The Italian Job: the CJEU strengthens criminal law protection of the EU’s finances

Steve Peers

The stereotype of fraud against the EU budget is a sleazy EU official in Brussels receiving manila envelopes stuffed full of bribe money, spending his ill-gotten gains to ensure that his lavish lifestyle becomes ever more decadent. But according to the EU’s annual reports on such fraud, the typical offender is actually rather different: it’s an individual or company who finds ways to get hands on EU money being spent by the Member States, since they are largely in charge of the day-to-day management of EU spending. Furthermore, not all the breaches concern EU spending: some concern the reduction of EU income, for instance by avoiding the customs duties which apply to many goods coming from third countries. 

Agreeing and enforcing EU-wide rules for such behaviour has long been a challenge. But in its recent judgment in Taricco, the Court of Justice has made a major effort to strengthen the law in this field.

Background

The CJEU ruled back in the 1980s (in the Greek maize judgment) that Member States could not simply ignore fraud against the EU budget, but had to take effective measures to stop it. This rule was later added to the Treaties, and now forms Article 325 TFEU, which reads in part as follows:

1.      The Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union’s institutions, bodies, offices and agencies.

2.      Member States shall take the same measures to counter fraud affecting the financial interests of the Union as they take to counter fraud affecting their own financial interests.

As regards criminal law, the current legal rules on the topic date back to 1995, and were adopted in the form of an international Convention (the ‘PFI Convention’) between the Member States, which came into force in 2002. This treaty applies to all Member States except for Croatia (although the Commission has just proposed its application to that State), and the UK – which was initially a party but no longer has legal obligations to apply the Convention since it opted out of many pre-Lisbon criminal law measures as from 1 December 2014 (on that process, see further here). Among other things, the PFI Convention obliges all Member States to impose criminal sanctions for serious cases of fraud against the EU budget.

The Commission proposed a Directive to replace the Convention in 2012, and this is currently in the late stages of negotiation between the Council and the European Parliament (for an update, see here; on the legal basis, see here). It’s evident that one of the main issues remaining in the negotiations is whether the proposed Directive should apply to VAT fraud, given that a small amount of VAT revenue goes to the EU budget. The Commission and the European Parliament argue that it should, while the Council argues against, presumably because the far larger part of the losses from VAT fraud affects national budgets, not the EU budget. There are other issues in the proposed legislation, such as a more precise possible penalty for fraud, and a rule on ‘prescription’ periods (ie the time limit after which a prosecution can no longer be brought or continued).

The proposed Directive is closely connected to another piece of proposed EU legislation: the Regulation establishing the European Public Prosecutor’s Office (EPPO). That’s because the EPPO will have jurisdiction only over EU fraud, and so it’s necessary to have a definition of that concept. (On the defence rights aspects of the EPPO proposal, see discussion here); for an update on negotiations, see here). And the EPPO Regulation is in turn linked to a third legislative proposal: the Regulation refounding Eurojust, the EU’s agency for coordinating national prosecutions. That’s because there will be close links between Eurojust and the EPPO, and so the Eurojust Regulation can’t be finalized before the EPPO Regulation is agreed. (The Council has agreed all of the Eurojust Regulation except for the bits relating to EPPO links: see the agreed text here. This will still have to be negotiated with the European Parliament, however).

Judgment

The recent CJEU judgment in Taricco concerns alleged VAT fraud against a national budget, and in particular the question of prescription periods. Italian rules on the breaks in prescription periods mean few cases involving VAT fraud are ever seen through to completion, since time simply runs out during the proceedings.  A frustrated Italian court therefore asked the CJEU whether these national rules infringed the economic law of the EU: namely the rules on competition, state aids, economic and monetary union and the main VAT Directive.

According to the CJEU, the national law does not infringe EU competition law, because inadequate enforcement of criminal law does not as such promote cartels. It does not infringe state aid law, because the Italian government was not waiving tax obligations as such. Furthermore, it does not infringe monetary union rules, since it was not closely enough linked to the obligation to maintain sound public finances.

That left the VAT Directive. In fact, that Directive sets out the scope of VAT (ie which goods and services have to be taxed), but does not include any rules on criminal law issues. The Court therefore assumed that the national court was asking it questions about EU law more generally, and proceeded to interpret Article 325 TFEU and the PFI Convention. According to the Court, building on the previous case law such as Fransson, there was not only an obligation pursuant to the VAT Directive and Article 325 TFEU to take effective measures in general against VAT fraud to defend the EU budget, there was also a specific obligation to criminalise such activity, where it was ‘essential to combat certain serious cases of VAT evasion in an effective and dissuasive manner’. This was consistent with obligations under the PFI Convention; the Court confirmed that the Convention applied to VAT fraud, despite the absence of express provisions to this effect under the Convention. Given the size of the alleged fraud in this case (several million euros), it had to be considered serious.

Furthermore, the Court ruled that the operation of the limitation periods in Italian law infringed Article 325 TFEU. A limitation period was not objectionable as such, but national law made it effectively impossible to prosecute offences because the way in which it calculated breaks in the prosecution. Also, the national law infringed the principle of equality set out in Article 325, since other national laws on similar types of economic crime did not contain the same problematic rules on calculation of breaks.

The Court then ruled on the consequences of this breach of EU law. In the Court’s view, the national court has to disapply the relevant national law. This obligation was based on Article 325 TFEU, which sets out precise and unconditional rules on effective and equal protection of the EU’s financial interests. So the ‘precedence’ (ie, primacy or supremacy) of EU law required national law to be disapplied.

