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Public Services in EU Trade and Investment Agreements pp 177–205Cite as

Safeguarding Public Services: Exceptions and Derogations of the Internal and External Frameworks

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Part of the book series: Legal Issues of Services of General Interest ((LEGAL))

Abstract

This chapter represents the final step of the book’s coherency assessment. It compares the exceptions found in the external and internal frameworks together with their relevance for public services. There are two parts to this comparative exercise. The first part, undertaken in Sects. 6.2 and 6.3, is a comparison of the objective scope of the exceptions found in either framework. While the exceptions of the external framework are revealed to be narrow and rigid, those of the internal framework are broader and of greater relevance to public services. The second part, found in Sect. 6.4, is to examine how the identified exceptions are to be applied and by whom. While there is significant more certainty as to how the relevant provisions of the internal framework will be applied, this is not the case for the external framework. Finally, Sect. 6.5 summarises the book’s main findings on the coherency of the internal and external frameworks.

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Notes

  1. 1.

    The justified derogations of the GATS are discussed in Sect. 2.5.4 of Chap. 2.

  2. 2.

    WTO Secretariat 2005, p. 48.

  3. 3.

    Arena 2015, p. 40.

  4. 4.

    Agreement establishing an Association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part, [2002] OJ L352/3 (hereinafter ‘EU-Chile’), Article 135(1); Economic Partnership, Political Coordination and Cooperation Agreement between the European Community and its Member States of the one part, and the United Mexican States of the other part, [1997] OJ C350/7, Article 5.

  5. 5.

    Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part, [2005] OJ L267/1 (hereinafter ‘EU-Algeria’), Article 27; Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part, [2004] OJ L304/38 (hereinafter ‘EU-Egypt’), Article 26; Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the State of Israel, of the other part, [2000] OJ L147/1 (hereinafter ‘EU-Israel’), Article 27; Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Hashemite Kingdom of Jordan, of the other part, [2002] OJ L129/1 (hereinafter ‘EU-Jordan’), Article 27; Euro-Mediterranean Agreement establishing an association between the European Community and its Member States of the one part, and the Republic of Lebanon, of the other part, [2006] OJ L143/1 (hereinafter ‘EU-Lebanon’), Article 27; Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, [2000] OJ L70/2 (hereinafter ‘EU-Morocco’), Article 28; Euro-Mediterranean Interim Association Agreement on trade and cooperation between the European Communities and the PLO for the benefit of the Palestinian Authority of the West Bank and Gaza Strip, [1997] OJ C128/2 (hereinafter ‘EU-Palestine’), Article 24; Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Tunisia, of the other part, [1998] OJ L97/2 (hereinafter ‘EU-Tunisia’), Article 28.

  6. 6.

    Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Albania, of the other part, [2009] OJ L107/2 (hereinafter ‘EU-Albania’), Article 42; Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and Bosnia and Herzegovina, of the other part, [2015] OJ L164/1 (hereinafter ‘EU-Bosnia’), Article 43; Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the former Yugoslav Republic of Macedonia, of the other part, [2004] OJ L84/13 (hereinafter ‘EU-Macedonia’), Article 41; Stabilisation and Association Agreement between the European Communities and their Member States of the one part, and the Republic of Montenegro, of the other part, [2010] OJ L108/3 (hereinafter ‘EU-Montenegro’), Article 45; Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Serbia, of the other part, [2013] OJ L278/16 (hereinafter ‘EU-Serbia’), Article 45.

  7. 7.

    Economic partnership agreement between the West African States, the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA), of the one part, and the European Union and its Member States, of the other part (hereinafter ‘EU-West Africa’), Article 68. http://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153867.pdf. Accessed 13 February 2020; Interim Agreement with a view to an Economic Partnership Agreement between the European Community and its Member States, of the one part, and the Central Africa Party, of the other part, [2009] OJ L57/1 (hereinafter ‘EU-Central Africa’), Article 89; Interim Agreement establishing a framework for an Economic Partnership Agreement between the Eastern and Southern Africa States, on the one part, and the European Community and its Member States, on the other part, [2012] OJ L111/2 (hereinafter ‘EU-ESA’), Article 56; Economic Partnership Agreement between the European Union and its Member States, of the one part, and the SADC EPA States, of the other part, [2016] OJ L250/3 (hereinafter ‘EU-SADC’), Article 97; Interim Partnership Agreement between the European Community, of the one part, and the Pacific States, of the other part [2009] OJ L272/2 (hereinafter ‘EU-Pacific’), Article 42.

  8. 8.

