EU Law Blog

Number of Prisoners: Statistics for 2005-2007

The EC Commission recently released a fascinating set of statistics on the number of prisoners in the EU between 2005 and 2007. You can find them here.

During that period there were 607 000 adult and juvenile prisoners including pre-trial detainees as at September 1st of each year. That figure does not include those held (often in appalling circumstances and with few rights) pending investigation into their immigration status or awaiting deportation.

The EU wide average is 123 prisoners per 100 000 of population. In comparison, in the USA there are 758 prisoners per 100 000 of population.

The highest prisoner rates are to be found in the Baltic countries, Poland and the Czech Republic with the very highest in Estonia (302 prisoners per 100 000 inhabitants ), Latvia (293), Lithuania (232), Poland (228) and the Czech Republic (185). The lowest rates were registered in Slovenia (60), Finland (68), Denmark (71), Ireland (75 in 2004-2006) and Sweden (77). Interestingly, a high crime rate country such as Belgium has a below average rate for prisoners (91).

More complete statistics on crime (number of recoded offences etc.) in the EU are available in this brochure.

Free movement of Persons, Directive 2004/38 and Guidelines on Transposition

The Commission adopted guidelines to help ensure better transposition and application of Directive 2004/38/EC on the right of EU citizens and their families to move and reside freely.

We noted a while back we noted the Commission's report on the parlous state of implementation of the directive.

The guidelines aim to offer assistance to member States on the measures they can take to tackle criminality, abuse and marriages of convenience.

A press release on the Guidelines is available here and a short description of their content is available here.

But as for the Guidelines themselves, they are not made available. The Commission's tiresome policy of opacity in action, once again.

German Constitutional Court and Lisbon Treaty Ratification

The German Federal Constitutional Court has handed down its judgment on the compatibility of the Lisbon-Reform Treaty with the German Basic Law (as the constitution is called).

The Constitutional Court concluded that there was incompatibility between the Lisbon Treaty and the Basic Law and therefore the Federal Republic could in principle complete the ratification process without an problem.

It held that the Lisbon Treaty does not transform the EU into a federal state and such a transformation would have been contrary to domestic German law. Nor does the Lisbon Treaty create an EU citizenship to supersede a national one, nor does it oblige member states to provide troops for a European army. In essence, the Constitutional Court finds that the member States of the EU wield the political power.

But, the Constitutional Court continued, the German bill ratifying the Treaty requires modification before t can enter into force and be compatible with the Basic Law. The Court held that in order for the bill to be constitutional, it must provide for more participation of the German Parliament in matters bringing about the transfer of greater powers the EU institutions.

Consequently, ratification cannot proceed in Germany until the domestic legislation is brought into line with the Basic Law.

You can read the full judgment in English here but it is long. A press release giving the salient points is available here.

For our post on the Lisbon Treaty and the Czech Constitutional Court, see here.

Antitrust Fines, Tax Deductibility, Coöperation between Commission and National Courts: Case C-429/07

The Court of Justice has handed down its first judgment defining the scope of the right of the Commission to intervene in proceedings pending before national courts where the coherent application of the antitrust rules so require.

In its judgment in Case C-429/07 Inspecteur van de Belastigdienst v. X BV, the Court held that the Commission could intervene in domestic proceedings concerning the tax deductibility of a fine that it had imposed on an undertaking in the Netherlands for its involvement in an illicit cartel.

The Commission had imposed fines on a number of companies for participating in the plasterboard cartel in a decision of November 27th 2002. One of the companies concerned, known as X KG of Germany, passed on part of the fine within the group of which it is the parent and in particular to its Dutch subsidiary, X BV. When making its corporation tax returns, X BV tried to deduct the amount of the fines from its profits. The Dutch tax authorities disallowed such a deduction. X BV disputed that disallowance before the Dutch courts.

The Commission then learned of the case and petitioned the Dutch court to intervene as amicus curiae pursuant to Article 15 § 3 of Regulation 1/2003. The Dutch court was unsure whether the Commission could use those powers to intervene in what was essentially a tax case, not an antitrust one, and referred the matter to the Court of Justice.

Coöperation between the Commission and national courts in antitrust matters is governed by Article 15 of Regulation 1/2003 which establishes a system for the mutual exchange of information between the Commission and the courts of the member States, and provides, in specific circumstances, for the possibility of intervention by the Commission and the competition authorities of the member States in proceedings pending before national courts.