Finally, the CJEU dismissed a human rights objection to its ruling. While Article 49 of the EU Charter of Fundamental Rights does ban the retroactive application of more stringent criminal penalties than those in force when a crime was committed, the CJEU ruled (following the case law of the European Court of Human Rights on the equivalent Article 7 ECHR) that a limitation period was distinct from a substantive criminal offence. The acts which the defendants were accused of committing were undoubtedly criminal offences in national law at the time of their alleged commission, so there was no retroactivity of criminal law in the sense prohibited by the Charter.

Comments

“You were only supposed to blow the bloody doors off!” This classic quote from The Italian Job aptly summarises the CJEU’s approach to the relationship between national law and EU law in this judgment. Asked only to rule on the interpretation of EU economic law, the Court decided instead to strengthen the constitutional foundations of EU law in the criminal field.

Substantively, the Court’s judgment is significant because it extends EU criminal law obligations to VAT fraud. This is, in the Court’s view, a pre-existing obligation not only in the PFI Convention, but also in the TFEU itself. To overturn it, Member States would therefore have to amend the Treaty, not just the Convention (in the form of the proposed Directive). Also, Member States’ obligations extend not only to criminalisation of serious cases of VAT fraud, but to prescription (and so potentially other procedural issues) as well.  So if Member States (in the Council) do insist on excluding VAT from the scope of the EU fraud Directive, that would have limited impact. Indeed, the Council Presidency has already asked Member States if there is any point maintaining their opposition on this point after the Taricco judgment.

Presumably the Court’s rulings on prescription and criminalisation apply to other forms of EU fraud too. This means that including prescription rules in the Directive (as all of the EU institutions are willing to do) simply confirms the status quo – although the final Directive will likely be more precise on this issue than the CJEU’s ruling. Furthermore, since the Taricco judgment could help to unblock talks on the PFI Directive, this could have a knock-on effect on the negotiations on the EPPO and Eurojust.

Moreover, the Court’s ruling limits the effect of various opt-outs. Ireland and Denmark have opted out of the proposed Directive, but will remain bound by the PFI Convention; the UK has opted out of both. But they remain bound by the Court’s interpretation of the Convention (for Ireland and Denmark) and the Treaty (for all three Member States). This has limited practical impact, as long as national law remains compliant (assuming that it is already compliant) with these measures as interpreted by the Court. While the UK is no longer free to decriminalise fraud against the EU budget, it was never likely to use that ‘freedom’ anyway, particularly as regards VAT fraud, where the main loss would be to the British government’s revenue, not the EU’s.

More fundamentally, the Taricco judgment strengthens the constitutional foundations of criminal law obligations in the EU legal order. While this may only be relevant for EU fraud cases, the Court has already broadened that concept to include VAT fraud. In such cases, there is an obligation for national courts to disapply incompatible national law as regards the procedural aspects of criminal proceedings. Conversely, there is no obligation to disapply incompatible substantive national criminal law, since this would lead to a breach of Article 49 of the Charter.

The ruling is based on the legal effect of the Treaties – the Court does not rule on the legal effect of the ‘third pillar’ Convention. It sets out a test for primacy similar to the test for direct effect (the Court refers to the precise and unconditional nature of the rules in Article 325 TFEU). It is not clear how this rule fits into the EU’s overall constitutional architecture – as a clarification of the general rules or as a special rule relating to protection of the EU’s financial interests. But in any event, the Taricco judgment is a significant contribution toward strengthening the EU’s role in this particular field. 

  

Barnard & Peers: chapter 25, chapter 6

Photo credit: dailymail.co.uk

EU citizens’ access to benefits: the CJEU clarifies the position of former workers

Steve Peers

Today’s CJEU judgment in Alimanovic clarifies again the meaning of the EU law rules on the thorny issue of EU citizens’ access to benefits in another Member State. Like last year’s judgment in Dano (discussed here), it takes a more restrictive approach than suggested by the Court’s prior case law. However, like that prior judgment, today’s ruling leaves some issues open. I will discuss in turn the judgment itself, the impact on EU citizens' access to benefits, and the UK government's plans to renegotiate the country's EU membership. 

As a starting point, on the issue of EU citizens’ access to benefits, it is important to make distinctions as regards three issues: (a) the status of the person applying for the benefit ((i) not economically active; (ii) first-time job-seeker in the host State; (iii) previously employed in the host State; (iv) currently in work; (v) permanent resident); (b) the type of benefit at issue (social assistance, or concerning access to the labour market); and (c) whether the dispute concerns access to benefits or expulsion of the person concerned.

The judgment

The Alimanovic case concerns a Swedish woman and her daughter who had worked in Germany briefly, then lost their jobs. They sought a particular benefit in Germany, and the national court asked the CJEU if they were entitled to it.

First of all, the Court reiterated and expanded on what it had said in Dano: the benefit in question was a ‘social assistance’ benefit, not a benefit relating to labour market access. This distinction is important because the EU citizens’ Directive states that access to ‘social assistance’ benefits can be denied to first-time job-seekers, for as long as they are seeking work, and to all EU citizens during their first three months of residence. Furthermore, the Court’s previous case law (interpreting the Treaty rules on free movement of workers) states that first time job-seekers were entitled to benefits relating to labour market access, but not to social assistance benefits. The Court references that case law obliquely in the Alimanovic judgment, but does not either reaffirm or denounce it; it should be noted that a case about job-seekers’ access to this same benefit is pending (Garcia-Nieto: see the Advocate-General’s opinion in that case here).

Secondly, the Court then turned to the question of whether EU citizens who were previously briefly employed in the host State could be denied social assistance benefits. The previously employed are not one of the two categories of people specifically excluded from equal treatment to social assistance benefits by the citizens’ Directive; but that does not necessarily mean that they have access to those benefits.