    In this regard, they cover measures relating to the products of prison labour, imposed for the protection of national treasures of artistic, historic or archaeological value and the conservation of exhaustible natural resources, which are included in GATT, Article XX.

  9. 9.

    EU-Algeria, Article 35(2); EU-Jordan, Article 41; EU-Albania, Article 63; EU-Bosnia, Article 63; Stabilisation and Association Agreement between the European Union and the European Atomic Energy Community, of the one part, and Kosovo, of the other part, [2016] OJ L78/1 (hereinafter ‘EU-Kosovo’), Article 67; EU-Macedonia, Article 61; EU-Montenegro, Article 65; EU-Serbia, Article 65.

  10. 10.

    Discussed in detail in Sect. 2.5.4 of Chap. 2.

  11. 11.

    GATS, Article XIV; whose scope in relation to public services was also considered in depth in Sect. 2.5.4 of Chap. 2.

  12. 12.

    Justified derogations for each of these policy areas can be found in: EU-Chile, Article 135(1); Decision No 2/2001 of the EU-Mexico Joint Council of 27 February 2001 implementing Articles 6, 9, 12(2)(b) and 50 of the Economic Partnership, Political Coordination and Cooperation Agreement, [2001] OJ 70/7 (hereinafter ‘EU-Mexico’), Article 27(2); Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part, [2014] OJ L261/4 (hereinafter ‘EU-Georgia’), Article 134(2); Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part, [2014] OJ L161/3 (hereinafter ‘EU-Ukraine’), Article 141(2); Agreement establishing an Association between the European Union and its Member States, on the one hand, and Central America on the other, [2012] OJ L346/3 (hereinafter ‘EU-Central America’), Article 203(1); Economic Partnership Agreement between the CARIFORUM States, of the one part, and the European Community and its Member States, of the other part, [2008] OJ L289/I/2 (hereinafter ‘EU-CARIFORUM’), Article 224(1); Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part, [2012] OJ L354/3 (hereinafter ‘EU-Columbia, Ecuador and Peru’), Article 167(1); Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part, [2011] OJ L127/6 (hereinafter ‘EU-Korea’), Article 7.50; Free Trade Agreement between the European Union and the Socialist Republic of Vietnam (hereinafter ‘EU-Vietnam’), Article 8.53. http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437. Accessed 13 February; Investment Protection Agreement between the European Union and its member states, of the one part, and Socialist Republic of Vietnam, of the other part (hereinafter ‘EU-Vietnam BIT’), Article 4.6. http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437. Accessed 13 February 2020; Free Trade Agreement between the European Union and the Republic of Singapore (hereinafter ‘EU-Singapore’), Article 8.62. http://trade.ec.europa.eu/doclib/press/index.cfm?id=961. Accessed 13 February 2020; Investment Protection Agreement between the European Union and its member states, of the one part, and the Republic of Singapore, of the other part (hereinafter ‘EU-Singapore BIT’), Article 2.3(3). http://trade.ec.europa.eu/doclib/press/index.cfm?id=961. Accessed 13 February 2020; Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part, [2017] OJ L11/23 (hereinafter ‘CETA’), Article 28.3(2); Agreement between the European Union and Japan for an Economic Partnership, [2018] OJ L330/3 (hereinafter ‘EU-Japan’), Article 8.3.

  13. 13.

    In this regard, the EU’s agreements can be contrasted with Chapter 21 of the NAFTA. This does provide some general exceptions that apply to members’ obligations but these do not apply to the services obligations found in Chapter 12.

  14. 14.

    EU-Chile, Article 135(1)(a); EU-Mexico, Article 27(2)(a); EU-Georgia, Article 134(2)(a); EU-Ukraine, Article 141(2)(a); EU-Central America, Article 203(1)(a); EC-CARIFORUM, Article 224(1)(a); EU-Columbia, Ecuador and Peru, Article 167(1)(a); EU-Korea, Article 7.50(a); EU-Vietnam, Article 8.53(a); EU-Vietnam BIT, Article 4.6(a); EU-Singapore, Article 8.62 (a); EU-Singapore BIT, Article 2.3(3)(a); EU-Japan, Article 8.3(a).

  15. 15.

    EU-Columbia, Ecuador and Peru, Article 167(1)(a), Footnote 54; EU-Korea, Article 7.50(a), Footnote 43; EU-Japan, Article 8.3(2)(a), Footnote 2; CETA, Article 28.3(2)(a), Footnote 33; EU-Singapore, Article 8.62(a), Footnote 1.

