EU ∑¬∑¬∑ ¬∑¬∑¬∑¬∑ ¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑ ¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑¬∑Tenth EditionJosephine Steiner and Lorna WoodsOXFORDUNIVERSITY PRESS

OXFORDUNIVERSITY PRESSGreat Clarendon Street, Oxford oxZ 6dpOxford University Press is a department of the University of Oxford.It furthers the University's objective of excellence in research, scholarship,and education by publishing worldwide inOxford New YorkAuckland Cape Town Dar es Salaam Hong Kong KarachiKuala Lumpur Madrid Melbourne Mexico City NairobiNew Delhi Shanghai Taipei TorontoWith offices inArgentina Austria Brazil Chile Czech Republic France GreeceGuatemala Hungary Italy Japan Poland Portugal SingaporeSouth Korea Switzerland Thailand Turkey Ukraine VietnamOxford is a registered trade mark of Oxford University Pressin the UK and in certain other countriesPublished in the United Statesby Oxford University Press Inc., New York josephine Steiner and Lama Woods, 2009The moral rights of the authors have been assertedDatabase right Oxford University Press (maker)Crown copyright material is reproduced under Class LicenceNumber C01P(X)()0148 with the permission of OPSIand the Queen's Printer for ScotlandTenth edition 2009All rights reserved. No part of this publication may be reproduced,stored in a retrieval system, or transmitted, in any form or by any means,without the prior permission in writing of Oxford University Press,or as expressly permitted by law, or under terms agreed with the appropriatereprographics rights organization. Enquirtes concerning reproductionoutside the scope of the above should be sent to the Rights Department,Oxford University Press, at the address aboveYou must not circulate this book in any other binding or coverand you must impose this same condition on any acquirerBritish Library Cataloguing in Publication DataData availableLibrary of Congress Cataloging in Publication DataData availableTypeset by MacMillan Publishing SolutionsPrinted in Great Britainon acid-free paper byAshford Colour Press Ltd, Gosport, HantsISBN 978-0-19-921907-013579108642

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OUTLINE CONTENTSPART I1From EEC to EU: A brief history of the development of the Union32Institutions of the Union: Composition and powers253Scope of the EC Treaty: Laws and lawmaking514Principle of supremacy of EC law855Principles of direct applicability and direct effects1056General principles of law133PART 111677Framework for enforcement1698Remedies in national courts1799State liability20610 The preliminary rulings procedure22211 Enforcement actions25512 Direct action for annulment27513 Action for failure to act31114 Community liability in tort: Action for damages321PART Ill34315 Introduction to the internal market34516 Harmonisation36017 Free movement of payments and capital38518 Customs union39819 Free movement of goods41220 Derogation from the free movement of goods44221 Citizenship: Right of free movement and residence45522 Economic rights: Workers, establishment, and services49123 Free movement: Social rights52924 Right to receive services55325 Free movement of persons: Limitations on groundsof public policy, public security, or public health565

Outline contents26 The area of freedom, security, and justice: EU homeaffairs law and policy57927 Discrimination60628 Introduction to competition policy65529 Element of competition law in the internal market66430 Intellectual property rights and the internal market71331 Restrictions on State aid728vii

DETAILED CONTENTSxivPrefaceAbbreviationsTable of Cases -Chronological ListTable of Cases- Alphabetical ListTable of Commission DecisionsTable of UK StatutesTable of European Community TreatiesTable of EU Secondary LegislationTable of T I1From EEC to EU: A brief history of the development of the Union1.1 Introduction 31.2 Development prior to the Single1.7 Treaty of Nice 121.8 Treaty establishing a Constitutionfor Europe 141.9 Treaty of Lisbon 151.10 Theories of integration Act 3Enlargement 4The Single European Act 6Treaty on European Union 7Impact of the Treaty ofAmsterdam 102Institutions of the Union: Composition and powers2.1 Introduction 252.2 The institutions 252.3 Parliament (Articles 189-201(ex 137-44) EC) 262.4 Council (Articles 202-10(ex 145-54) EC) 322.5 Commission (Articles 211-19(ex 155--63) EC) 372.6 Economic and Sodal Committee(Articles 257-62 (ex 193-8) EC) 4131.11 Conflicting attitudes towardsthe Union 211.12 The future of the Regions 41Budgetary procedures 42Court of Auditors 42Court of justice (Articles 220-45(ex 164-88) EC) 432.11 Lisbon Treaty 472.12 Conclusions 483Scope of the EC Treaty: Laws and lawmaking3. 51Scope of the EC Treaty 51Basis for legislative action 56Expansion of Union competence 59Competence and subsidiarity 61Lawmaking process 643. 7 Legislative acts 703.8 Sources of EC law 753.9 Problems in the lawmakingprocess 763.10 Conclusions 8251