To determine whether they had access to those benefits, the Court interpreted the equal treatment rule in the Directive, which states that equal treatment applies to all those EU citizens ‘residing on the basis of this Directive’ and their family members (leaving aside the exclusions which were already mentioned, as well as other exclusions in the Treaties or other EU legislation). So were the two benefit claimants residing on the basis of the Directive?

The Court ruled that they were not still covered by the Directive as former workers, since the Directive says that those who work in the host State for less than one year (as in their case) retain ‘worker’ status for at least six months after becoming unemployed. After that point, a Member State can (as Germany did) terminate their worker status, which means (unless they have another basis to stay, which was not relevant in this case) they are no longer covered by the equal treatment rule, and lose access to social assistance benefits. The national court also took the view that they could be classified as first-time job-seekers, although the Court pointed out that in that case, the Directive expressly permits Germany to refuse access to social assistance benefits.

Next, the Court distinguished prior case law which requires an individual assessment of whether an EU citizen could be expelled or is an ‘unreasonable burden’ on the social assistance system of the host State. In this case, no such assessment was needed, because the citizens’ Directive already took account of the individual position of workers. The specific period of retaining worker status set out in the Directive and national law ensured legal certainty, while ‘while complying with the principle of proportionality’. Finally, when considering whether there was an ‘unreasonable burden’ on national systems, the individual claim did not count: rather the total of all claims would be ‘bound to’ constitute such a burden.

Comments

As in Dano, the CJEU does not expressly overturn prior case law, but makes it easier for Member States to justify refusal of benefits than might otherwise have been the case under prior case law. (See by analogy the comparison of Dano with prior case law here). It’s unsurprising that the benefit at issue is ‘social assistance’, as the Court previously assumed in Dano, although this postpones any further clarification of the questions of access to labour-market related benefits for the various categories of EU citizens.

However, it’s rather more surprising that the Court simply applies the Directive’s definition of former workers. As recently as last year, in its judgment in Saint-Prix (discussed here), the Court insisted that the concept of ‘worker’ was set out in the Treaties, not secondary legislation, and so it fell mainly to be defined by the Court. In that ruling, the Court asserted that a woman who gave up work just before giving birth retained ‘worker’ status (and so access to benefits) under certain conditions. Yet in today’s judgment, the Court simply follows the Directive’s definition of former worker, without overruling or distinguishing (or even mentioning) the prior judgment. Certainly, as the Court said, following the precise wording of the Directive on this point promotes legal certainty; but it hardly promotes legal certainty to simply ignore apparently conflicting lines of case law.

For the record, the other circumstances in which the Directive requires ‘worker’ status to be retained are where: the worker is ‘temporarily unable to work’ due to illness or accident (the words ‘temporarily unable’ are not further defined); the worker is unemployed after more than one year’s work, if he or she is ‘registered as a job-seeker with the relevant employment office’; or the worker has begun vocational training, although this must be linked to the worker’s prior employment unless the worker is involuntarily unemployed.

Equally, it’s surprising that the Court ruled out a requirement for an individual assessment of the former worker’s position, which the Advocate-General had advocated (see discussion here). The Court draws a distinction between the individual assessment which the Directive implicitly requires as regards expulsion (more on expulsion of the unemployed after the Dano judgment here) and the issue of access to benefits. And the protection of the right of residence which the EU legislature expressly set out for beneficiaries of social assistance in the Directive has effectively been removed by the Court’s interpretation in today’s judgment, which seems to set out an irrebuttable presumption that any individual application for social assistance constitutes an ‘unreasonable burden’ on national systems, due to the applications made by other people in the same situation.

EU citizens’ access to benefits and expulsion: where do we stand?

It’s useful to summarise where we stand after this judgment as regards various categories of EU citizens’ access to benefits and expulsion.

(i) not seeking work: not entitled to social assistance, or labour market benefits; no automatic expulsion;

(ii) first-time job-seeker in the host State: not entitled to social assistance, entitled to labour market benefits; no expulsion as long as they can show evidence of job-seeking and genuine chance of employment;

(iii) previously employed in the host State: retain worker status on conditions set out in the Directive, or during break from employment due to maternity on conditions set out in Saint-Prix; therefore still entitled to social assistance or labour market benefits; no expulsion; if they do not meet the conditions to retain worker status, Alimanovic assumes that the rules on first-time job-seekers apply by analogy;

(iv) currently in work: entitled to social assistance or labour market benefits; no expulsion.

(v) permanent residents (those resident for more than five years legally): full equal treatment regarding benefits and their status is no longer dependent on not applying for social assistance; no expulsion.

   

Of course, any EU citizen can be expelled on grounds of public policy, public security or public health, subject to the detailed rules in the Directive; the references to expulsion above refer to expulsion on other grounds. Permanent residents have enhanced protection against expulsion on grounds of public policy, public security or public health.

Implications for the UK’s renegotiation of EU membership

Finally, this brings us to the elephant in the room: does today’s judgment have any implications for David Cameron’s renegotiation of the UK’s EU membership? Last year, Cameron outlined nine objectives specifically related to the free movement of EU citizens (he also has objectives on other issues, as discussed here).

I examined those nine objectives in detail at the time (see here). Let’s look at those nine objectives again, in light of today’s judgment. I have underlined the impact which the judgment might have on certain issues (I haven’t copied all of the prior analysis, but only those parts which might be affected by the judgment). As we can see, in general the judgment makes it easier to achieve the negotiation objectives of curtailing the benefits of former workers who are now unemployed, but it reaffirms the difficulty of changing rules relating to expulsion of job-seekers.

1. No access to tax credits, housing benefits and social housing for four years for EU citizens

For EU citizens who are not workers, work-seekers or former workers, this confirms the status quo, as set out in Dano.