  16. 16.

    EC-CARIFORUM, Article 224(1)(a), Footnote 1.

  17. 17.

    EU-Algeria, Article 101; EU-Egypt, Article 83; EU-Israel, Article 76; EU-Jordan, Article 98; EU-Lebanon, Article 83; EU-Morocco, Article 87; EU-Palestine, Article 68; EU-Tunisia, Article 87; EU-Albania, Article 124; EU-Bosnia, Article 123; EU-Kosovo, Article 134 (constrained version); EU-Macedonia, Article 116; EU-Montenegro, Article 127; EU-Serbia, Article 127; EU-Georgia, Article 136; EU-Chile, Article 194; Economic Partnership, Political Coordination and Cooperation Agreement between the European Community and its Member States of the one part, and the United Mexican States of the other part, [1997] OJ C350/7, Article 52; EU-Ukraine, Article 143; EU-Central America, Article 357; EC-CARIFORUM, Article 225; EU-West Africa, Article 69; EU-Central Africa, Article 90; EU-ESA, Article 57; EU-SADC, Article 98; EU-Pacific, Article 43; EU-Columbia, Ecuador and Peru, Article 295; EU-Korea, Article 15.9; EU-Japan, Article 1.5; CETA, Article 28.6; EU-Singapore, Article 16.11; EU-Vietnam 17.13; EU-Singapore BIT, Article 4.5; EU-Vietnam BIT, Article 4.8.

  18. 18.

    The right to take action for essential security interests must be connected to: (i) the production of or traffic in arms, ammunition and implements of war; (ii) traffic and transactions in other goods and materials, services and technology undertaken, and to economic activities, carried out directly or indirectly for the purpose of supplying a military or other security establishment; (iii) war or other emergency in international relations; or (iv) fissionable and fusionable materials or the materials.

  19. 19.

    EU-Japan, Article 8.3(2)(b), Footnote 1; CETA, Article 28.3(2)(b), Footnote 34.

  20. 20.

    EU-Chile, Article 135(1)(c)–(d); EU-Georgia, Article 134(2)(c)–(d); EU-Ukraine, Article 141(2)(c)–(d); EU-Central America, Article 203(1)(c)–(d); EC-CARIFORUM, Article 224(1)(e)–(f); EU-Columbia, Ecuador and Peru, Article 167(1)(c)–(d); EU-Korea, Article 7.50(c)–(d); EU-Vietnam, Article 8.53(c)–(d); EU-Vietnam BIT, Article 4.6(c)–(d). EU-Singapore, Article 8.62(c)–(d); EU-Singapore BIT, Article 2.3(3)(c)–(d).

  21. 21.

    EU-Chile, Article 135(2); EU-Mexico, Article 27(3); EU-Georgia, Article 134(3); EU-Ukraine, Article 141(3); EU-Central America, Article 203(2); EC-CARIFORUM, Article 224(2); EU-Columbia, Ecuador and Peru, Article 167(2); EU-Vietnam, Article 8.1(8). Although observable EU-Vietnam BIT, Article 2.1(4), it operates as more of carve-out.

  22. 22.

    EU-Algeria, Article 35(2); EU-Jordan, Article 41; EU-Albania, Article 63; EU-Bosnia, Article 63; EU-Kosovo, Article 67; EU-Macedonia, Article 61; EU-Montenegro, Article 65; EU-Serbia, Article 65.

  23. 23.

    European Commission (2006) Implementing the Community Lisbon programme: Social services of general interest in the European Union, COM(2006) 177 final, p. 4.

  24. 24.

    Ibid.

  25. 25.

    EU-Algeria, Title III: Trade in Services; EU-Jordan, Title III: Right of Establishment and Services.

  26. 26.

    A similarly worded version of Title V is identifiable in each of the Stabilisation agreements: ‘Title V: Movement of Workers, Establishment, Supply of Services, Current Payments and Movement of Capital’ (EU-Albania; EU-Bosnia); ‘Title V: Establishment, Supply of Services and Capital’ (EU-Kosovo); ‘Title V: Movement of Workers, Establishment, Supply of Services, Capital’ (EU-Macedonia; EU-Montenegro); and ‘Title V: Movement of Workers, Establishment, Supply of Services, Movement of Capital’ (EU-Serbia).

  27. 27.

