Tag: Free movement

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Regione Veneto v Plan Eco. CJEU restricts waste classification shopping for mixed municipal wastes.

Judgment in Case C-315/20 Regione Veneto v Plan Eco Srl Is a classic case discussing the scope for Member States to restrict transboundary movements of waste under the Waste Shipments Regulation 1013/2006 (‘WSR). As summarised (2) by Advocate General Rantos, it raises the question whether the classification, in one Member State, of mixed municipal waste in accordance with the European Waste Catalogue (EWC), following mechanical treatment which has not substantially altered the original properties of that waste, interferes with the application of the EU legislation on the shipment of that waste to another Member State.

Transport company Plan Eco submitted to the Veneto Region a request for prior consent to the shipment of 2000 tonnes of mixed municipal waste produced in Italy by Futura Srl to a cement factory in Slovenia (cement kilns are a classic destination for waste for combustion). That waste, of which parties agreed it was not hazardous, was treated mechanically by Futura, with a view to its use in co-combustion, and classified by Futura, after that treatment, under code 19 12 12 (Bottom ash and slag (incinerator bottom ash)) of the EWC. The Veneto Region suggested the waste was mixed municipal waste (code 20 03 01 EWC) and objected to shipment on the grounds that national waste management plans prescribe that mixed municipal waste be recovered in one of the nearest appropriate installations to the place of its production or collection. A Veneto Region facility had  signalled it had capacity to deal with the waste. A classic scenario therefore of a region wanting to keep the waste within its borders so as to satisfy the waste need for local installations.

The Waste Shipments Regulation had, controversially, inserted Article 3(5) which provides that shipments of ‘mixed municipal waste (waste entry 20 03 01) collected from private households, including where such collection also covers such waste from other producers, to recovery or disposal facilities’ are, in accordance with that regulation, subject to the same provisions (Article 11’s principles of self-sufficiency and proximity in particular) as shipments of waste destined for disposal: that means, it gives national and regional authorities more room for manoeuvre to refuse shipments than they would have for waste destined for recovery operations. The Court had earlier (Case C-292/12 Ragn-Sells) confirmed that applicability of Article 11 WSR in principle, without properly addressing the free movement of goods and free movement of services implications.

[27] the Court turns, frustratingly (for in my view binding statutory law should be included in the provisions proper of secondary law, not in their recitals) to Recital 33 of the Waste Framework Directive 2008/98, to hold that mixed municipal waste as referred to in Article 3(5) WSR remains mixed municipal waste even when it has been subject to a waste treatment operation that has not substantially altered its properties. Veneto’s room for refusal therefore widens.

The judgment in this case takes on a new meaning within the context of Brexit, for quite a few of these waste streams have the United Kingdom as their ultimate destination, hence enjoying principled free movement of goods under WTO and UK-EU Trade and Co-operation Agreement rules.

Geert.

 

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Szpunar AG in All in one Star ltd. The corporate mobility jigsaw continues to be laid.

This post has been in my draft folder a long time for First Advocate General Szpunar opined Mid-October in C-469/19 All in One Star Ltd. Still worth a flag, with the CJEU presumably soon issuing judgment. The case concerns the refusal of German authorities to enter a branch of a UK-incorporated company, in the German commercial register.  C-106/16 Polbud is the most recent major case on the issue.

The Opinion follows the (slow) progress of positive harmonisation of EU company law, with Directive 2017/1132 core to the questions. The AG opined that that Directive does not preclude a national provision under which the managing director of the company has to provide an assurance that there is no barrier to his personal appointment under national law in the form of a prohibition, ordered by a court or public authority, on practising his profession or trade. However he suggests the Treaty provisions on free movement oppose the authorities of destination requesting the director provide assurances that a notary, a representative of a comparable legal advisory profession or a consular officer has confirmed such absence of obstacle to him.

The AG was asked by the CJEU not to discuss the other question: whether a Member State may insist upon indication of the amount of share capital or a comparable capital value, for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register. Presumably because the answer is clearly ‘No’ in light of earlier case-law.

Clearly following Brexit (the TCA as far as I am aware has no straight free movement principles for corporations) the issue will be different for UK corporations however it will continue to present itself in light of the intra-EU competition in corporate law.

Geert.

EU Private international law, 3rd ed 2021, Chapter 6.

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Booze bikes banned from Amsterdam. Time for a pousse-cafe: the EU law analysis that never was.