Detailed contents4Principle of supremacy of EC law4.1 Introduction 854.2 The problem of priorities 854.3 The Court of Justice'scontribution 8754.4 The Member States' response 934.5 Supremacy, the Constitution, andLisbon 1014.6 Conclusions 102Principles of direct applicability and direct effects5.1 Introduction 1055.2 Doctrine of direct effects 1056855.3 Prindple of indirect effects 1245.4 Conclusions 130General principles of law6.1 Introduction. J336.2 Rationale for the introduction ofgeneral principles of law 1346.3 Development of generalprinciples 1356.4 Relationship between the EC/EUand the ECHR in the protectionof human rights: View from theECHR 1411051336.5 The EU Charter of FundamentalRights 1436.6 Rules of administrative justice 1476.7 Equality 1566.8 Subsidiarity 1586.9 Effectiveness 1586.10 General principles applied to nationallegislation 1596.11 Conclusions 163PART 117Framework for enforcement7.1 Introduction 1697.2 Action before the EuropeanCourts 17087.3 Action before national courts 1747.4 Conclusions 177Remedies in national courts8.1 Introduction 1798.2 General principles regarding nationalprocedural rules 1808.3 Meaning of 'effectiveness' 1828.4 Principle of 'equivalence' 19391691798.5 Impact of EC law on nationalremedies 1958.6 Impact of treaty amendment 2028.7 Conclusions 202State liability9.1 Introduction 2069.2 Principle of state liability underFrancovich v Italy 20610 The preliminary rulings procedure10.1 Introduction 22210.2 The text of Article 234 and anoverview of the procedure 2232069.3 Conclusions 22022210.3 The generous approach of the ECJ toArticle 234 references 22510.4 The ECJ's refusal to give rulings insome cases 233ix

xDetailed contents10.5 National courts and the referenceprocedure 23710.6 What is the temporal effect of aruling from the ECJ? 24610.7 Special limits on references inJHA 24910.8 The increasing workload of the ECJ:The need for reform 25110.9 Conclusions 25211 Enforcement actions11.1 Introduction 25511.2 Outline of enforcementmechanism 25511.3 Purpose of enforcement actions 25711.4 Member States' failure to fulfil anobligation 25711.5 Procedure 25911.6 Defences 26311.7 Consequences of a ruling andof a failure to comply 26725511.8 Action by Member States(Article 227 EC) 27111.9 Impact of the treaty amendment 27211.10 Special enforcement procedures:State aid, breach of Article 95(4)procedures, and measures toprevent serious internaldisturbances 27311.11 Conclusions 27312 Direct action for annulment12.1 Introduction 27512.2 Overview of provisions 27612.3 Judicial review: Reviewable acts 27712.4 Locus standi: Who may bring anaction? 28012.5 Time limits 29827512.6 The merits 30012.7 Consequences of a successfulaction 30412.8 Scope of indirect review underArticle 241 EC 30612.9 Conclusions 30913 Action for failure to act13.1 Introduction 31113.2 Overview of the provisions 31113.3 Reviewable omissions 31213.4 Locus standi 31331113.5 Procedure 31713.6 Consequences of a successfulaction 31913.7 Conclusions 32014 Community liability in tort: Action for damages14.1 Introduction 32114.2 Scope of non-contractualliability 32114.3 Locus standi 32314.4 Elements of non-contractualliability 32414.5 Wrongful acts or omissions 32514.6 Establishing an unlawful act 32614.7 Liability for lawful acts 33232114.8 Damage 33314.9 Causation 33514.10 Impact of other possible causes ofaction 33614.11 Relationship between Article 288(2)and other remedies 33 714.12 Concurrent liability 33814.13 Conclusions 340PART Ill15 Introduction to the internal market15.1 Introduction 34515.2 Overview of the four freedoms 34615.3 Common themes in the freemovement provisions 350345