The Court engaged in quite a bit of exegesis of Article 15 § 3. It stated that the first and second sentences of the first subparagraph of Article 15 § 3 permit national competition authorities to submit written observations on their own initiative, and, with the permission of the court concerned, oral observations to the national courts of their member State on issues relating to the application of Articles 81 EC or 82 EC. The third and fourth sentences of that provision also permit the Commission to submit written observations on its own initiative, and, with the permission of the court in question, oral observations to national courts where the coherent application of Articles 81 EC or 82 EC so requires.

Consequently, the Court held that the first subparagraph of Article 15 § 3 of Regulation 1/2003 refers to two different types of intervention with separate fields of application: intervention by the national competition authorities before the national courts of their member State on issues relating to the application of Articles 81 EC or 82 EC, and intervention by the Commission before national courts where the coherent application of Articles 81 EC or 82 EC so requires.

It held that the four sentences of that subparagraph, and above all the fact that the second and fourth sentences are almost entirely identical, emphasises the fact that the EC legislature intended to draw a distinction between those two situations, despite the fact that they appear in the same subparagraph.

Consequently, a literal interpretation of the first subparagraph of Article 15 § 3 of Regulation 1/2003 leads to the conclusion that the option for the Commission, acting on its own initiative, to submit written observations to courts of the member States is subject to the sole condition that the coherent application of Articles 81 EC or 82 EC so requires. That condition may be fulfilled even if the proceedings concerned do not pertain to issues relating to the application of Article 81 EC or Article 82 EC.

The Court went on to hold that the coherent application of the rules on competition comprises the penalties that are imposed upon their breach.

The EC establishes, according to the Court, a comprehensive system for monitoring cartels and abuses of dominant positions which sets out a principle of prohibition, contained in Articles 81 EC and 82 EC, and sanctions for its infringement, on the basis of Article 83 EC. Those articles must be understood as forming part of a comprehensive set of provisions designed to prohibit and punish anti‑competitive practices.

The Court found that it is apparent from Article 83 §2 (a) EC that the fines and periodic penalty payments which may be imposed on undertakings in connection with the application of Community competition law are designed to ‘ensure compliance with the prohibitions laid down in Article 81(1) [EC] and in Article 82 [EC]’. The purpose of Article 83 EC is therefore inter alia to ensure the effective supervision of cartels and abuses of dominant positions.

The Commission’s power to impose fines on undertakings which intentionally or negligently breach Articles 81 §1 EC or 82 EC is one of the means conferred on the Commission in order to enable it to carry out the task of supervision entrusted to it by EC law (Joined Cases 100/80 to 103/80 Musique Diffusion française and Others v Commission [1983] ECR 1825, paragraph 105, and Case C‑76/06 P Britannia Alloys & Chemicals v Commission [2007] ECR I‑4405, paragraph 22). As a consequence, it is not possible to dissociate the principle of prohibition of anti‑competitive practices from the penalties provided for.

The effectiveness of the penalties imposed by the national or Community competition authorities on the basis of Article 83 §2 (a) EC is therefore a condition for the coherent application of Articles 81 EC and 82 EC.

The Court concluded that the third sentence of the first subparagraph of Article 15 § 3 of Regulation 1/2003 must be interpreted as meaning that it permits the Commission to submit on its own initiative written observations to a national court of a member State in proceedings relating to the deductibility from taxable profits of the amount of a fine or a part thereof imposed by the Commission for infringement of Articles 81 EC or 82 EC.

Common Frame of Reference and House of Lords Report

Regular readers surely know that we are big fans of the Reports published by the British House of Lords EU Select Committee.

That Committee has recently published an interesting and comprehensive report on the "Draft Common Frame of Reference" ("DCFR"), the more common name given to the "Principles, Definitions and Model Rules of European Private Law." For the HTML browsable verion of the report, see here. For a pdf version, see here.

The Common Frame of Reference is an academic venture financed by the EU and is the product of collaboration by distinguished private law scholars across Europe over a number of years.