At the end of October the Rechtbank Amsterdam held that ‘booze bikes’ can be kept from parts of Amsterdam. The municipality had resorted to the ban both to address congestion (the bikes are slow and chunky; the roads in the part of Amsterdam concerned, narrow) and rowdiness (the bikes are often used for stag parties and let’s just say that the ‘bike’ part of the trip is not the one that attracts its users). In my experience (from a resident’s point of view) these bikes are a bit like Brexit: attractive for five minutes to some; a right nuisance for the remainder of the journey.

In 2009 I wrote a short piece reflecting on use restrictions from an EU point of view. In it I refer ia to C-142/05 Mickelsson and to C-110/05 Commission v Italy (motorcyle trailers) – my analysis and that of Peter Oliver may be applied here mutatis mutandis. The degree to which lawfully marketed products may be restricted in their use has so far not entertained the Court of Justice in great numbers. Yet the use of such restrictions is bound to increase, with local authorities in particular imposing restrictions for environmental, public health and other ‘sustainable development’ purposes. Witness e.g. Venice banning wheeled suitcases, historic city centres banning diesel cars etc.

In the booze bike case the Court at Amsterdam (at 2.9) simply said that applicants should have provided detail of their argument as to why the ban might contravene EU law. Expect a second round on similar cases at some point.

Geert.

 

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Free movement of companies and Polbud. The CJEU is not for turning.

When I reviewed Kokott AG’s Opinion in C-106/16 Polbud, I flagged that Ms Kokott concluded that the freedom of establishment provided for in Articles 49 and 54 TFEU only applies to an operation whereby a company incorporated under the law of one Member State transfers its statutory seat to another Member State with the aim of converting itself into a company governed by the law of the latter Member State, in so far as that company actually establishes itself in the other Member State, or intends to do so, for the purpose of pursuing genuine economic activity there. In other words she proposed a test along the lines suggested by Darmon AG in Daily Mail, but rejected by La Pergola AG in Centros.

The CJEU today held along La Pergola lines. It thus indeed facilitates forum /applicable (lex societatis) shopping (argument made also by Gillis Lindemans) for companies. The writing was very clearly on the wall when the Court (in Grand Chamber nota bene) started citing the old chestnuts of Daily Mail, Centros and Inspire Art. That no business is actually being conducted by Polbud in the host Member State is viewed by the court as irrelevant (at 37 ff). In the absence of harmonisation of EU law, the definition of the connecting factor that determines the national law applicable to a company or firm falls, in accordance with Article 54 TFEU, within the powers of each Member State (at 34).

Freedom of establishment is applicable (third question);  that freedom has been restricted (first question); and that restriction (transfer of the registered office of a company incorporated under the law of one Member State to the territory of another Member State, for the purposes of its conversion into a company incorporated under the law of the latter Member State, in accordance with the conditions imposed by the legislation of that Member State, is subject to the liquidation of the first company) is not justifiable (second question).

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 7.

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Kokott AG in Polbud. It walks and talks like confirming precedent. But does it?

This post could have also carried the title ‘Pro real seat theory. Bud is it?’ [Polbud, Probud, you see…], but with all the Brexit shenanigans going on on Twitter I am somewhat running dry of pun headlines.

I do indeed wonder the following: Kokott AG Opined in C-106/16 Polbud on 4 May, Gillis Lindemans pondered the Opinion (in Dutch) early May – I’have had the Opinion and one or two other things on my mind since.

As Ms Kokott summarises, the present request for a preliminary ruling concerns Polbud’s plan to change its legal form to that of a private limited liability company governed by Luxembourg law. Since Luxembourg, like all other Member States, requires as a condition of incorporation and continued existence under national law that companies have a statutory seat in national territory, such a plan necessarily entails the transfer of Polbud’s statutory seat. Indeed, this appears to have been achieved inasmuch as Consoil was entered in the Luxembourg Companies Register. It must now be clarified, in essence, whether the freedom of establishment precludes that arrangement. What sets the situation in this case apart is the fact that, according to the information contained in the request for a preliminary ruling, the cross-border conversion is not accompanied by a change to the centre of the company’s commercial activities. The referring court asks whether, in that context, the freedom of establishment is applicable (third question), whether that freedom has been restricted (first question) and, if so, whether that restriction is justifiable (second question).

