Class notes
European Law seminar answers
- Course
- Institution
Answers to all European Law seminar assignments
[Show more]
Seller
Follow
isaroede
Reviews received
Content preview
Week 1Question 1
Notaxis, a French investment bank, wants to open subsidiaries in the city centre of The Hague to be
close to prospective clients. The city of The Hague wants to make sure that its inhabitants can profit
from these services in their native language. Therefore, foreign financial undertakings are not allowed
to take up office in the city centre without employing at least 50% Dutch-speaking personnel. This
requirement does not apply for Dutch financial undertakings.
a) Examine whether this rule is allowed in light of the relevant EU legislation and case law.
IRAC
Issue: Notaxis, a French investment bank: want to open subsidiaries in The Hague. The Hague says
that at least 50% of the employers need to speak Dutch. Is this allowed?
1. Is the rule about the 50% consistent with EU law based on case law and establishment law?
2. What justifications can we bring forward?
Rules:
Step 1: Does EU law apply at all? Personal and material scope.
First criteria: Nationality of the persons involved. Are the players from an EU member state?
They need to be nationals of an EU member state. In this case France.
o Is there a cross border element? If there is no crossing of a border there is no EU
influence. In this case: Netherlands and France, so there is a cross border element.
Second criteria: interstate element. The situation must not be ‘wholly internal’, i.e. confirmed
within a single Member State. The parties must be established in different Member States.
Exceptionally, wholly internal situations may be covered by EU Law (e.g. harmonized
legislation).
Both criteria are met here given that the situation concerns a French legal entity wishing to
commence an economic activity in the Netherlands.
o Is there economic activity? Yes, a French bank trying to do business in the Netherlands. The
EU was originally made for economic cooperation. The freedoms are economic freedoms.
The essence of the EU is still an economic activity. If you don’t have an economic activity,
you can’t use the freedom.
We can now start by looking into European Law. Primary law: treaties.
Both criteria are met here given that the situation concerns a French legal entity wishing to commence
an economic activity in the Netherlands.
Step 2.1: Do any of the specific EU Treaty provisions on the internal market apply?
First criteria: Personal scope of application. The affected parties need to fall within the
personal scope of a Treaty Provision. Do the French people fall under this scope? Look at art. 49 and
46. Either they need a self-employed activity or …
Bothe articles apply to both persons. For our case this means that these rules apply.
Second criteria: material scope of application. The intended economic activity must be covered by the
protective scope of a Treaty provision.
Art. 49 TFEU: aims to abolish restrictions on freedom of primary and secondary establishment of
nationals and corporations of a Member State in the territory of another Member State.
Art. 56 TFEU: aims to remove barriers to cross border provisions of services by natural persons…
,Is it a service or establishment?
The distinction between establishment or services is based on the permanent or temporary character of
the pursued economic activities.
The criteria for this distinction are laid down in Gebhard: the concept of establishment entails the
participation on a stable and continuous basis, in the economic life of a Member State other than the
Member State of origin (para. 25). Especially for companies, establishment takes place either: a)
through the transfer of its centre of business to another Member State (primary) or b) the setting up
and operation of undertaking such as agencies, branches of subsidiaries on that Member State
(secondary) (para. 23 and 24).
In contrast, the provision of services entails the carrying out of an economic activity on a temporary
basis (par. 26).
This temporary nature of the relevant activities shall be assessed on the basis not only of the duration
of the provision of the service, but also of its regularity, periodicity or continuity. The provision of
services does not ceases to be temporary simply because the provider equips himself with some form
of infrastructure (eg. An office of chambers) that is necessary to perform these services. (para. 27).
In this case, Notaxis seeks to pursue its service activities by opening subsidiary companies in the
Netherlands. This demonstrates an intension to seek establishment in the host Member State.
Gebhart case r.o. 25: person (…) Establishment
Gebhart case r.o. 26: (…) Service
Establishment: continues and stability
Service: temporary nature: you go back to your member state, you don’t establish yourself in
another member state.