    Observable in EU-Chile, Article 135(1); EU-Georgia, Article 134(2); EU-Ukraine, Article 141(2); EU-Central America, Article 203(1); EC-CARIFORUM, Article 224(1); EU-Columbia, Ecuador and Peru, Article 167(1); EU-Korea, Article 7.50; EU-Vietnam, Article 8.53; EU-Singapore, Article 8.62; EU-Japan, Article 8.3; CETA, Article 28.3(2)

  28. 28.

    An obvious outcome given it does not cover establishment or capital movements. For detailed discussion, see Sect. 4.2.2 of Chap. 4.

  29. 29.

    EU-Korea, Article 8.3(a)–(b).

  30. 30.

    EU-Algeria, Article 40; EU-Egypt, Article 33; EU-Morocco, Article 35; EU-Tunisia, Article 35; EU-Israel, Article 34; EU-Jordan, Article 51; EU-Lebanon, Article 34; EU-Albania, Article 61(4); EU-Bosnia, Article 61(5); EU-Kosovo, Article 65(5); EU-Macedonia, Article 59(4); EU-Montenegro, Article 63(6); EU-Serbia, Article 63(6); EU-Georgia, Article 139; EU-Ukraine, Article 146; Central-America, Article 207; EC-CARIFORUM, Article 124; EU-Columbia, Ecuador and Peru, Article 170; EU-Korea, Article 8.4; EU-Japan, Article 9.4; CETA, Article 28.4-5; EU-Vietnam, Article 17.11-12; EU-Vietnam BIT, Article 4.11; EU-Singapore, Article 207(4)–(5); EU-Singapore BIT, Article 4.11.

  31. 31.

    EU-Albania, Article 61(5); EU-Bosnia, Article 61(6); EU-Montenegro, Article 63(7); EU-Serbia, Article 63(7).

  32. 32.

    EU-Vietnam BIT, Article 4.6; EU-Singapore BIT, Article 2.3(3); CETA, Article 28.3(2).

  33. 33.

    Previously, it has been estimated that nine out of ten BITs are silent with regard to justified derogations. See Alvarez and Brink 2011, p. 357.

  34. 34.

    Agreement between Canada and [Country] for the Promotion and Protection of Investments, Article 18. https://www.italaw.com/sites/default/files/files/italaw8236.pdf. Accessed 10 February 2020.

  35. 35.

    Discussed in Sect. 2.5.4 of Chap. 2.

  36. 36.

    Although the distinction between discriminatory and non-discriminatory has become harder to determine in practice. See Nic Shuibhne 2014, p. 480.

  37. 37.

    Case C-54/99 Église de scientologie, ECLI:EU:C:2000:124, Judgment of the Court of 14 March 2000 (hereinafter ‘Église de scientologie’), paras 17 and 18; Case C-36/75 Roland Rutili v. Ministre de l’intérieur, ECLI:EU:C:1975:137, Judgment of the Court of 28 October 1975 (hereinafter ‘Rutili’), para 27.

  38. 38.

    Église de scientology, above n. 37, para 30.

  39. 39.

    Case C-222/86 Unectef v. Heylens, ECLI:EU:C:1987:304, Judgment of the Court of 15 October 1987, para 14.

  40. 40.

    Cases C-118/75 Watson and Belmann, ECLI:EU:C:1976:106, Judgment of the Court of 7 July 1976, para 21; C-60/00 Mary Carpenter v. Secretary of State for the Home Department, ECLI:EU:C:2002:434, Judgment of the Court of 11 July 2002, para 40.

  41. 41.

    Case C-171/07 Apothekerkammer des Saarlandes and Others, ECLI:EU:C:2009:316, Judgment of the Court of 19 May 2009, para 19.

  42. 42.

    Case C-294/00 Deutsche Paracelsus, ECLI:EU:C:2002:442, Judgment of the Court of 11 July 2002, para 40.

  43. 43.

    Ibid., para 43.

  44. 44.

    Case C-89/09 Commission v. France, ECLI:EU:C:2010:772, Judgment of the Court of 16 December 2010, para 48.

  45. 45.

    Ibid., paras 52–53.

  46. 46.

    Ibid., para 79.

  47. 47.

    Cases C-385/99 Müller-Fauré and van Riet, ECLI:EU:C:2003:270, Judgment of the Court of 13 May 2003 (hereinafter ‘Müller-Fauré’), para 67; C-158/96 Kohll, ECLI:EU:C:1998:171, Judgment of the Court of 28 April 1998 (hereinafter ‘Kohll’), para 50; C-157/99 Smits and Peerbooms, ECLI:EU:C:2001:404, Judgment of the Court of 12 July 2001 (hereinafter ‘Smits and Peerbooms’), para 73.