For EU citizens who are work-seekers, the free movement of workers in the Treaties (as interpreted by the CJEU) requires Member States to give them access to benefits linked to labour-market participation. These benefits would probably not be covered by that rule. So this confirms the status quo.

For EU citizens who are workers (as defined by the Treaties and CJEU interpretation) or former workers (as defined by EU legislation, and the CJEU interpretation of the Treaties), there is a right to equal treatment.  As regards workers, changing this rule would require a Treaty amendment. However, as regards former workers, the Alimanovic judgment implicitly suggests that it is generally up the EU legislature to determine when they retain the status of ‘worker’. So potentially access to benefits could be curtailed for former workers by means of amending secondary law – although the CJEU did refer to the principle of proportionality in this context.

2. Removal if job-seekers do not find a job within six months

For EU job-seekers, the EU legislation states that they cannot be expelled as long as they ‘can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged’. This reflects the case law of the CJEU, interpreting the Treaties (Antonissen judgment). Therefore this change would require a Treaty amendment. The Alimanovic judgment reaffirms this rule in the legislation.

3. Ending the entry of non-EU family members without restrictions

Not relevant to the Alimanovic judgment.

4. Tougher and longer re-entry bans for foreign rough sleepers, beggars and fraudsters

Not relevant to the Alimanovic judgment. But note that re-entry bans are not possible at the moment for rough sleepers and beggars: Article 15(3) of the EU citizens’ Directive states unambiguously that a ban on entry cannot be imposed where a person was expelled for grounds other than public policy, public security and public health; and Article 27(1) states clearly that such grounds ‘cannot be invoked to service economic ends’. This rule could possibly be overturned by EU legislative amendment, but it is possible that the CJEU would find that this would constitute a disproportionate restriction on free movement for those who were entering to obtain work later. So a Treaty amendment might be needed.

5. Stronger measures to deport EU criminals

Not relevant to the Alimanovic judgment.

6. Longer waiting periods for free movement of persons from new Member States

Not relevant to the Alimanovic judgment.

7. EU citizens to have a job offer before entry

Not relevant to the Alimanovic judgment. But the CJEU reiterated the current rule in EU legislation that EU citizens can stay if they are a job-seeker, subject to the proviso that they have a genuine chance of getting work. So this proposal would require a legislative amendment and a Treaty amendment, since the CJEU has said (in Antonissen) that the Treaty right to free movement of workers also applies to job-seekers, giving them the right to enter and stay in a Member State to look for work.

8. No taxpayer support for job-seekers

The EU legislation already rules out social assistance for job-seekers, so this reflects the status quo. However, the CJEU has said that job-seekers have a right to access benefits linked to labour market participation, if they have a link already with the labour market in question. While David Cameron suggested that the UK’s future Universal Credit would not fall within the scope of the CJEU’s case law, that would likely be challenged in practice. So a Treaty amendment is likely necessary as regards current rules, and possibly necessary as regards universal credit. As regards job-seekers who are former workers, the Alimanovic judgment makes it easier to deny them social assistance, and to tighten the rules to this end by means of amending secondary EU law, as discussed above.

9. Payment of child benefit to children abroad

Not relevant to the Alimanovic judgment. But note that there is a case pending before the CJEU on the separate question of the UK’s restrictions on payment of child benefit to children of some EU citizens living in the UK (the ‘habitual residence’ test).

Barnard & Peers: chapter 13

Studying EU Law: A Law Student's Guide

Catherine Barnard, Trinity College, Cambridge*

You’ll love studying EU Law if you like politics, if you are a visionary, if you are a pragmatist. In other words, EU law has something in it for everyone – and even if you are none of those things, you must study it because it’s compulsory. But bear in mind EU law is unlike anything you'll have studied before: whatever 'types' of law you've liked before, EU law doesn't 'fit' into any single category (e.g. public v. black-letter). Here are some words of advice.

1.       Give yourself a political health-check before starting out: it's helpful to  recognise any preconceptions you have about the EU politically before starting to study the law. Every student comes at the law from a certain angle, so it's good to think about where you sit in terms of the politics before you start to engage in the debates around the law/what it should be.

2.       Be prepared to change what you think: law and politics are inextricably linked, so studying EU law has the potential to change your views about the EU as a political institution - some students undergo a complete volte-face.

3.       Most courses start with an introduction to the EU institutions. Most students don’t find that the most exciting part of the course, at least not at the beginning, but hang on in there. Think of it as learning the building blocks of the system. These institutions are crucial to the functioning of the EU system. It’s the Commission which comes up with the legislative proposals, it’s the European Council where much of the real power now lies for big decisions, and the European Parliament now has the joint final say on most legislation with the Council of Ministers (comprised of ministers of the 28 Member States, all accountable to their own national parliaments). And what the Court does, will occupy much of your time.

4.       If you can, visit the institutions - it will bring some of this to life. If not, look at their websites, the live streaming of parliamentary debates. Don’t think of the institutions as dull buildings but as comprised of people operating in an international environment trying to find ways of addressing some of the most intractable problem of our times: the Eurozone crisis, the refugee crisis, climate change, mass unemployment.

5.       The institutions become much more interesting when you start thinking about whether they should be doing what they are doing and how they are doing it. The European Parliament has a lot of power yet in the last European Parliament elections in 2014 only 43% of the overall EU population bothered to vote (60% in the UK, 13% in Slovakia). Why is that? Many people talk of the democratic deficit in the EU. But is the EU worse than many of the Member States? Should the EU be assessed by the standards applied to a sovereign state? Can the EU even be considered a state? If not, should it be aiming to become one?

