Freedom of Establishment (General)

DEFINITION: the 'actual pursuit of an economic activity through a fixed establishment in another MS for an indefinite period' - Factortame II[1991]
Art 49: Individual - the right to take up and pursue activities as self-employed persons and to set up and manage undertakings
Art 54: Companies - the right to be treated in the same way as natural persons who are nationals of Member States.
Distinction between Establishment & Services
1. Establishment is carried out for an indefinite period, that is on a 'stable and continuous basis' [Gebhard 1995)
2. Services, however are carried out on a temporary basis in regards to its ‘regularity, periodicity or continuity’
Distinction between Art.49 Self-Employed & Art.45 Workers
1. Jany [2001] Defined self-employment as operating outside any relationship of subordination (a.k.a no boss/ superior), under their own responsibility receiving remuneration directly and in full
TYPES of Establishment
1. Primary Est. - The right to exercise a self-employed activity through a principal establishment in another Member State.
2. Secondary Est. - The right to maintain additional offices or places of activity within the EU. i.e 'agencies, branches, subsidiaries' - Gebhard 1995
Direct Effect
1. Vertical: Established in the Reyners case 1974
2. Horizontal: Wouter 2002 applies where 'the case of rules which are not public in nature but which are designed to regulate, collectively, self-employment'
RIGHTS under FoE
1. Entry of Residence: Commission v Ireland [1997] - Every national of a MS has the freedom to pursue employed/self-employed activity and reside in that given MS
2. Departure/ Exit: Right to leave one MS to another without the burden of visa formalities. X and Y [1999]
3. Tax Advantages: Asscher [1996] The implementation of higher tax rates for non-residents was a breach of Art.49. 'Member States must exercise competence consistently with Union law to avoid any overt or covert discrimination by reason of nationality'
4. Other Miscellaneous Rights: Self-employed persons can enter into contracts, submit tenders for work, obtain licences/authorisations issued by the State and acquire, use or dispose property - Steinhauser [1985]
RESTRICTIONS on FoE
1. DIRECT DISCRIMINATION: Commission v Austria (Certification) [2008] - The requirement for a State to obtain a certificate with the Austrian labour market before they could register partnership or company was considered to be direct discrimination prohibited by Art.49
2. INDIRECT DISCRIMINATION: Is also prohibited. "[T]he rules regarding equality of treatment forbid overt discrimination by reason of nationality and covert forms of discrimination which, lead in fact to the same result.” - Halliburton [1994]
  1. DUAL BURDEN: Vlassopoulou [1991] Requiring a national who has already met the standards required for access to a profession in one MS to meet the national qualification requirements forms a dual burden. Not allowable unless justified.
3. NON - DISCRIMINATORY MEASURES: Gebhard 1995 - A German national who was a qualified German lawyer. Established a set of chambers in Milan and used the title 'avvocato' without proper registration. Then was suspended by the Milan Bar Council. It was held that whilst Italy could set restrictions on access to profession. Those restrictions were “liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty”. For it to be JUSTIFIABLE, must be by way of express derogation or public interest.
4. NON-DISCRIMINATORY MEASURES II: Kraus [1993] - A German national obtained a UK postgraduate academic title that was not authorised by German law. It was held that "Article 49 precludes any national measure... applicable without discrimination on grounds of nationality, is liable to hinder or to render less attractive the exercise by Union standards."
Cross Border Element
1. The provisions on freedom of establishment, do not apply to wholly internal situations Kraus [1993]
2. Claimants must show some type of cross-border element, needn't be a physical move from one MS to another. Can cover, acquiring a qualification in another MS.
MARKET ACCESS LIMITS/ Remoteness test: Commission v Italy (“Lawyers’ Fees”) [2011] - The measure will be deemed restrictive if it deprives individuals or companies "of the opportunity of gaining access to the market of the host Member State under conditions of normal and effective competition.” So no obstacle to market access no restriction imposed.
DEROGATIONS & JUSTIFICATIONS
1. EXPRESS DEROGATION: Can be applied to both distinctly and indistinctly applicable measures. Art 51 TFEU - Exercise of official authority & Art. 52 TFEU - Public policy, public security or public health
2. PUBLIC INTEREST JUS.
  1. PUBLIC INTEREST REQ.: As per Haim II [2000] - A language requirement can constitute a valid justification. "Dialogue with patients, c compliance with rules of professional conduct and law specific to dentistry in the Member State of establishment and performance of administrative tasks require an appropriate knowledge of the language of that State.”
  2. Gullung [1988] - Registration requirement is allowable so long as it was non-discriminatory... “to ensure the observance of moral and ethical principles and the disciplinary control of the activity of lawyers and thus pursues an objective worthy of protection.”
  3. Gebhard [1995] - Restrictive measures can be justified if "applied in a non-discriminatory manner; justified by overriding reasons based on the general interest; suitable for securing the attainment of the objective which they pursue; and they mustn't go beyond what is necessary in order to attain that objective.”
  4. To maintain standards of the professions indistinctly applicable measures that are restrictive are often justifiable. Vlassopoulou [1991] - Art. 49 does not prevent MS from conducting checks to ensure that that foreign nationals hold the knowledge and qualifications required by national provisions for that profession (qualifications).

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