  48. 48.

    Müller-Fauré, above n. 47, para 67; Kohll, above n. 47, para 51; Smits and Peerbooms, above n. 47, para 73.

  49. 49.

    Cases C-170/04 Rosengren and Others, ECLI:EU:C:2007:313, Judgment of the Court of 5 June 2007, para 49; C-174/04 Commission v. Italy, ECLI:EU:C:2005:350, Judgment of the Court of 2 June 2005, para 54; C-570/07 Blanco Pérez and Chao Gómez, ECLI:EU:C:2010:300, Judgment of the Court of 1 June 2010, para 74.

  50. 50.

    Cases C-326/07 Commission v. Italy, ECLI:EU:C:2009:193, Judgment of the Court of 26 March 2009, para 70; C-355/98 Commission v. Belgium, ECLI:EU:C:2000:113, Judgment of the Court of 9 March 2000, para 28; Église de scientologie, above n. 37, para 17; C-207/07 Commission v. Spain, ECLI:EU:C:2008:428, Judgment of the Court of 17 July 2008, para 47.

  51. 51.

    Case C-231/83 Cullet v. Leclerc, ECLI:EU:C:1985:29, Judgment of the Court of 29 January 1985 (hereinafter ‘Cullet’), para 32.

  52. 52.

    Cases C-367/89 Richardt, ECLI:EU:C:1991:376, Judgment of the Court of 4 October 1991, para 26; C-72/83 Campus Oil, ECLI:EU:C:1984:256, Judgment of the Court of 10 July 1984 (hereinafter ‘Campus Oil’), para 35.

  53. 53.

    Campus Oil, above n. 52, para 34.

  54. 54.

    Case C-231/83 Cullet v. Leclerc, ECLI:EU:C:1984:322, Opinion of Advocate General Verloren van Themaat delivered on 23 October 1984, p. 313. An example of a failure to meet this standard is found in Case C-347/88 Commission v. Greece, ECLI:EU:C:1990:470, Judgment of the Court of 13 December 1990, para 60.

  55. 55.

    Cases C-41/74 Van Duyn, ECLI:EU:C:1974:133, Judgment of the Court of 4 December 1974, para 18; Rutili, above n. 37, para 26.

  56. 56.

    Case C-7/78 Thompson, ECLI:EU:C:1978:209, Judgment of the Court of 23 November 1978, para 34.

  57. 57.

    The CJEU has made clear that neither consumer protection nor economic considerations will be covered by the ‘public policy’ derogation. See: Cases C-177/83 Kohl v. Ringelhan, ECLI:EU:C:1984:334, Judgment of the Court of 6 November 1984; Cullet, above n. 51; C-7/61 Commission of the EEC v. Italy, ECLI:EU:C:1961:31, Judgment of the Court of 19 December 1961.

  58. 58.

    TFEU, Article 65(3). Subsequently, it was explained that this did not to refer to ‘the same as the unequal treatment permitted by the derogation itself’. See Case C-256/06 Jäger, ECLI:EU:C:2008:20, Judgment of the Court of 17 January 2008, para 42.

  59. 59.

    For discussion, see Sect. 4.2.3 of Chap. 4.

  60. 60.

    Such a right is also provided for internally, see TFEU, Article 66, which provides that the Council, on a proposal from the Commission and after consulting the European Central Bank, may take safeguard measures with regard to third countries for a period not exceeding six months if such measures are strictly necessary.

  61. 61.

    Nic Shuibhne 2014, p. 483.

  62. 62.

    Barnard 2009, p. 276.

  63. 63.

    Case C-55/94 Gebhard, ECLI:EU:C:1995:411, Judgment of the Court of 30 November 1995, para 37 (citing Case C-19/92 Dieter Kraus ν. Land Baden-Württemberg, ECLI:EU:C:1993:125, Judgment of the Court of 31 March 1993, para 32).

  64. 64.

    Case C-398/95 Gouda and Others, ECLI:EU:C:1997:282, Judgment of the Court of 5 June 1997, para 41; Kohll, above n. 47, para 42.

  65. 65.

    de Vries 2013, p. 172.

  66. 66.

    Kohll, above n. 47, para 50; Smits and Peerbooms, above n. 47, para 73; Müller-Fauré, above n. 44, para 67; Case C-372/04 Watts, ECLI:EU:C:2006:325, Judgment of the Court of 16 May 2006 (hereinafter ‘Watts’), para 103.

  67. 67.