The AG takes us through relevant precedent (readers of the blog will have seen my reviews at the time of judgment): one is best left to simply read her Opinion.  Ms Kokott concludes that the freedom of establishment provided for in Articles 49 and 54 TFEU only applies to an operation whereby a company incorporated under the law of one Member State transfers its statutory seat to another Member State with the aim of converting itself into a company governed by the law of the latter Member State, in so far as that company actually establishes itself in the other Member State, or intends to do so, for the purpose of pursuing genuine economic activity there.

In other words she most  definitely proposes a test along the lines suggested by Darmon AG in Daily Mail, but rejected by La Pergola AG in Centros. So far, so good: AG’s often propose a change of tack, most famously Poiares Maduro in Cartesio. Except, Ms Kokott suggests the Opinion is a simple confirmation of the CJEU’s case-law on the issue: no change of tack. Simply confirmation ex multi. That now does leave me puzzled: the Opinion walks and talks like confirming old precedent; but it does not, surely?

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 7.

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Amino acids, foodstuffs and precaution. The CJEU disciplines Member States in Queisser Pharma.

There is as yet no EU harmonisation on amino acids, in so far as they have a nutritional or physiological effect and are added to foods or used in the manufacture of foods. A range of EU foodlaws therefore do not apply to national action vis-a-vis amino acids, in particular Regulation 1925/2006 – the food supplements Regulation. In the absence of specific EU law rules regarding prohibition or restriction of the use of other substances or ingredients containing those ‘other substances’, relevant national rules may apply ‘without prejudice to the provisions of the Treaty’.

In C-282/15 Queisser Pharma v Germany, moreover there were no transboundary elements: Articles 34-36 TFEU therefore do not in principle apply.

No doubt food law experts may tell us whether these findings are in any way unusual, however my impression is that the Court of Justice in this judgment stretches the impact of the ‘general principles of EU food law’ as included in Regulation  178/2002. Indeed the Court refers in particular to Article 1(2)’s statement that the Regulation lays down the general principles governing food and feed in general, and food and feed safety in particular, at EU and national level (my emphasis). Article 7 of the Regulation is of particular relevance here. That Article gives a definition of the precautionary principle, and consequential constraints on how far Member States may go in banning foodstuffs, as noted in the absence of EU standards and even if there is no cross-border impact.

Article 7 Precautionary principle

1. In specific circumstances where, following an assessment of available information, the possibility of harmful effects on health is identified but scientific uncertainty persists, provisional risk management measures necessary to ensure the high level of health protection chosen in the Community may be adopted, pending further scientific information for a more comprehensive risk assessment.

2. Measures adopted on the basis of paragraph 1 shall be proportionate and no more restrictive of trade than is required to achieve the high level of health protection chosen in the Community, regard being had to technical and economic feasibility and other factors regarded as legitimate in the matter under consideration. The measures shall be reviewed within a reasonable period of time, depending on the nature of the risk to life or health identified and the type of scientific information needed to clarify the scientific uncertainty and to conduct a more comprehensive risk assessment.

Germany on this point is probably found wanting (‘probably’, because final judgment on the extent of German risk assessment is left to the national court) – reference is best made to the judgment for the Court’s reasoning. It is clear to me that the way in which the Regulation defines precaution, curtails the Member States considerably. Further ammunition against the often heard, and wrong, accusation that the EU is trigger happy to ban substances and processes in the face of uncertainty.

Geert.

 

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Bogendorff von Wolffersdorff: The CJEU limits name shopping.

Does Article 21 TEU on EU citisenship, facilitate one’s acquiring names bearing the tokens of nobility, acquired in one Member State (here: the flexible ‘deed poll’ regime available to citisens of the United Kingdom), for subsequent use in another Member State less keen on such (token or real) titles? In Case C-438/14 Bogendorff the CJEU held that it does not.

Applicant at issue had acquired UK nationality over and above German nationality (which he held by birth). Subsequent adoption but especially vanity had led to a change in first name and surname by deed poll, a very flexible name change regime available to UK citisens. German authorities however refused to recognise the name change upon the occasion of registration of applicant’s daughter, citing public order considerations in particular Germany’s long-standing objection against aristocratic titles, real or vanity, so as to emphasise equality before the law.  The court’s approach on free movement and names in my view has taken a better turn since Vardyn, Case C-391/09, where it left its insistence that only copy /paste recognition of names by authorities in other Member States can safeguard citisens free movement rights.

