enrichment of the taxpayer concerned. Such a change in case law could have important economic implications for several Member States and might place a double burden on the consumer who would have to pay the increased cost of the product and ultimately the reimbursement itself.
A number of other interesting cases have also been decided by the Court.
These include Case C-84/95 Bosphorus of 30 July 1996, which concerns
the implementation of economic sanctions against the Federal Republic of
Yugoslavia. It should be noted that Case C-177/95 Ebony Maritimes still
pending. On 24 September 1996, Advocate General Jacobs delivered an interesting
opinion concerning the effect of the Community' s common commercial policy
in Case 124/95 Centro-Com.
Since 1987, the European Institute of Public Administration (EIPA), Maastricht (NL), in cooperation with the Brookings Institution, Washington, DC, has been organizing twice-yearly seminars on transatlantic relations for officials on both sides of the Atlantic. Once a year, generally in the spring, high-level officials from various US government departments attend a seminar, in Maastricht and Brussels, dealing with major developments within the European Union and the US-EU relationship. In the autumn, representatives from the EU Member States and the EU institutions attend a one-week seminar on the US governmental system, as well as on transatlantic relations. This takes place in Washington, DC.
The organization of these seminars dates back to an initiative taken by EIPA and the Brookings Institution, in the development of which both the former Permanent Representative of the Netherlands to the European Communities, Charles Rutten, and the former US Ambassador to the European Communities, J. Robert Schaetzel, played an important role. Anxious to continue the close transatlantic relationship, the initiators considered it of major importance for representatives on both sides of the Atlantic to have a good understanding of the functioning of one another' s institutions, and that an informal framework should be created within which these representatives could exchange views on issues of common concern. The initiative has received the financial support of the European Commission, the Lercy Trust and the German Marshall Fund of the United States.
Over the years, more than 400 officials from both sides of the Atlantic have participated in this programme. In order to celebrate the tenth anniversary of the programme and to provide participants with the opportunity to meet again and benefit from the mutual exchange of experiences and ideas with other American or European academics, EIPA and Brookings intend to organize a two-day event in the course of 1997 focusing on: Transatlantic Challenges in a New Strategic Environment' .
Since the programme was first launched in 1987, the international environment has changed radically, and the end of the Cold War has fundamentally influenced the US-European relationship, posing new challenges and requiring the adjustment of the existing structures of cooperation. The New Transatlantic Agenda (NTA), adopted at the US-EU Summit in Madrid last December, constitutes a first major step within this adjustment process. The aim of this joint EIPA-Brookings seminar is therefore to focus on the achievements to date and to explore how this relationship can be developed further, within both traditional and new areas of cooperation.
Further details on this forthcoming seminar will be announced in the next issue of EIPASCOPE.