    Case C-444/05 Stamatelaki, ECLI:EU:C:2007:231, Judgment of the Court of 18 April 2007 (hereinafter ‘Stamatelaki’), para 33.

  68. 68.

    Ibid., paras 35–38.

  69. 69.

    Smits and Peerbooms, above n. 47, paras 77–80; Müller-Fauré, above n. 47, paras 77–80.

  70. 70.

    Nistor 2011, p. 99.

  71. 71.

    Case C-147/03 Commission v. Austria, ECLI:EU:C:2005:427, Judgment of the Court of 7 July 2005 (hereinafter ‘Commission v. Austria’), para 64.

  72. 72.

    Case C-184/99 Grzelczyk, ECLI:EU:C:2001:458, Judgment of the Court of 20 September 2001, para 52.

  73. 73.

    Case C-209/03 Bidar, ECLI:EU:C:2005:169, Judgment of the Court of 15 March 2005 (hereinafter ‘Bidar’), para 69.

  74. 74.

    Cases C-76/05 Schwarz, ECLI:EU:C:2007:492, Judgment of the Court of 11 September 2007 (hereinafter ‘Schwarz’), paras 79–80.

  75. 75.

    Case C-11/06 Morgan, ECLI:EU:C:2007:626, Judgment of the Court of 23 October 2007 (hereinafter ‘Morgan’), paras 43–44.

  76. 76.

    Commission v. Austria, above n. 71, para 67.

  77. 77.

    Ibid., para 68.

  78. 78.

    Bidar, above n. 73, paras 55–57.

  79. 79.

    Commission v. Austria, above n. 71, para 50.

  80. 80.

    Case C-147/03 Commission v. Austria, ECLI:EU:C:2005:40, Opinion of Advocate General Jacobs delivered on 20 January 2005, para 26.

  81. 81.

    Commission v. Austria, above n. 71, para 50.

  82. 82.

    Ibid., para 66.

  83. 83.

    Müller-Fauré, above n. 47, para 99; Case C-372/04 Watts, ECLI:EU:C:2005:784, Opinion of Advocate General Geelhoed delivered on 15 December 2005, para 73.

  84. 84.

    Cases C-238/82 Duphar, ECLI:EU:C:1984:45, Judgment of the Court of 7 February 1984, para 16; C-70/95 Sodemare, ECLI:EU:C:1997:301, Judgment of the Court of 17 June 1997, para 27; C-120/95 Decker, ECLI:EU:C:1998:167, Judgment of the Court of 28 April 1998, para 23; Kohll, above n. 47, para 19.

  85. 85.

    Case C-385/99 Müller-Fauré, ECLI:EU:C:2002:602, Opinion of Advocate General Colomer deliver on 22 October 2002, para 58.

  86. 86.

    Kohll, above n. 47, para 43.

  87. 87.

    Ibid., paras 47–49.

  88. 88.

    Smits and Peerbooms, above n. 47, para 78.

  89. 89.

    Ibid., paras 105–107.

  90. 90.

    Harbo 2010, p. 171.

  91. 91.

    The principle of proportionality is found in the last sentence of Article 36 TFEU, which states a restriction of free movement should not constitute a means of arbitrary discrimination or a disguised restriction on trade between member states. See Craig 2012, p. 617. Additionally, TEU, Article 5(4) directly acknowledges the principle by stating ‘[u]nder the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.’ Additionally, Protocol (No 2) on the application of the principles of subsidiarity and proportionality of the TEU elaborates further on the concept.

  92. 92.

    Andenas and Zleptnig 2007, p. 72.

  93. 93.

    It is often asserted that proportionality stems from the EU’s own member states’ traditions. See: Portuese 2013, p. 613; Craig and de Búrca 2011, p. 526. As a general notion, proportionality predates EU law significantly with the function it plays varying depending on the context it is used. See Vadi 2018, pp. 58–60. A typology of the different functions that served by proportionality is found in Andenas and Zleptnig 2007, pp. 73–74.

  94. 94.

    Articulated clearly in Case C-331/88 The Queen v. Minister of Agriculture, Fisheries and Food and Secretary of State for Health ex parte Fedesa et al., For further discussion of the separate steps, see de Búrca 1993, p. 113; Von Danwitz 2012, p. 371; Shaw 2018, pp. 66–72.

  95. 95.

    Case C-463/01 Commission v. Germany, ECLI:EU:C:2004:797, Judgment of the Court of 14 December 2004, para 78.

  96. 96.

    Case C-384/08 Attanasio Group, ECLI:EU:C:2010:133, Judgment of the Court of 11 March 2010, para 51.