In the case of aristocratic titles, however, the court has always recognised in particular Austria’s and Germany’s right to extend domestic policies to incoming citisens, on the basis of public policy considerations. Current case differs from Sayn-Wittgenstein, C‑208/09. The latter concerned Austrian law, which has a strict prohibition on the use and transmission of titles of nobility. Under German law by contrast all privileges and inequalities connected with birth or position have been abolished in Germany. Titles of nobility which were actually borne when the Weimar Constitution entered into force may continue as elements of a name and may be transmitted as a fact of personal status. The creation of new titles of nobility and the grant of such titles are prohibited.

Hence for Germany to refuse to recognise such titles where they have been accidentally obtained abroad (by birth, marriage or adoption) would run counter EU citisenhip. By contrast, it would run counter to the intention of the German legislature for German nationals, using the law of another Member State, to adopt afresh abolished titles of nobility. Systematic recognition of changes of name such as that at issue in the main proceedings could lead to that result.

Name dropping undoubtedly will continue. Name shopping has been halted.

Geert.

 

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Cheers to that! The CJEU on excise duties, alcohol, packaging and regulatory autonomy in Valev Visnapuu.

Postscript 10 December 2015 For a similar exercise, see Sharpston AG in C-472/14 Canadian Oil.

Less is sometimes more so I shall not attempt to summarise all issues in Case C-198/14 Valev Visnapuu. The case makes for sometimes condensed reading however it perfectly illustrates the way to go about dealing with obstacles to trade put in place for environmental, public health or, as in this case, both reasons.

Mr Visnapuu essentially forum shops Estonia’s lower prices on alcohol by offering Finnish clients home delivery of alcoholic beverages purchased there. No declaration of import is made to Finish customs and excise, thereby circumventing (accusation of course is that this is illegal) a variety of excise duties imposed for public health and environmental reasons, as well as a number of requirements relating to retail licenses and container requirements (essentially a deposit-return system) for beverages.

Confronted with a demand to settle various tax debts, as well as with a suspended prison sentence, Mr Visnapuu turns to EU law as his defence in a criminal proceeding. The CJEU then had to settle a variety of classic trade and environment /public health questions: whether the packaging and packaging waste Directive is exhaustive on the issue of deposit-return system (answer: no and hence the system additionally needs to be assessed vis-a-vis EU primary law: Article 34 ff TFEU or Article 110 TFEU); whether in the context of that Directive excise duties on packaging may be imposed (yes) and packaging integrated into a functioning return system exempt (yes; in the absence of indications that imported systems are less likely to enjoy the exemption); whether the relevant excise duties fall under Article 34 ff TFEU or Article 110 TFEU (answer: it is part of an internal system of taxation hence needs to be judged vis-a-vis Article 110 TFEU); and finally whether the retail licence requirement needs to be judged viz Article 34 or Article 37 TFEU (answer: mixed, given the various requirements at stake). Final judgment on proportionality is down to the Finnish courts.

Readers in need of a tipple would be advised to postpone until after reading the judgment. Again though the case shows that if one keeps a clear head, classic structures of applying EU law go a long way in untangling even complex matters of law and fact.

Geert.

 

 

 

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A break on the Commission’s efforts to harmonise tax through the backdoor? Kokott AG in X

Postscript December 2014: the ECJ held on 18 december in favour of The Netherlands. Idem in Q.

Postscript 2 October 2014: the AG opined along similar lines in Q, with respect to a question also referred by the hoge Raad, as follows: ‘Does the importance of the conservation of national natural heritage and cultural heritage, as addressed in the Natuurschoonwet 1928 (Law on nature protection 1928), constitute an overriding reason in the public interest which justifies a scheme whereby the application of an exemption from gift tax (recovery facility) is limited to estates situated in the Netherlands?’

In X, Case C-87/13, the Hoge Raad of the Netherlands asked in essence whether  EU law, in particular the rules on freedom of establishment and on free movement of capital, preclude[s] a resident of Belgium who, at his request, is taxed in the Netherlands as a resident and who has incurred costs in respect of a castle, used by him as his own home, which is located in Belgium and is designated there as a legally protected monument and village conservation area, from deducting those costs in the Netherlands for income tax purposes on the grounds that the castle is not registered as a protected monument in the Netherlands?

Kokott AG opined on 4 September last (the Opinion at the time of writing was not yet available in English) and suggested The Netherlands should be allowed to go ahead with such distinction. She focussed her opinion on the free movement of establishment, suggesting the same analysis applies mutatis mutandis for free movement of capital.