One of the main purposes of the Common Frame of Reference is to collect a body of uniform terms and concepts which can be used by EU institutions when they prepare legislation covering private and civil in the future. But as Professor von Bar explains in an introductory article, the purpose of the endeavor is to set out :

"[...] a framework set of annotated rules to which the European and national legislators and the European and national courts, including arbitral tribunals, can refer to when in search for a commonly acceptable solution to a given problem. This “Common Frame of Reference” is also drafted with a view to allowing parties to a contract, whether cross-border or purely domestic, to incorporate its contents into their agreement."

The House of Lords report is very insightful, well-researched and quite critical. It concludes:

"We also remain opposed to harmonisation of the general law of contract. However, this is not now on the agenda and further discussion of it appears to us to serve no useful purpose [...] Above all, in our view, Europe should not commit itself, even in principle, to a generally interventionist view of the law of contract, which tends to over-regulate contractual terms and behaviour and to undervalue the virtues of party autonomy and the principles of freedom and choice for which Europe otherwise stands."

The House of Lords does not conclude that the venture is without value. It will certainly help to improve the quality of EU legislation. And also:

"Further, the comments, notes and comparative law material produced in the course of a substantial research programme underpinning the DCFR, which are to be published later this year, should on any view be a useful aid to mutual understanding, and be of general value nationally and at a European level.

For an equally insightful appraisal, look at Professor Simon Whittaker's "Assessment" prepared for the British Ministry of Justice.

There's also an interesting report prepared for the Scottish regional government in March 2009. Scotland has its own, separate legal system which is a mix of civil and common law. The report to the Scottish government concluded intriguingly that because Scotland is a small jurisdiction, the Common Frame of Reference "represents a welcome opportunity to develop Scots law in a manner that is consistent with the theoretical foundations of Scots law."

For more studies (some but not all available online) and background have a look at the website of the Study Group on a European Civil Code.

Free Movement of Goods, Product Use and Jet-Skis: Case C-142/05

Remember that a while ago the Court of Justice held that in principle that national rules regulating the use of products are within the ambit of Article 28 EC but can be justified under Article 30. The Court made that clear in its judgment in Case C-110/05 Commission v. Italy which we noted up here.

Now the Court of Justice has handed down a second judgment in answer to a request for a preliminary ruling from a Swedish court that confirms and consolidates that position. In its recent judgment in Case C-142/05 Mickelsson and Roos the Court of Justice held that Swedish rules on the use of jet-skis on navigable waterways were caught by the prohibition of measures hindering the free movement of goods in Article 28 EC but could be justified under Article 30 EC.

There had been divergent opinions of Advocate generals on that point. In her opinion in this case Advocate General Kokott seemed to favor taking product use regulations outside the scope of Article 28 EC. Advocate General Poiares Maduro in his opinion in Joined Cases C-158/04 and C-159/04 Alfa Vita Vassilopoulos and Carrefour-Marinopoulos was not in favor.

Sweden had a rule laying down that jet-skis could only be used on "general navigable waterways" and such other waterways as expressly permitted by local rules. As a matter of fact, no such local rules had been passed and consequently jet-skis could only be used on "general navigable waterways". But "general navigable waterways" are relatively few and very busy with commercial traffic. In practice, therefore, the actual use of jet-skis in Sweden are merely marginal.

The Court recalled its classic case-law according to which  measures taken by a member State, the aim or effect of which is to treat goods coming from other member States less favorably and, in the absence of harmonisation of national legislation, which create obstacles to the free movement of goods by applying, to goods coming from other member States where they are lawfully manufactured and marketed, rules that lay down requirements to be met by such goods, even if those rules apply to all products alike, must be regarded as ‘measures having equivalent effect to quantitative restrictions on imports’ for the purposes of Article 28 EC (see to that effect, Case 120/78 Rewe-Zentral (Cassis de Dijon) [1979] ECR 649, paragraphs 6, 14 and 15; Case C-368/95 Familiapress [1997] ECR I-3689, paragraph 8; and Case C-322/01 Deutscher Apothekerverband [2003] ECR I-14887, paragraph 67). Any other measure which hinders access of products originating in other member States to the market of a member State is also covered by that concept (Case C-110/05 Commission v. Italy [2009], paragraph 37).