6.       The Foundation Treaties (EEC, ECSC [now abolished], Euratom) have been amended on a number of occasions by further Treaties. Try to develop a sense of which Treaty introduced which major change. This will provide you with some sort of historical perspective and help you understand the context in which decisions were made. The Treaties are often referred to by the place in which they were signed. By far the most important changes were introduced by the Maastricht Treaty in 1992. Most notably, that Treaty introduced the (flawed) provisions on Economic and Monetary Union. Also important was the Lisbon Treaty which divided up the existing provisions of the Treaty into two Treaties of equal value: the more ‘constitutional’ provisions (eg guiding principles, allocation of powers) were put in the Treaty on European Union (TEU), the other, more ‘operational’, principles were put in the inelegantly named Treaty on the Functioning of the European Union (TFEU) (eg the rules on free movement of goods, persons, services and capital, how to access the Court of Justice).

7.       The bugbear of all students (and anyone involved in EU law) is that with the Treaty amendments came new numbers. Originally, the change was indicated by calling the new provision A, B etc. So the new legal basis giving the EU power to regulate the Single Market was Article 100A, inserted after Article 100 giving powers to the EU to adopt measures to establish the Common Market. This seemed logical and straightforward. However, this approach was not considered sufficiently transparent and so the EU decided to renumber every provision of the Treaty not once, but twice, first in 1997 by the Amsterdam Treaty and again in 2009 by the Lisbon Treaty. So what is now Article 34 TFEU on the free movement of goods was originally Article 30 EEC and then Article 28 EC (the term EEC was replaced by EC at Maastricht and then by the term ‘EU’ at Lisbon). Extremely unhelpful, especially when reading older cases. There are destination tables in the front of your statute books and the leading textbooks. The modern practice is generally to use the Lisbon number even in discussing older cases (ie use Article 34 TFEU rather than Article 30 EEC or Article 28 EC) .

8.       Much of your time will be spent looking at the Court of Justice, which in fact comprises three courts: the Civil Service Tribunal (dealing with appeals from cases brought by the staff of the EU [‘F’ cases]), the General Court (formerly the Court of First Instance[‘T’ cases]), which hears a lot of competition cases and so called direct actions on the validity of EU law, and the Court of Justice of the EU which hears all other cases (‘C’ cases). The citation of cases has recently changed. The changes are usefully summarised here. The Court of Justice sits in Chambers of three or five judges, or as the Grand Chamber or, very occasionally, as the Full Court. As a rule of thumb, the more important cases are decided by the Grand Chamber or the Full Court.

9.       Judgments of the Court of Justice look different to those of the common law courts. There is a single judgment and no dissents or concurring opinions. Generally, cases are shorter. There is a helpful summary of what the Court has decided at the end of the judgment (the dispositif). If the case is a preliminary reference (ie questions from the national court as to the meaning or validity of EU law), look in the early part of the judgment for the key facts, often set out by the Court just after it has set out the relevant provisions of EU law and national law. The Court will then try to answer the national court’s questions. Sometimes the final outcome of the case is not clear.  This is as it should be: under the division of powers between the national courts and the Court of Justice, the Court of Justice interprets EU law, the national courts apply that interpretation to the facts. Sometimes, in important or difficult cases, the Court of Justice does what it should not and tells the national court whether the national law is, for example, justified and proportionate. Cases are then often settled prior to a final hearing in the national courts.

10.   Try to read the Advocate General’s (AG) ‘advisory’ Opinion too, especially if you want to really understand what is going on. Essentially, the AG’s Opinion is more like a common law judgment (but without being binding); it is essentially one Judge’s view as to what the answer to the case should be. The Court is not obliged to follow what the AG says but does so in, it is thought, about 70% of cases. Some AG’s Opinions are considered classics (eg AG Jacobs’ Opinion in Case C-50/00P UPA v. Council [2002] ECR I-6677)

11.   The Court of Justice is often considered an activist Court, giving surprising rulings which push back the frontiers of the law. For some people the ‘activist’ label is intended as a criticism. But bear in mind that the Court is often working against an incomplete canvas. The Treaty doesn’t lay down every rule and it is up to the Court to shape the system against an understanding of the broader aims of the EU, for example the creation of a functioning single market. Ask yourself how you would have decided the case if you had been in the Court’s shoes. Remember, too, that the Court’s working language is French but that cases can be pleaded in anyone of the 24 official languages of the EU and the Court has to interpret legislation in any of the 24 languages.

12.   One of the most difficult questions for the Court is how to operationalise the relation between the centre (the EU) and the Member States (MS). In other words, a number of the Court’s decisions affect what MS can do and what the EU can do. So every time the EU finds a national rule breaches, say, Article 34 TFEU on the free movement of goods, it makes inroads into the States’ freedom to regulate in that area and it gives the EU the power to (re)regulate those matters. These are highly sensitive political matters. Think of the headlines: ‘Court of Justice tells UK/Scotland to stop minimum alcohol pricing’. The Court’s decisions have a direct impact on decisions taken by democratically elected governments.

13.   One of the main focuses now on an undergraduate course is the role of the EU Charter of Fundamental Rights. Adopted in 2000 and with legal force since 2009, the Charter has had a significant effect, not perhaps as much as it supporters may have liked, but important nonetheless. The Charter has been used to declare provisions of EU law invalid, and significantly steer the interpretation of EU law (for better and worse). It has, however, major limitations, not just the misnamed UK opt-out. Studying these limits will occupy much of your time.