A summary of the Court of Justice’s case-law on the main exceptions to the free movement of capital (and, also per Kokott AG, similarly applicable to free movement of establishment), may be found in par. 42 of Jaeger, Case C-256/06:

According to the case-law, in order for national tax legislation such as that at issue in the main proceedings, which, for the purposes of calculating inheritance tax, distinguishes between assets situated in another Member State and those situated in Germany, to be considered compatible with the provisions of the Treaty on the free movement of capital, the difference in treatment must concern situations which are not objectively comparable or be justified by overriding reasons in the general interest.

The Advocate General suggested the Court find the two situations objectively comparable, given that listed property in both countries is likely to be subject to various restrictions. Simply quoting budgetary reasons for limiting the possibility of tax offset to assets in the State of taxation is not enough under EU law. However she did find merit in the argument that the limitation to listed property in The Netherlands, is in the general interest: in contrast with other cases (e.g. Petersen C-544/11), the general interest identified by the Member State concerned, cannot be met by market participants in other Member States (at 41): allowing set-off for maintenance of listed property in another Member State, does not serve the goal of preserving Dutch national heritage, a relevant interest illustrated eg. by the references to national  heritage in Articles 36 and 167 TFEU.

If adopted by the Court, the AG’s Opinion in my view would be very welcome. The EC have been using an extensive interpretation of the free movement of capital essentially to skate around its limited progress in tax harmonisation (which is subject to national veto).

Geert.

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Ragn-Sells: Court leaves open violation of primary EU law by waste shipments Regulation – Free movement of services question left unanswered

The ECJ’s December judgment in Ragn-Sells Case C-292/12 came recently to my attention in revisiting the waste ownership and freedom to provide services question for a brief.  The case concerns the combined application of the waste framework Directive, the waste shipments Regulation, the public procurement Directives, the free movement of goods and of services, and, for good measure, competition law, exclusive rights and abuse of dominant position.

The dispute in the main proceedings concerns the lawfulness of contract documents stipulating that mixed municipal waste had to be transported to the landfill facility which was the subject-matter of an earlier public procurement procedure — located 5 km from the contracting town, whilst industrial and building waste was to be taken to a landfill site, located 25 km away.

Not all of these issues were addressed by the ECJ, though: for the issue relating to competition law /creation of exclusive rights which might lead to abuse of dominant position, not enough information had been furnished by the national court.For the issue of free movement of services, there was nothing in the file submitted to the Court indicating that undertakings established in other Member States have been interested in treating waste produced in the territory of the municipality at issue.

The latter especially is a pity (on the competition issue there is plenty of case-law): for the extent of free movement of services in the waste sector (and environmental services generally), is not at all clearly laid out in case-law. Hint for those wanting to use free movement of services arguments in their struggle against restrictive national measures: ensure paper trail of, or indeed if need be, trigger, foreign interest in the waste streams provided.

The Court did entertain the free movement of goods questions. As regards, first of all, waste destined for disposal operations and mixed municipal waste, it follows, the Court held, from Article 11(1)(a) of Regulation No 1013/2006, read in the light of recital 20 in the preamble thereto, and Article 16 of Directive 2008/98, that the Member States may adopt measures of general application restricting shipments of that waste between Member States, in the form of general or partial prohibitions of shipments, by way of implementation of the principles of proximity, priority for recovery and self-sufficiency under Directive 2008/98. By analogy the court then applied Case C‑209/98 Sydhavnens to find eventually that ‘Accordingly, in the case of waste destined for disposal operations and mixed municipal waste collected from private households and, as applicable, other producers, a Member State may confer on local authorities, on the geographical scale it deems appropriate, powers to manage the waste produced on their territory in order to ensure compliance with its obligations under Article 16 of Directive 2008/98. Those authorities may, as part of the powers conferred upon them, provide that those types of waste will be treated in the nearest appropriate facility (at 63).

I continue to argue that especially with respect to mixed municipal waste, this room for manoeuvre provided for by the Regulation combined with the Directive, itself is incompatible with primary EU law. However I am not sure how much longer I can argue that as a result of judicial economy, the ECJ has never really properly addressed this question.

As regards, secondly, shipments of waste destined for recovery operations, other than mixed municipal waste, the Court by contrast held that the combined effect of Regulation and Waste Framework Directive does not provide for the possibility for a national authority to adopt a measure of general application having the effect of prohibiting, totally or partially, shipments of such waste to other Member States for treatment.

In summary, some remaining doubt re free movement of goods (primacy EU law) in my mind. Undoubtedly a lot of remaining doubt re free movement of services. Waste law and free movement: they continue to fascinate!

Geert.

 

 

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