  97. 97.

    Cases C-443/10 Bonnarde, ECLI:EU:C:2011:641, Judgment of the Court of 6 October 2011, para 35; C-205/07 Gysbrechts and Santurel Inter, ECLI:EU:C:2008:730, Judgment of the Court of 16 December 2008, para 53.

  98. 98.

    Case C-110/05 Commission v. Italy, ECLI:EU:C:2009:66, Judgment of the Court of 10 February 2009, para 66.

  99. 99.

    Case C-261/81 Rau v. De Smedt, ECLI:EU:C:1982:382, Judgment of the Court of 10 November 1982, para 12.

  100. 100.

    This has been described as narrow proportionality. See Case T-125/96 Boehringer v. Council and Commission, ECLI:EU:T:1999:302, Judgment of the Court of First Instance of 1 December 1999, para 102.

  101. 101.

    As outlined in C-159/90 Grogan, ECLI:EU:C:1991:249, Opinion of Advocate General Van Gerven delivered on 11 June 1991, p. 4720.

  102. 102.

    For a broad overview, see Craig 2012, pp. 591–592. Previously, the Court has made clear that it will not necessarily apply all three parts of proportionality. For discussion, see Craig and de Búrca 2003, p. 373. This has since been explained as the Court will ‘folding’ the third stage back into stages one or two, see Craig and de Búrca 2011, p. 526. More recently, it has been argued that the Court has moved to a two-step proportionality test. See: Nic Shuibhne 2014, p. 494; Case C-434/04 Ahokainen and Leppik, ECLI:EU:C:2006:462, Opinion of Advocate General Maduro delivered on 13 July 2006, para 26.

  103. 103.

    Barnard 2009, p. 289.

  104. 104.

    de Búrca 1993, p. 146; Tridimas 2006, p. 138; Jans 2000, pp. 263–264; Sauter 2013, p. 449.

  105. 105.

    For an in-depth discussion of this trend, see Craig 2012, pp. 590–615.

  106. 106.

    Nistor 2011, p. 127.

  107. 107.

    Kohll, above n. 47, para 50; Smits and Peerbooms, above n. 47, para 80; Watts, above n. 66, para 110; Müller-Fauré, above n. 47, para 66; Stamatelaki, above n. 67, para 34.

  108. 108.

    Only one of cases explicitly found that the prior authorisation was ‘linked’ to such an objective. See Watts, above n. 66, para 66.

  109. 109.

    Kohll, above n. 47, para 52; Stamatelaki, above n. 67, para 35.

  110. 110.

    Smits and Peerbooms, above n. 47, para 76; Müller-Fauré, above n. 47, para 77; and Watts, above n. 66, para 81. In the final of these, a distinction was drawn between hospital and non-hospital services. For the latter, the Court found that the threat posed by reimbursement to the financial equilibrium of a system is less than that of hospital services and schemes not necessary, see Watts, above n. 66, para 108.

  111. 111.

    Smits and Peerbooms, above n. 47, para 90; Müller-Fauré, above n. 47, para 116; Watts, above n. 66, para 85.

  112. 112.

    Müller-Fauré, above n. 47, para 90; Watts, above n. 66, paras 119–120; Smits and Peerbooms, above n. 47, para 94.

  113. 113.

    Cases C-96/85 Commission v. France, ECLI:EU:C:1986:189, Judgment of the Court of 30 April 1986, para 11; C-162/99 Commission v. Italy, ECLI:EU:C:2001:35, Judgment of the Court of 18 January 2001, para 21.

  114. 114.

    Case C-140/03 Commission v. Greece, ECLI:EU:C:2005:242, Judgment of the Court of 21 April 2005, para 35.

  115. 115.

    Case C-351/90 Commission v. Luxembourg, ECLI:EU:C:1992;:266, Judgment of the Court of 16 June 1992, paras 20–22.

  116. 116.

    Schwarz, above n. 74, para 80.

  117. 117.

    Ibid., para 81.

  118. 118.

    Morgan, above n. 75, para 43.

  119. 119.

    Ibid., paras 45–46.

  120. 120.

    See generally: Neumann and Tuerk 2003, p. 216 (finding similarities between WTO and EU approaches to necessity) ; Desmedt 2001, p. 462 (arguing the introduction of causality to the assessment of ‘necessity’ under WTO law brings it closer to EU proportionality); Andenas and Zleptnig 2007, p. 89 (identifying the various ways proportionality can find its way into WTO law).

  121. 121.