Even if the national regulations at issue do not have the aim or effect of treating goods coming from other member States less favorably, which is for the national court to ascertain, the restriction which they impose on the use of a product in the territory of a member State may, depending on its scope, have a considerable influence on the behaviour of consumers, which may, in turn, affect the access of that product to the market of that member State. Consumers, knowing that the use permitted by such regulations is very limited, have only a limited interest in buying that product (Case C-110/05 Commission v. Italy, paragraphs 56 and 57).

The Court continued that the Swedish measures could be justified under Article 30 EC but that it was for the national court to assess the facts of the case and determine whether the measures in question in fact met the requirements for such a justification.

It recalled that in preliminary reference proceedings - based on a clear separation of functions between the national courts and the Court of Justice - any assessment of the facts in the case is a matter for the national court (Case C-450/06 Varec [2008] ECR I-581, paragraph 23). But to give the national court a useful answer, the Court may, in a spirit of cooperation with national courts, provide it with all the guidance that it deems necessary (Case C-49/07 MOTOE [2008], paragraph 30).

The Court continued that in the main proceedings, the national regulations had been in force only for about three weeks at the material time. The fact that measures to implement those regulations had not been adopted at a time when those regulations had only just entered into force ought not necessarily to affect the proportionality of those regulations in so far as the competent authority may not have had the necessary time to prepare the measures in question, a matter which falls to be determined by the national court.

If the national court were to find that implementing measures were adopted within a reasonable time but after the material time of the events in the main proceedings and that those measures designate as navigable waters the waters in which the accused in the main proceedings used personal watercraft and consequently had proceedings brought against them, then, for the national regulations to remain proportionate and therefore justified in the light of the aim of protection of the environment, the accused would have to be allowed to rely on that designation; that is also dictated by the general principle of Community law of the retroactive application of the most favourable criminal law and the most lenient penalty (Joined Cases C-387/02, C-391/02 and C-403/02 Berlusconi and Others [2005] ECR I-3565, paragraph 68).

Infringement Cases, Article 228 EC, Financial Penalties, Lump Sum Payments: Case C-109/08 and Case C-568/07

A really bad day for Greece ! Not one but two judgments of the Court of Justice imposing the payment of a lump sum financial penalty for failure to comply with a Court judgment contrary to Article 228 EC.

The two cases don't really break new ground. They follow on from Case C-70/06 Commission v. Portugal we noted up here and Case C-121/07 Commission v. France

In its judgment in Case C-109/08 Commission v. Greece, the Commission proposed that the Court impose on Greece a lump sum payment of € 9 636 for each day of delay in complying with the judgment in Case C‑65/05 Commission v Greece, from the day of delivery of that judgment until the day on which it has been fully complied with or until judgment is delivered in this case, whichever is the sooner. That daily amount is arrived at by applying the principles set out in the Commission Communication of 13 December 2005 (SEC (2005) 1658) and multiplying a basic amount of € 200 by the coefficient for seriousness of the infringement, set in this case at 11 on a scale of 1 to 20, and by the coefficient reflecting Greece’s capacity to pay, set at 4.38. The total lump sum payment requested amounted to € 3 420 780, which is arrived at by multiplying the daily amount of € 9 636 by 355 (the number of days between October 26th 2006, the date on which the judgment in Case C‑65/05 Commission v Greece was delivered, and October 17th 2007, the date on which the Commission decided to bring the action in this case.

In fact, the Court of Justice held that a lump sum of € 3 million was appropriate.

It held that if it decides to impose a periodic penalty payment or lump sum payment, it must do so, in exercising its discretion, in a manner that is appropriate to the circumstances and proportionate both to the breach that has been established and to the capacity of the member State concerned to pay. For a lump sum payment, the relevant factors to be taken into account include, in particular, factors such as how long the breach of obligations has persisted since the judgment which initially established it was delivered and the public and private interests involved (see Case C‑121/07 Commission v France, paragraph 64).

In this particular case, the Court found that the breach of obligations had persisted for a long period since the judgment which initially established it, of the public and private interests at issue, of the lack of a decision to suspend application of the legislation in question in order to prevent criminal prosecutions, and of the lack of any tangible move to undertake compliance with that judgment. Consequently, payment of a lump sum must be imposed and €3 million was an appropriate amount. The Court also imposed a periodic pernalty payment of €31 536 per day until Greece complied with the judgment in Case C65/05.

