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Direct Effect Notes

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Founding Treaties and International Agreements Van Gend En Loos v Niederlandse Belastingenadministratie (ECJ 1963) Facts

• The plaintiff was an importer of chemicals from Germany.

• There was a reclassification of a certain chemical resulting an increase in the tariff charged on its importation in contravention of the EEC Treaty. Issue

• Direct Effect - Treaties Judgment

To decide whether Community Law is of direct application it is necessary to consider the spirit, general scheme and wording of the relevant law.

• The common market, which is the object of the treaties, requires direct effect of the relevant law to function.

• Institutions effect citizens.

• The preamble refers to people as well as Governments.

• The object of the ECJ as founded in the Treaty is to ensure the proper administration of EC law in national courts

• This envisages that individuals will rely on Community rights in the Courts. Thus the Community consitutes a new legal order, for the benefit of which the Member States have limited their sovereign rights. The provision in question is ideally suited to take direct effect.

• It is clear, unconditional and imposes a negative obligation on member states. Reyners v Belgium (ECJ 1974)

Facts

• The applicant was a Dutch national who held the qualification necessary to practise law in Belgium

• He was pecluded from doing this by virtue of his nationality.

• He claimed this was in contravention of Article 52 and Article 7 of the EEC Treaty which prohibited discrimination on the basis of nationality in establishing oneself as a self-employed person. Issue

• Direct Effect - Treaties Submissions and Judgment

• This provision seeks to:

• eliminate the obstacles to free establishment within the transitional period

• aid social and economic integration of those seeking to establish themselves within another member state

• In stating that freedom of establishment is to be attained at the end of the transitional period, this becomes a precisely described obligation at the end of that period, at which time the allowance for complementary provisions becomes superfluous.

• Thus the provision has direct effect. Defrenne v Sabena (ECJ 1975) Facts

The applicants were being paid less than their male colleagues for the same work. Article 119 of the Treaty provides that the principle of equal pay for equal work shall be upheld.

Issue

• Direct Effect - Treaties Submissions and Judgment

• The aims of the Article are twofold

• to prevent states which have implemented equal pay for equal work from suffering a competitive disadvantage

• to seek social progress and an improvement in working in living conditions for all citizens of the union

• There is a distinction between direct and overt discrimination which is clearly in contravention of the principle of equal pay for equal work and indirect and covert discrimination in which a wider range of criteria must be adjudicated upon.

• In the case of indirect discrimination, the principle must be fleshed out by legislation.

• Situations where the case may be decided on the Treaty provisions alone include discriminations based on legal provisions, collective pay agreements and unequal pay for equal work in the same establishment or service.

• In such situations the provision has direct effect.

• There is nothing in the provision itself to cast doubt on this decision.

• The word principle only indicates that the treaty provision is fundamental.

• The statement that it applies to member states does not prevent individuals from relying on it.

• The Article imposes a duty on states to be achieved within a certain time limit. International Fruit Company (ECJ 1972) Facts

• The applicants were affected by a provision of community law which conflicted with their obligations under GATT. Issue

• Direct Effect - International Agreements Submissions & Judgment

• For a provision of community law to be invalid with reference to international law, the community must be bound by the law in question.

• The community was bound - the member states were bound to each other under treaties to observe international agreements ratified by the community,

• For a provision of international law to be relied upon by citizens of a member state before their national courts, the provision must be capable of conferring rights on individuals.

• In ascertaining this the court must have regard to the spirit, general scheme and terms of the agreement.

• The GATT is subject to a great deal of flexibility and allows derogation from its terms and does not have the power to compel parties to action in the case of difficulties or conflicts between signatories.

• Thus the agreement does not confer rights that can be relied on before the national courts and does not have direct effect. Germany v Council (ECJ 1993)

Facts

• The community introduced a regulation to harmonise trade of bananas.

• The applicant claimed that the regulation was in contravention of the GATT. Issue

• Direct Effect - International Agreements Submissions and Judgment

• To decide whether the GATT is relevant to the lawfulness of Community provisions it is necessary to consider the spirit, general scheme and terms of the agreement.

• On examination, these reveal that the GATT allows great flexibility to signatories, especially as it allows derogation from its obligations and has no ability to make binding decisions in the case of conflicts between parties.

• Thus any binding rules which emanate from the GATT cannot have their basis in the spirit, general scheme and words of the Treaty

• Therefore any provision of the agreement shall only have direct effect where measures have been passed specifically to implement GATT obligations or where specific provisions of the GATT are referred to in Community legislation. Portugal v Council (ECJ 1996) Facts

• The applicants challenged certain provisions of EU law as being in contravention of Memoranda of Understanding following a dispute mediated by the WTO. Issue

• Direct Effect - International Agreements Submissions & Judgment

• In negotiating agreements in public international law, parties may agree what effect the agreements shall have in their domestic law, and it is only where this has not been agreed that courts will decide what the effect is

• In circumstances where, following the determination of disputed obligations, a signatory cannot implement the recommendations within a reasonable time then any affected parties will enter into negotiations with that signatory.

• To find community law invalid as a result of inconsistency with WTO provisions would rob the legislature and executive of their right to enter this dispute settlement procedure, contrary to the provisions of the WTO itself.

• Thus EU law can not be invalid as a result of such inconsistency.

• The memoranda of understanding as a measure is not designed to implement obligations under the GATT nor does it reference specific provisions of the same. Van Parys (ECJ 2002) Facts

• The applicant challenged certain provisions of EU Law as they conflicted with WTO rules as ascertained through its dispute settlement body. Issue

• Direct Effect - International Agreements Judgment

• It is only where the Community has implemented a particular obligation in the context of the WTO or a provision refers precisely to a provision in its agreements

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