    Ortino 2004, p. 470.

  122. 122.

    WTO Panel, US—Section 337 of the Tariff Act of 1930, L/6439-36S/345, Report of 7 November 1989, para 5.26; WTO Panel, US—Measures Affecting Alcoholic and Malt Beverages, DS23/R-39S/206, Report of 19 June 1992, para 5.52; WTO Panel, Thailand—Restrictions on Importation of and Internal Taxes on Cigarettes, DS10/R—37S/200, Report of 7 November 1990, para 75; WTO Panel, United States—Standards for Reformulated and Conventional Gasoline, WT/DS2/R, Report of 29 January 1996, para 6.28.

  123. 123.

    WTO Appellate Body, Korea—Various Measures on Beef, WT/DS161/AB/R and WT/DS169/AB/R, Report of 11 December 2000, para 163.

  124. 124.

    Ibid., para 164.

  125. 125.

    WTO Appellate Body, European Communities—Measures affecting Asbestos and Asbestos-containing products, WTO/DS135/AB/R, Report of 12 March 2001, para 72.

  126. 126.

    WTO Panel Report, United States—Gambling, WT/DS285/R, Report of 10 November 2005, para 306.

  127. 127.

    Andenas and Zleptnig 2007, pp. 462–463.

  128. 128.

    WTO Appellate Body, United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, Report of 12 October 1998, para 156.

  129. 129.

    Neumann and Tuerk 2003, p. 231. This conclusion was reached in Sect. 2.5.4 of Chap. 2.

  130. 130.

    Although, it should be noted that many of the many of the EU’s agreements provide for such. The question of enforcement is addressed more fully in Chap. 7.

  131. 131.

    Sørensen 2012, p. 201.

  132. 132.

    Kapterian 2010, pp. 97–98.

  133. 133.

    However, there are exceptions to this general rule. For instance, the draft FTA between Korea and the US states that non-discriminatory regulatory actions do not qualify as expropriation unless they are ‘extremely severe or disproportionate.’ See Free Trade Agreement Between the United States of America and the Republic of Korea, Annex 11-B(3)(b). https://ustr.gov/sites/default/files/uploads/agreements/fta/korus/Chapter_Eleven_Investment.pdf. Accessed 23 January 2019.

  134. 134.

    ICSID, Telenor Mobile Communications AS v. Republic of Hungary, Case No. ARB/04/15, Award of 22 June 2006, para 40. The Tribunal rejected the claimant’s claims on jurisdictional grounds, see para 108(1).

  135. 135.

    ICSID, Urbaser SA and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic, Case No. ARB/07/26, Award of 8 December 2016, para 969.

  136. 136.

    ICSID, Siemens AG v. The Argentine Republic, Case No. ARB/02/8, Award of 6 February 2007, para 354.

  137. 137.

    ICSID, Tecnicas Medioambienteales Tecmed S.A. v. The United Mexican States, Case No. ARB(AF)/00/2, Award of May 29 2003, para 122. Here, the tribunal cited ECtHR, Mellacher and Others v. Austria, 12 EHRR 391, Judgment of 19 December 1989. This approach has been cited with approval in ICSID, LG&E Energy Corp. and others v. The Argentine Republic, Case No. ARB/02/1, Decision on Liability of 3 October 2006, para 195; ICSID, Azurix Corp. v. The Argentine Republic, Case No. ARB/01/12, Award of 14 July 2006, paras 311–312.

  138. 138.

    ICSID, MTD Equity SDN BHD and MTD Chile SA v. Republic of Chile, Case No. ARB/01/7, Award of 25 May 2004, para 109.

  139. 139.

    ICSID, Total SA v. Argentine Republic, ICSID Case No. ARB/04/1, Decision on Liability of 27 December 2010, para 123.

  140. 140.

    ICSID, Occidental Petroleum Corporation and Occidental Exploration and Production Co v. Republic of Ecuador, Case No. ARB/06/11, Award of 5 October 2012, Footnote 7, 70.

  141. 141.

    Ibid., para 402.

  142. 142.

    Vadi 2018, p. 96; Henckels 2015, p. 123.

  143. 143.

    For example, UNCITRAL, Glamis Gold Ltd v. United States, Award of 8 June 2009, paras 590 and 762.

  144. 144.

    As suggested in Krajewski 2016, p. 7.

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Pedreschi, L.F. (2020). Safeguarding Public Services: Exceptions and Derogations of the Internal and External Frameworks. In: Public Services in EU Trade and Investment Agreements. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-383-2_6

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