In the second judgment, in Case C-568/07 Commission the Court did not impose a periodic penalty payment on Greece because it had complied with it obligations before judgment. But it did impose a lump sum penalty of €1 million for non-compliance in the past. It used similar principles to those described in the first case but took account of the fact that Greece had taken steps to comply quite quickly and achieved full compliance during the course of the proceedings in this case.

Korea - EU Competition Cooperation Agreement

The EU has finally signed an agreement to coöperate with the Republic of Korea on antitrust matters.

It has taken quite a while for the EU to sign it (appeasement of the North, perhaps? Allright, that's just a joke).

The agreement with Korea is similar to those with the United States, Canada and Japan.

The agreement provides for :
-the notification of enforcement activities that may affect the interests of the other jurisdiction
-mutual assistance, including the possibility for one authority to ask the other to undertake enforcement action
-coordination of enforcement activities
-exchange of non-confidential information
-organisation of regular bilateral meetings between the parties' competition authorities.

The Commission's press release is available here. The actual text of the agreement is not made public (Commission's opacity policy oblige).

Directory of EU Legislation in Preparation

The EU's Office of Publications has set up a neat, web-based, directory of EU legislation in preparation.

You can consult it at the link here.

The only thing is that it does not seem to be kept up to date on a daily basis. But still, it is much better than nothing, which was the situation before.

Pharmacies, Ownership, Freedom of Establishment and Public Health: Cases C-531/06, C-171/07 and C-172/07

Can member States provide that only professionally qualified pharmacists may own and operate a pharmacy ?

Yes, answers the Court of Justice in its Grand Chamber formation in its judgments in Case C-531/06 Commission v. Italy and Joined Cases C-171/07 and C-172/07 Apothekerkammer des Saarlandes and Others.

In Case C-531/06, the Commission brought infringement proceedings against Italy seeking a declaration that Italian law which allowed only pharmacists to own and operate private pharmacies was in breach of Article 43 EC on the freedom of establishment and of Article 56 EC on the free movement of capital.

In Joined Cases C-171/07 and C-172/07, the Court answered a preliminary reference from a German court about the compatibility with Article 43 EC of German state legislation restricting the right to own and operate pharmacies to pharmacists.

In both cases, the Court disagreed with the Commission. It dismissed the action brought by the Commission in Case C-531/06.

The Court did state, however, that the national legislation in question constitute a restriction on the freedom of establishment and on the free movement of capital.

The Court recalls that Article 43 EC precludes any national measure which, even though it is applicable without discrimination on grounds of nationality, is liable to hinder or render less attractive the exercise by Community nationals of the freedom of establishment that is guaranteed by the Treaty (Case C-19/92 Kraus, paragraph 32, and Case C‑299/02 Commission v Netherlands, paragraph 15). Also, legislation making the establishment in the host member State of an economic operator from another member State subject to the issue of a prior authorization and allows self-employed activity to be pursued only by certain economic operators who satisfy predetermined requirements, compliance with which is a condition for the issue of that authorization, constitutes a restriction within the meaning of Article 43 EC. Such legislation deters or even prevents economic operators from other member States from pursuing their activities in the host member State through a fixed place of business (Case C-169/07 Hartlauer paragraphs 34, 35 and 38).

In a similar vein, it recalls that national measures are restrictions within the meaning of Article 56(1) EC if they are liable to prevent or limit the acquisition of stakes in the undertakings concerned or to deter investors from other member States from investing in their capital (see Case C-112/05 Commission v Germany, paragraph 19, and Joined Cases C-463/04 and C-464/04 Federconsumatori and Others, paragraph 21).

But the Court went on to find that the restrictions were justified on grounds of the protection of human health. It stated that medicinal products are distinguishable from other goods because of their therapeutic value. Consequently, member States can legitimately seek ways to ensure the proper an correct consumption of medicines and can require that medicinal products be supplied by pharmacists enjoying genuine professional independence.

The Court also held that member States enjoy a discretion to decide that there is a risk that less restrictive rules designed to ensure the professional independence of pharmacists, such as a system of controls and penalties, would not be observed in practice, given that the interest of a non-pharmacist in making a profit would not be tempered in a manner equivalent to that of self-employed pharmacists and that the fact that pharmacists, when employees, work under the direction of an employer who could make it difficult for them to oppose instructions.

These cases are important as the illustrate the way the provisions on freedom of establishment and the free movement of capital work in practice.