14.   The Charter borrows a number of rights from the European Convention on Human Rights (ECHR) but remember that the two documents belong to two different systems: the ECHR is a product of the Council of Europe, it is adjudicated on by the Court of Human Rights (sitting in Strasbourg) and applies to 47 States (including the 28 Member States of the EU, but also other states such as Russia). The Charter applies to the EU institutions and to the Member States, but the latter only when they are implementing EU law. It is applied and interpreted by the Court of Justice (sitting in Luxembourg). A recent attempt for the EU itself to accede to the ECHR has been rejected by the Court of Justice.

15.   One of the other major issues that you will consider is the role and function of EU citizenship. Everyone holding the nationality of a Member State is also a citizen of the EU. What does that mean in practice? Does it have merely rhetorical value or does it, in fact, give substantive rights, particularly for those on the margins of society? What implications does EU citizenship have on the right to secure a job or claim benefits in another MS?

16.   These questions and many others will feed into the UK referendum campaign. Studying EU law will make you feel more involved in the debates and enable you to participate in them in a more informed way. It will also give you a more nuanced understanding of what the EU is about and what problems it is up against. The outcome of the referendum will affect you for the rest of your adult life. It is something to engage with seriously. So read about the debates, listen to speakers, attend seminars, speak, campaign. Get involved.

17.   Reading articles and opinion-based pieces is key to enjoyment of EU law, because there is so much to debate and the parameters of that debate are always evolving. There are, of course, a number of dedicated academic journals (e.g. Common Market Law Review, Cambridge Yearbook of European Legal Studies, European Law Review, European Law Journal, Yearbook of European Law). In addition, there are many sources of information about EU law online. All the institutions have websites and active twitter feeds. There are also a number of EU law blogs (e.g. this blog [EU law analysis], EUtopia, European law blog). The Financial Times is the best source of news and comment on EU matters.

18.   Remember, too, that there is also a lot of misinformation out there too, and not just about bendy bananas. Take, for example, the front page headline in the Daily Express ‘Teach Boys to Dust says EU: Barmy Brussels latest call for gender equality’. The UK Rep of the European Commission does attempt to address these euromyths but it pays you to read all reports with a healthy scepticism.

19.   When it comes to exams, please remember that the Advocate General is not the Attorney General, Francovich is not Francovitch, direct effect is different to direct concern, and the Court of Justice sits in Luxembourg, not Strasbourg. Once you have mastered these basics you will be well on your way.

20.   Most importantly, remember just how exciting and dynamic EU law is. It is a subject constantly in flux. The destination of the EU project is by no means fixed. There is so much still to decide. There is much uncertainty and much that is unknown. As one former student put it: ‘At times this seems a bit overwhelming, but reframing it as an opportunity for debate makes it a really rewarding subject.’

Enjoy.

*Thanks to George Apps, Alicia Hinarejos, Amy Ludlow, Steve Peers, and Emmeline Plews for their thoughts and comments

'Safe countries of origin': Assessing the new proposal

Steve Peers

Among the large number of new initiatives taken by the EU Commission regarding immigration and asylum last week, three of them are proposals for binding measures: a second temporary measure relocating asylum-seekers; a permanent system of relocation for asylum-seekers; and a Regulation setting out a common list of ‘safe countries of origin’ – which would consist of the Western Balkans countries and Turkey. I will be commenting on the relocation proposals in future, but for now I want to examine the ‘safe country of origin’ rules.

It should be noted that the UK, Ireland and Denmark have an opt-out from all of these measures, and the European Parliament (EP) is only consulted on the temporary relocation proposal. However, the EP has its usual joint decision-making role on the proposals for a permanent relocation system, and for the ‘safe country of origin’ list.

Background: the ‘safe country of origin’ idea

Two central misconceptions about the ‘safe country of origin’ concept must be dispelled at the outset. First of all, designating a country as a ‘safe country of origin’ doesn’t mean that all asylum applications from that country’s citizens are automatically refused. Rather it creates a presumption of safety – but that presumption is rebuttable.  It will likely be harder to rebut that assumption, since such applications are usually fast-tracked (more on the details below). But it is not absolutely impossible.

Secondly, the ‘safe country of origin’ concept is different from a ‘safe third country’ concept. A ‘safe country of origin’ is a country where its own citizens are generally not persecuted, whereas a ‘safe third country’ is a country where an asylum-seeker who came from a different country should (in the view of the country applying that rule) have applied for asylum instead.

The two rules have different consequences: the ‘safe country of origin’ rule goes to the heart of the definition of refugee, because it concerns the treatment of the asylum-seeker in the country of origin. But the ‘safe third country’ rule doesn’t address the question of whether the asylum-seeker was safe in the country of origin: it simply asserts that the asylum seeker should have applied for asylum somewhere else. It’s for that other State to decide whether or not the asylum-seeker has sufficient grounds to be considered a refugee, or to get another form of protection. For that reason, EU asylum law classifies the ‘safe third country’ rule as a rule determining the admissibility of an asylum application, not its merits.

Are the two groups of countries the same? Not necessarily. It may sound odd to say that a country can be ‘safe’ in one context, but not ‘safe’ in another. But let’s put it another way: can we imagine that a State might treat its own citizens reasonably well, but treat asylum-seekers badly? I’ll return below to the question of whether some of the key Western Balkans states can in fact be considered ‘safe third countries’ as well as ‘safe countries of origin’.

Even before EU asylum law was first adopted, some countries had their own national version of the ‘safe country of origin’ concept. The first-phase EU asylum procedures Directive, adopted in 2005, put in place a minimum degree of harmonization for the concept. It specified (in an Annex) that these were countries where there was:

“generally and consistently no persecution as defined in Article 9 of Directive 2004/83/EC [the first-phase qualification Directive, defining refugee and subsidiary protection status], no torture or inhuman or degrading treatment or punishment and no threat by reason of indiscriminate violence in situations of international or internal armed conflict.