In this case: establishment: they want to open an office. They want to go from France to the
Netherlands, it’s continuous
Step 2.2: Is any secondary legalisation applicable?
If a case falls within the personal and material scope of both a Treaty provision and secondary EU law,
the latter takes precedence based on the legal maxim ‘lex specialis derogate legi generali’.
First criteria: personal scope of application: The affected party needs to fall within the personal scope
of a piece of secondary legalisation. Notaxis is a provider of financial services registered under French
law, seeking to supply its services in the Netherlands by exercising its freedom of establishment.
Second criteria: material scope of application: The intended activity needs be protected by the
respective secondary legalisation. Art. 2 (2)(d) SD (services directive) explicitly excludes the
provision of financial services, such as banking, from its scope of application.
Because it’s an establishment article 49 TFEU is applicable. Lex specialized: something more
specialized, than the general rule. In this case the service directive.
Secondary legislation: Service directive
Service directive, article 2 sub 2b If its applicable. Financial services such as banking. This means
that the lex specialis (directive) is not applicable in our case. This means we’re left with the treaty
rules, article 49 TFEU.
Step 3: Is the rule allowed under art. 49 TFEU?
Discriminatory or indistinctly applicable rule?
, Art. 49 emphasizes the requirement of equal treatment of nationals and non-nationals. Therefore, a
measure restricting the freedom of establishment within the territory of a member State is prohibited if
it discriminates, directly or indirectly, on grounds of nationality.
Is art. 49 limited to instances of discrimination?
No, it also encompasses national rules which apply equality, in law and in fact, to nationals and non-
nationals, provided that they can hinder or make less attractive the exercise of the freedom of
establishment (Gebhard para. 37).
This will be the case when the non-discriminatory provisions do not effect in the same manner
domestic entities and entities from other Member States.
Market access rights may not be restricted. Discrimination on grounds of nationality is prohibited
according to article 49 TFEU. In the Gebhard case is decided that member states may impose certain
requirements for taking up of activities which, in principle, nationals of another member state must
comply with, however those requirements that may impede the exercise of the fundamental freedoms
guaranteed in the treaty must meet 4 requirements. The first one is that no form of discrimination may
be applied.
Article 49 TFEU: Market excess may not be restricted. In this case there is a restriction for market
excess.
Direct discrimination: Based on nationality
Indirect discrimination: Degrees
Three types of restrictions:
1. Direct discrimination Based on nationality.
2. Indirect discrimination Rule for everyone, but it makes it harder for foreigners to have
excess to the market. So, it makes it harder for foreigners.
3. Non-discriminatory: Obstacle makes it difficult Even if there is no discrimination, if it
makes it harder to access the market, it is discrimination.
In this case: direct discrimination: it only applies to foreigners. It is thus actively made based on
nationality; it is not for Dutch banks.
Is this allowed on basis of article 49 TFEU? Any restriction is prohibited.
The distinction between the types of restriction is based on justification, this is why we define the
restrictions (direct, indirect).
Two types of justifications:
1. Treaty justifications: written down in the treaties, “it’s prohibited unless ...” Article 51, 52
TFEU limited four grounds that you can use in order to justify discrimination.
2. Rule of Reason: case law. Case Gebhard par. 37
Rule of reason:
a. Non-discriminatory
b. Reason of public interest Any public interest is allowed.
c. No harmonization
d. Suitability
e. Proportionality
What is the difference between the treaty justification and the rule of reason?
For the Rule of Reason, the grounds aren’t limited, as long as it is public interest. On the other hand,
art. 51 and 52 TFEU: there are four limited grounds.
When the rule itself is direct discrimination, then you can’t use the rule of reason, as it needs to be
applicable for everyone. If its applicable for everyone, you can use the rule of reason.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller isaroede. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.97. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now