Detailed contents15.4 Relationship between thefreedoms 35515.5 The social dimension 35615.6 Completion of the internal marketand the position of third countrynationals 35716 Harmonisation16.1 Introduction 36016.2 The nature of harmonisation 36116.3 Types of harmonisation 36336016.4 Article 95 and harmonisation 37316.5 The impact of harmonisation ondomestic law 37916.6 Conclusions 38317 Free movement of payments and capital17.1 Introduction 38517.2 Outline of provisions relating to thefree movement of capital 38517.3 Scope of the free movement ofcapital 38617.4 Exceptions to the free movement ofcapital 39017.5 Relationship with other freedoms 39417.6 Restrictions on free movement ofcapital between Member Statesand third countries 39617.7 Power to legislate in the field of freemovement of capital 39617.8 Conclusions 39718 Customs union18.1 Introduction 39818.2 Common customs tariff 39918.3 Prohibition between MemberStates of customs duties on importsand exports and of all charges ofequivalent effect 39939818.4 Prohibition of discriminatorytaxation 40518.5 Harmonisation of indirecttaxation 41018.6 Conclusions 41119 Free movement of goods19.1 Introduction 41219.2 Outline of provisions 41319.3 Whose actions are caught? 41419.4 Types of act caught by Articles28-9 41719.5 Prohibition on quantitativerestrictions 41719.6 Prohibition on measures havingequivalent effect to quantitativerestrictions 41841219.7 Prohibition, as between MemberStates, of quantitative restrictions onexports and of all measures havingequivalent effect (Article 29) 43719.8 State monopolies 43819.9 Relationship with other treatyprovisions 44019.10 Conclusions 44020 Derogation from the free movement of goods20.1 Introduction 44220.2 Outline of Article 30 44220.3 Proportionality and disguisedrestriction on trade 44338520.4 Grounds for derogation 44420.5 Derogation provisions other thanArticle 30 EC 45220.6 Conclusions 453442xi

xiiDetailed contents21 Citizenship: Rights of free movement and residence21.121.221.321.4Introduction 455Overview of provisions 456Enforcement 458Personal scope: Who benefits? 45921.5 Material Scope: Rights of access ofthe host Member State (Directive2004/38/EC) 47821.6 Conclusions 48922 Economic rights: Workers, establishment, and services22.122.222.322.4Introduction 491Treaty provisions 492Right of access to the market 493Test for the application of Articles 39,43, and 49 EC 50022.5 Limitations on the application ofArticles 39, 43, and 49 507A Rule of reason? 508Harmonisation 512Professional qualifications 517Establishment, services 1 andcompanies 52122.10 Conclusions 52752923.4 Citizenship 54723.5 Citizenship directive 55123.6 Conclusions 55255324 Right to receive services24.1 Introduction 55324.2 General 55324.3 Non-discrimination and Unioncompetence 55524.4 Scope of services: Corollary to theright to receive 55724.5 Remuneration and the role of thestate 55824.6 Assessment of the position of publicservices under Article 49 56124.7 Legislation 56224.8 Conclusions 56325 Free movement of persons: Limitations on groundsof public policy, public security, or public health25.1 Introduction 56525.2 Scope of Directive 2004/38/ECand its relationship with treatyprovisions 56625.3 Substantive grounds forderogation 56725.425.525.625.7565Person

29 Element of competition law in the internal market 664 30 . 1.5 Treaty on European Union 7 1.11 Conflicting attitudes towards 1.6 Impact of the Treaty of the Union 21 Amsterdam 10 1.12 The future 23 2 Institutions of the Union: Composition and powers 25 2.1 Introduction 25 2.7 Committee of the Regions 41 2.2 The institutions 25 2.8 Budgetary procedures 42 2.3 Parliament (Articles 189-201 2 .