In making this assessment, account shall be taken, inter alia, of the extent to which protection is provided against persecution or mistreatment by: (a) the relevant laws and regulations of the country and the manner in which they are applied; (b) observance of the rights and freedoms laid down in the European Convention for the Protection of Human Rights and Fundamental Freedoms and/or the International Covenant for Civil and Political Rights and/or the Convention against Torture, in particular the rights from which derogation cannot be made under Article 15(2) of the said European Convention; (c) respect of the non-refoulement principle according to the Geneva Convention; (d) provision for a system of effective remedies against violations of these rights and freedoms.”

The Directive also allowed Member States to designate part of a country as safe, or to maintain pre-existing national rules which had a lower standard. It also specified that to apply a ‘safe country of origin’ rule, Member States had to ‘have regard to the legal situation, the application of the law and the general political circumstances in the third country concerned’. Their ‘assessment of whether a country is a safe country of origin’ had to ‘be based on a range of sources of information, including in particular information from other Member States, the UNHCR, the Council of Europe and other relevant international organisations’.

As noted above, the list could only create a presumption of safety. More precisely, the Directive stated that the presumption could only apply if the asylum-seeker ‘has not submitted any serious grounds for considering the country not to be a safe country of origin in his/her particular circumstances and in terms of his/her qualification as a refugee in accordance with Directive 2004/83/EC’. Member States were also obliged to ‘lay down in national legislation further rules and modalities for the application of the safe country of origin concept’.

The Directive allowed (but did not require) ‘safe country of origin’ applications to be fast-tracked. In that case, while all the basic procedural rights still applied in principle, Member States had an option to skip a personal interview, and there were deadlines for decision-making and appeals in national law which made it much harder for applicants to make their case. It was more likely that appeals would not have suspensive effect (allowing the asylum-seeker to stay on the territory during the appeal) in such cases.

At the last minute while negotiating this Directive, a group of larger Member States decided it would be a good idea to have a common list of ‘safe countries of origin’ – over ten years ahead of the Commission’s recent proposal. But they then squabbled for 18 months over which States should be on this common list (EU asylum law decision-making then had to be unanimous). They eventually gave up agreeing the list straight away, but left a clause in the Directive allowing for the possibility of adopting a common list in future. That clause was in turn challenged successfully by the EP before the CJEU; the Court struck down the clause on the grounds that any such common list could only be adopted by means of a legislative or ‘comitology’ procedure, not the ad hoc procedure that the Council had made up.

When it came to the second-phase procedures Directive, which was adopted in 2013 and has applied to all asylum applications made since July 20 2015, there was no interest in returning to the concept of a common list. The basic criteria for designating a ‘safe country of origin’ remain the same, but the possibilities of keeping pre-existing lower standards, or of designating part of a country as ‘safe’, were dropped. (However, it’s still possible, under the qualification Directive, to argue that an asylum-seeker could have fled to safety within his or her own country). The safeguards for individuals to rebut the presumption were retained. It’s still possible to fast-track a ‘safe country of origin’ application, but the option to skip the personal interview was dropped. Finally, although the second-phase Directive now allows applicants in principle to stay pending the outcome of an appeal, it’s also possible for Member States to derogate from this rule in ‘safe country of origin’ cases (as well as some others), as long as the applicant has the right to challenge his or her removal before a court first.

The Commission proposal

The Commission suggests that all Western Balkans states and Turkey be listed as ‘safe countries of origin’. This would apply nearly immediately (twenty days after publication of the Regulation). Member States would still have the option to list other countries as ‘safe countries of origin’ pursuant to the procedures Directive, which would only be amended in order to insert cross-references to the new Regulation. The individual safeguard (the possibility of rebutting the presumption) would remain. Member States would not explicitly be required to fast-track applications from these countries as a consequence, but it’s likely that most or all of them would.

The Commission has made this proposal because there has been a sharp increase in the number of asylum-seekers from the Western Balkans in the last couple of years, and there has been a high rate of refusals of applications from these countries. Further evidence of concern about this issue is a report from the European Asylum Support Office (EASO) on applications from the Western Balkans, recently updated here, and the conclusions of the JHA Council in July, which urged all Member States to consider listing Western Balkans states as ‘safe countries of origin’. However, it’s obvious that this concern did not extend to applications from Turkish nationals; the idea of including Turkey on the list of ‘safe countries of origin’ emanates from the Commission.

Are these countries actually ‘safe’? That’s the million-dollar question. The Commission answers it in part by generally assessing the existence of human rights protections in the national legal order. It also quotes statistics about the success rate of asylum applications, and the number of times that the country concerned has been condemned by the European Court of Human Rights in 2014 for breaches of human rights. For comparison’s sake, here are those statistics in one place:

Albania: 4/150 ECHR applications; 7.8% asylum success rate, or 1040 successful applications

Bosnia: 5/1196 ECHR applications; 4.6% asylum success rate, or 330 successful applications

FYROM (Macedonia): 6/502 ECHR applications; 0.9% asylum success rate, or 70 successful applications

Kosovo: not party to ECHR; 6.3% asylum success rate, or 830 successful applications

Montenegro: 1/447 ECHR applications; 3.0% asylum success rate, or 40 successful applications

Serbia: 16/11490 ECHR applications; 1.8% asylum success rate, or 400 successful applications

Turkey: 94/2899 ECHR applications; 23.1% asylum success rate, or 310 successful applications

It’s obvious at first sight that one of these States is not like the others. Turkey has over five times the number of ECHR breaches as the next-highest State (Serbia). This can arguably be accounted for by Turkey’s bigger size – although in fact there are more ECHR applications against Serbia, so the gap in the rate of breaching the ECHR is even bigger in percentage terms.  More significantly (because not every breach of the ECHR is an indication of persecution), the rate of successful asylum claims from Turkish nationals is three times the rate of the next-highest State (Albania). Moreover, the number of asylum claims from Turkey (just over 1000 in the whole year) does not indicate a systemic problem.

