User:Kaihsu/IMlawA3

European internal market.

Section A: The scope of the four freedoms.

Chapter 3: Material scope – notion of economic activity.

Notes by Kaihsu Tai, 2011-12-22.

Goods

Objects shipped across a frontier for the purposes of commercial transactions are goods: Case C-2/90 Belgian waste, confirmed in Case C-221/06 Frohnleiten.

If a measure concerns two freedoms, but one is ancillary to the other, only the principal freedom is considered. So, lottery tickets and fishing licences fall under services: Case C-275/92 Schindler, Case C-97/98 Jägerskiöld. But internet-based sale of contact lenses falls under goods: Case C-108/09 Ker-Optika.

Coins no longer legal tender are goods; otherwise they fall within payments: Case 7/78 Thompson.

Persons

Union citizens enjoy equal treatment: Article 18 TFEU; Article 24, Directive 2004/38. EU provisions may result in “reverse discrimination” of own nationals.

Further, workers who is a national of a Member State enjoy the same social and tax advantages as national workers: Article 7(2), Regulation 492/2011. These are defined widely as “all those which, whether or not linked to a contract of employment, are generally granted to national workers primarily because of their objective status as workers or by virtue of the mere fact of their residence on the national territory and the extension of which to workers who are nationals of other member states therefore seems suitable to facilitate their mobility within the [EU]”: Case 207/78 Even (war pension). For example: Case 65/81 Reina (childbirth grant), Case C-237/94 O’Flynn (funeral expenses). They do not need to flow directly from the employment: Case 63/76 Inzirillo (handicap allowance).

But distinguish from social security benefits, governed by Regulation 1408/71 with the same equality of treatment (Article 3) and defined at Article 4.

Neither covers war benefits: Even, Case C-315/94 de Vos, Case C-386/02 Baldinger. But restrictions should not impinge on the freedom of movement: Case C-192/05 Tas-Hagen and Tas, Case C-499/06 Nerkowska, Case C-221/07 Zablocka-Weyhermüller.

A child of an EU migrant worker, along with its carer, can remain in the host state to receive education: Case C-413/99 Baumbast and R, Case C-310/08 Ibrahim, Case C-480/08 Teixeira. See more widely Case C-34/09 Ruiz Zambrano.

Services and establishment

Services (defined residually in Article 57 TFEU) “are normally provided for remuneration”; see also Directive 2006/123 (Services Directive). Payment is not necessarily by the recipient: Case 352/85 Bond van Adverteerders. An activity without payment is beyond the scope: Case C-159/90 SPUC v Grogan; but expense allowance for teaching falls within: Case C-281/06 Jundt. Despite the authorization requirement provided in Regulation 883/2004), “health tourism” such as those by UK NHS patients fall within the scope of services, but reimbursement only up to objective treatment cost: earlier cases such as Case C-157/99 Smits and Peerbooms confirmed in Case C-372/04 Watts.

Establishment and services are mutually exclusive: Case C-55/94 Gebhard, Case C-456/02 Trojani. Establishment is distinguished by permanent presence: Case 205/84 German insurance services, confirmed in Gebhard as “stable and continuous participation in the economic life of the host Member State”.

Capital

ECJ often relies on Directive 88/361 for the distinction between capital and other freedoms: Case C-98/01 Commission v UK (BAA special shares). Current payments do not fall within free movement of capital: Case 286/82 Luisi and Carbone.

The distinction is often blurred and effects cumulative with movement of persons (services, establishment). In Case C-118/96 Safir on taxation of life insurance premiums, services rules were applied despite its residual nature instead of capital rules; likewise Case C-356/08 Austrian doctor bank accounts. Rules on capital and on services can apply to the same economic activity: Case C-484/93 Svensson and Gustavsson, Case C-279/00 Italian temporary labour. National rules affecting primarily services does not require consideration of consequential effects on capital: Case C-452/04 Fidium Finanz; and vice versa: Case C-233/09 Dijkman and Dijkman-Lavaleije.

Capital rules do not have to be examined if it is a corollary of establishment by shareholding: Case C-196/04 Cadbury Schweppes, Case C-524/04 Thin Cap Group. The distinction is in whether there the shareholdings “enable the holder to have a definite influence on a company’s decisions and to determine its activities”: Case C-157/05 Holböck. In Case C-531/06 Italian pharmacies, both capital and establishment rules were examined.

Economic activity

The freedoms cannot be relied upon to object municipal restrictions prohibiting non-residents from cannabis shops, but the consequential loss in sales of non-alcoholic beverages and food can be challenged using services rules; such restriction of services freedom is “justified by the objective of combating drug tourism and the accompanying public nuisance”: C-137/09 Josemans.

Services “are normally provided for remuneration”. This is widely interpreted to include e.g. lottery and gambling: Schindler, C-338/04 Placanica. Grant of right to hunt in return for payment is an economic activity: Case C-70/09 Hengartner and Gasser.

Publicly-funded secondary technical education is excluded thence: Case 263/86 Humbel. “Conversely, courses given in an establishment of higher education which seeks to make an economic profit and which is financed essentially out of private funds, particularly out of payments made by students or their parents, do constitute services”: Case C-109/92 Wirth; see also Case C-76/05 Schwarz and Gootjes-Schwarz, Case C-318/05 German school fees.

Sport “is subject to [EU] law in so far as it constitutes an economic activity”: Case C-415/93 Bosman. But national selection does not in itself “constitute a restriction on the freedom to provide services”: C-191/97 Deliège.

Establishment “involves the actual pursuit of an economic activity through a fixed establishment in another Member State for an indefinite period”: Case C-221/89 Factortame II.