Consumer Protection: Commission Exceeds its Competence
Philip Bentley QC
The Court of First Instance (CFI) has annulled two Commission decisions, one suspending national marketing authorisations for veterinary products containing benzathene benzylpenicillin, and the other ordering amendment of the summary of the characteristics of the medicinal product enalapril. In both cases the CFI found that the Commission had exceeded its competence and trespassed into areas reserved for national competent authorities. The Member States cannot be divested of their residual exclusive competence in matters of purely national authorisations without express provision in the EU Veterinary Products and Human Medicines Codes contained respectively in Directives 2001/82/EC and 2001/83/EC.
Internal Market: France Referred to ECJ Over Biotechnology Legislation
The European Commission has referred France to the European Court of Justice (ECJ) for failing to comply with a 2003 ECJ judgment concerning EU biotechnology legislation. The 2003 judgment found that France failed to correctly and fully transpose Directive 90/219/EEC on the contained use of genetically modified microorganisms (GMMs). The GMM Directive aims to protect human and environmental health from biotechnology laboratory experiments involving GMMs. Following the 2003 judgment and repeated reminders from the Commission, France enacted national legislation that gave partial effect to the GMM Directive, but failed to address certain issues, including certain emergency planning, public communications, and the protection of confidential data. France’s continued failure to give full effect to the GMM Directive prompted its most recent referral to the ECJ. The Commission is also seeking a daily fine of EUR 168,800 as from the date of the Court’s second judgment.
Internal Market: Tobacco Advertising - European Commission Takes Action Against Two Non-Compliant EU Member States
On 1 February 2006 the European Commission sent reasoned opinions to Germany and Luxembourg as a result of their failure to incorporate Directive 2003/33/EC into national law. The Directive prohibits tobacco advertising in print media, on radio and via the internet, and forbids tobacco sponsorship of cross-border events. The aim is to harmonise conflicting national rules and to further the anti-smoking message. Germany sought to have the Directive annulled on the basis that it was passed by the EU legislators in excess of their powers to regulate the internal market under Article 95 EC, although no court hearing has as yet been scheduled. Both countries have two months to comply, failing which the Commission will ask the ECJ to impose fines.
Taxation: German Tax Exemptions for Nuclear Power Stations are Legal
The Court of First Instance (CFI) has declared that the German scheme of tax exemptions applicable to the financial reserves of nuclear power stations for radioactive fuel disposal and plant closure, does not amount to illegal State aid. In 1999 three German electricity production and distribution utilities, competitors of nuclear power stations, requested that the European Commission examine this tax exemption scheme as illegal State aid. After a summary examination the Commission decided the tax exemptions did not amount to illegal State aid. The three public utilities contested the Commission’s decision before the CFI. The CFI ruled that neither the tax exemption scheme for the reserves nor the rules for implementation of the scheme granted the nuclear power stations a specific advantage from the German State so as to amount to illegal State aid.
State Aid: Inquiry into Chupa Chups SA
The European Commission has commenced an in-depth investigation into the Spanish candy producer Chupa Chups SA. Chupa Chups is the holding company of a family owned industrial group established in 1940 that primarily manufactures lollipops. The company recently suffered financial difficulties. As part of a restructuring plan the financial agency of the Catalonia Regional Government (Instituto Catalán de Finanzas) provided a EUR 35 million loan in 2003. After a complaint was submitted to the Commission alleging State aid, further measures in favour of Chupa Chups were revealed by the Spanish authorities. The Commission is concerned that the loan was not granted on arm’s length market conditions; if this is the case there will be a distortion of competition in trade between Member States, and Chupa Chups will have to pay back the aid elements comprised in the transaction.
The European Commission has decided that changes to outstanding payment obligations of Polish telecom operators do not constitute State aid. These liabilities arose from the purchase of telecom licences before the liberalisation of the market for fixed public telephony in Poland in 2001. Following the enlargement of the EU and the implementation of the new Community law, the Polish authorities decided to revise the outstanding licence fee payments. The revision provides for prolongation of deadlines for licence fee payments, debt write-offs and the conversion of outstanding debt into equity shares. The Commission reasoned that since the telecom licences were paid only by the new market entrants and not by the State-owned Polish telecom operator, the revisions to the law do not distort competition as they aim to restore equal conditions for all telecom operators.
Internal Market: Italian Minimum Legal Fees may be Incompatible with EC Law
Two Italian courts have referred questions to the European Court of Justice asking whether Italian legislation fixing minimum and maximum rates for lawyers’ fees is compatible with the EC Treaty’s principle of freedom to provide services. Advocate General Maduro delivered his opinion in the two cases on 1 February concluding that the minimum fees constitute a restriction on such freedom to provide services. This is because they neutralise the competitive advantage of lawyers established outside Italy, by preventing them from providing services in Italy at rates below those minimum levels. Although the aim of ensuring the proper operation of the legal profession is legitimate, the Advocate General found that Italy had not demonstrated how the fixing of minimum fees is appropriate for attaining this objective.
Internal Market: ECJ Rules on Relationship Between the Schengen Agreement and the Free Movement of Persons
The European Court of Justice (ECJ) has issued a decision explaining for the first time the relationship between the Convention Implementing the Schengen Agreement (the “CISA”) and the Community Law on free movement of persons. The case arose when the European Commission brought proceedings against Spain following complaints of two Algerian nationals, married to Spanish nationals and living in the UK and Ireland. The Spanish authorities had refused entry on the grounds that they had been placed in Germany on the list of persons to be refused entry into the Schengen territory. The ECJ ruled that the provisions of the Schengen acquis are applicable only in so far as they are compatible with the Community legislation on free movement of persons. Since the Algerian nationals had right of free movement by reason of their marriage to Spanish nationals, Spain could not refuse entry without establishing that these persons constituted a threat.
Environment: EU Regulation of Fluorinated Greenhouse Gases
The EU Council and the European Parliament have reached agreement at the final ‘conciliation’ stage of EU legislative procedure on a Regulation and a Directive that aim at reducing emissions of fluorinated greenhouse gases. Publication is expected by mid-2006. The Regulation on certain fluorinated greenhouse gases would cover hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. It would set leakage inspection standards for refrigeration, air conditioning and fire fighting equipment and provisions for the recovery of the gases from such equipment. The Regulation would introduce labelling of certain products. Where containment is not feasible or the use of certain fluorinated gases is inappropriate, marketing and use would be banned. The Directive would phase out the use of HFC 134a, the refrigerant currently used in car air conditioning systems, from 1 January 2011 for new vehicle models. The legislation forms part of EU efforts to meet its obligations under the Kyoto Protocol.
NEXT WEEK’S EVENTS
Monday 6 February – Friday 10 February 2006
No Council meetings scheduled for next week.
COURT OF JUSTICE
Joined Cases C-226/04, C-228/04 La Cascina and Zilch
Environment and consumers
C-127/04 Master Declan O'Byrne
Joined Cases C-23/04, C-24/04, C-25/04 Sfakianakis
C-305/03 Commission v United Kingdom
C-415/04 Stichting Kinderopvang Enschede
Joined Cases C-7/05, C-8/05, C-9/05 Saatgut-Treuhandverwaltung
Joined Cases C-182/03, C-217/03 Belgium v Commission
C-399/03 Commission v Council
Joined Cases C-442/03 P, C-471/03 P P&O European Ferries (Vizcaya) v Commission
COURT OF FIRST INSTANCE
T-202/03 Alecansan v OHMI - CompUSA (COMP USA)