It follows that Turkey manifestly does not belong on the common list of countries which all Member States can consider ‘safe’. In fact, it probably doesn’t belong on any Member State’s national list either. Indeed, Turkey isn’t on any national list, according to the recent report on EU asylum policy from AIDA, a database on asylum policy (see page 78). Leaving Turkey off the list does not mean that its application for EU membership should be shelved: the EU should make clear that this process is a long one during which would-be Member States can improve their human rights records.

As for the other countries on the proposed list, the Western Balkans States indeed have an overall low rate of successful applications, as well as a high number of applications (Turkey has neither). According to the EASO report, only 4% of applications out of nearly 100,000 were successful in 2014. In the context of very high pressure on many Member States’ asylum systems as a whole, it’s easy to see why the idea of a common list makes sense in terms of efficiency.

But there is a need to balance efficiency with humanity: the statistics show that there are still thousands of applicants from these States who demonstrated a genuine need for protection. The Commission’s explanatory memorandum notes that in all the States concerned, there was persecution on LGBTI grounds, as well as persecution in some States against Roma, women or children (among others). So the best way forward is to strengthen the individual safeguards to ensure that those with genuine needs for protection don’t have their application simply ignored. I have suggested some amendments to this effect in the Annex.

Furthermore, the proposal could go further in ensuring harmonisation, in two ways. First of all, in light of the length of procedures referred to in the EASO report, it could introduce deadlines to decide on applications and appeals from the nationals of the countries concerned, subject to two procedural safeguards: setting out a minimum time to appeal as well as a maximum time, and exempting those who have submitted some evidence to rebut the presumption from any fast-track process.

Secondly, as we say in English, what’s sauce for the goose is sauce for the gander. Greater harmonisation in the interest of the efficiency of asylum systems should be balanced with greater harmonisation to ensure that Member States do not breach the EU’s minimum standards, and to ensure that the standards themselves do not breach human rights law. I have therefore suggested amendments in the Annex to that effect, so that the Commission can overrule Member States which have applied the concept of ‘safe third country’ or ‘safe country of origin’ to cases where it is clearly not justified. (It would still be possible for national courts to overturn such decisions too). Such decisions are also likely to divert asylum applicants toward Member States other than the one which would be responsible for their application, distort recognition rates of asylum-seekers, and risk harm for the persons concerned. In particular, the AIDA report raises questions about whether Serbia could be considered a ‘safe third country’, and concludes that ‘international asylum standards are not currently met in FYROM’.

Annex

Proposed amendments to the asylum procedures Directive

Amend Article 25(6)(a)(i):

“the applicant comes from a country which satisfies the criteria to be considered a safe country of origin within the meaning of this Directive, except where Article 36(3) applies”

This exempts genuine claims by unaccompanied minors from the countries concerned from being fast-tracked (new text underlined).

Amend Article 25(6)(a)(ii):

“the applicant comes from a country which satisfies the criteria to be considered a safe country of origin within the meaning of this Directive, except where Article 36(3) applies”

This exempts genuine claims by unaccompanied minors from the countries concerned from being rejected in a special border procedure (new text underlined).

Amend Article 31(8)(b):

“the applicant is from a safe country of origin within the meaning of this Directive, except where Article 36(3) applies”

This exempts genuine claims from the countries concerned from being fast-tracked in general (new text underlined).

Add a new Article 31(10):

“In the case of an application made by a national of a country listed in the Annex to Regulation xxx/2015, they shall decide on the application within three months of the decision to apply the ‘safe country of origin’ concept, unless the applicant has submitted evidence that he or she is part of a group that faces persecution or serious harm pursuant to Article 36(3)”.

This fast-tracks a decision, except for ‘safeguard’ cases.

Add a new Article 36(3):

“Member States shall not make a decision to apply the ‘safe country of origin’ concept to an application until they have considered all evidence submitted by the applicant, including any evidence that the applicant is part of a group that faces persecution or serious harm according to the sources of information referred to in Article 37(3).”

Article 39 should be repealed

The idea of a ‘super-safe third country’ from which applications are not considered at all is incompatible with human rights law.

New Article 39:

“If a Member State has listed a third country as a ‘safe country of origin’ pursuant to Article 37 and Annex I, or a ‘safe third country’ pursuant to Article 38, but an organisation concerned with the protection of human rights submits evidence to the Commission that the designation is not compliant with the relevant criteria, the Commission shall examine the issue. It may also examine such an issue on its own initiative.

The Commission shall inform the relevant Member State, and ask it for its observations. Within one month of the start of the assessment, the Commission shall decide on the compatibility of the Member State’s decision with the criteria in this Directive. If the Commission’s view is negative, the Member State shall withdraw the relevant measure.”

This sets out controls of Member State abuse of the ‘safe’ country concepts. 

Add a new sub-paragraph to Article 46(4):

“In the case of an application made by a national of a country listed in the Annex to Regulation xxx/2015, Member States shall set a time limit of between one week and one month to lodge an appeal. Member States shall decide on the appeal within three months, unless the applicant has submitted evidence that he or she is part of a group that faces persecution or serious harm pursuant to Article 36(3)”.

This fast-tracks an appeal, except for ‘safeguard’ cases.

Add the following words to the end of Article 46(6)(a):

“…or Article 36(3)”.

This ensures a right to stay during an appeal for ‘safeguard’ cases.

Barnard & Peers: chapter 26

Photo credit: internationalliving.com