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Does the EFTA Court Interpret the EEA Agreement as if it were the EC Treaty? Some Questions Raised by the Restamark Judgment

Published online by Cambridge University Press:  17 January 2008

Vincent Kronenberger
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Extract

The European Economic Area (EEA) Agreement signed in May 1992 between the European Free Trade Area (EFTA) States, the European Community (EC) and the EC member States' seeks to establish “a dynamic and homogeneous” area by extending provisions which apply within the European Community to the EEA.2 The first decision of the EFTA Court,3 interpreting the EEA Agreement to determine its application within the legal orders of the EFTA States, concerned the Finnish alcohol monopoly. The Restamark decision was awaited with great interest to know to what extent the EFTA Court would follow the European Court of Justice's interpretation of the EC Treaty in order to achieve the aims of the EEA Agreement.

Type
Shorter Articles, Comments and Notes
Information
International & Comparative Law Quarterly , Volume 45 , Issue 1 , January 1996 , pp. 198 - 212
Copyright
Copyright © British Institute of International and Comparative Law 1996

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References

1. The European Economic Area Agreement has been in force since 1 Jan. 1994 ((1994) O.J. L1, 3 Jan.) Following the accession of Liechtenstein on 1 May 1995, there are 19 contracting parties.

2. Fourth recital, Preamble to the EEA Agreement.

3. Case E-1/94 Rovintoloitsijain Liilon Kustanntis Oy Resiamark v. Helsingin Piiriiullikamari 16 Dec. 1994) [1995] 1 C.M.L.R. 161. Even though three of the EFTA States have become members of the EU. the EFTA Court, according to an arrangement signed in Sept. 1994, still held jurisdiction for a transitional period of six months over pending cases entered before accession. The EFTA Court has dealt with three other cases: in Apr. 1994 the Scottish Salmon Growers Asscn. appealed against the EEA Surveillance Authority's refusal to take action against alleged Norwegian State aid to the Norwegian salmon industry—on 21 Mar. 1995 the Court confirmed the competence of the Surveillance Authority; in June 1995 the Court delivered two advisory opinions, the first on TV advertising in Norway and interpretation of EC Directive 89/552 (“Television without frontiers”) in Joined cases E-8/94 and E-9/94 Forbrukerombudei v. Mattel Scandinavia A/S and Lego Norge A/S, 16 June 1995 (not yet rep.); the second concerned interpretation in Sweden of EC Directives 80/987 and 87/164 relating to the protection of employees in the event of their employer's insolvency: Case E-1/95 Ulf Samuelsson and Svenska Staten. 20 June 1995 (not yet rep.).

4. Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice (1994) O.J. L344, 31 Dec. The relevant part of Art.34 of the ESA/EFTA Court Agreement states that “the EFTA Court shall have jurisdiction to give advisory opinions on the interpretation of the EEA Agreement. Where such a question is raised before any court or tribunal in an EEA State, that court or tribunal may, if it considers it necessary to enable it to give judgment, request the EFTA Court to give such an opinion.” Moreover, Art.96(3) of the EFTA Rules of Procedure ((1994) O.J. L278, 27 Oct.) provides that “the request for an advisory opinion shall be accompanied by a summary of the case before the national court including a description of the facts of the case as well as a representation of the provision in issue in relation to the national legal order, necessary to enable the Court to assess the question to which a reply is sought”.

5. Art.11 EEA provides that “quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between the Contracting Parties”. Art.16 states: “1. The Contracting Parties shall ensure that any State monopoly of a commercial character be adjusted so that no discrimination regarding the conditions under which goods are procured and marketed will exist between nationals of the European Community Member States and the EFT A States. 2. The provisions of this Article shall apply to any body through which the competent authorities of the Contracting Parties, in law or in fact, either directly or indirectly supervise, determine or appreciably influence imports or exports between the Contracting Parties. These provisions shall likewise apply to monopolies delegated by the State to others.”

6. These provisions were: s.2(1) of the 1968 Alcohol Act, which provides that “Production, import, export and sale of alcoholic beverages and industrial alcohol shall be, with the exceptions prescribed hereafter in this Act, the monopoly of the limited company called the alcohol company”, s.27(1), which lists some exceptions to that rule, s.27(4), which regulates the surrender by Customs of consignments of alcoholic beverages from abroad, and s.14(a) of the Decree on alcoholic beverages (636/81), which defines a gift or other consignment referred to in the Alcohol Act. See Alcohol Act 68/459,26 July 1968.

7. The Finnish Alcohol company, Oy Alko Ab, is a wholly Stated-owned company created by the Liquor Act of 1932,32/45,9 Feb. 1932.

8. Restamark, supra n.3, at para.4 of the judgment.

9. Idem, para.5.

10. Case 59/75 Pubblico Ministero v. Flavin Manghera [1976] E.C.R. 91.

11. Ibid.

12. Restamark, supra n.3. at para.32 of the decision. This recital was introduced by the contracting parties during renegotiations following the negative opinion of the ECJ in its Opinion 1/91 The draft Treaty on a European Economic Area [1991] E.C.R. I-6079.

13. Restamark, Idem, paras.33–34,46,56 and 64. Art.6 EEA provides that “Without prejudice to future developments of case law, the provisions of this Agreement, in so far as they are identical in substance to corresponding rules of the Treaty” establishing the EC and the ECSC Treaty “and to acts adopted in their implementation and application, be interpreted in conformity with the relevant rulings of the Court of Justice of the EC given prior to the dale of signature of this Agreement”. The relevant part of Art.3(2) of the ESA/EFTA Court Agreement is as follows: “in the interpretation and application of the EEA Agreement and this Agreement, the EFTA Surveillance Authority and the EFTA Court shall pay due account to the principles laid down by the relevant rulings by the Court of Justice of the EC given after the date of signature of the EEA Agreement and which concern the interpretation of that Agreement or of such rules of the Treaty establishing the EEC and the Treaty establishing the ECSC in so far as they are identical in substance to the provisions of the EEA Agreement” (my emphasis).

14. Written observations, points 27 to 41.

15. Apart from bodies designated as courts or tribunals by the States themselves, the ECJ has ruled that an order for a preliminary ruling could be admissible: from bodies which do not consider themselves as courts, Case 61/65 Vaassen-Göbbels v. Beambtenfonds voor her Mijnbedrijf [1966] E.C.R. 377; from professional committees to which the State has granted rights to implement EC requirements in a specific area, Case 246/80 Broekmoelen v. Huisarls Registratie Commissie [1981] E.C.R. 2311; in non-contentious proceedings, e.g. Case 162/73 Birra-Dreher v. Amministrazione delle Finanze dello Stato [1974] E.C.R. 201 and Case 199/82 Amministrazione delle Finanze dello Stato v. SpA San Giorgio [1983] E.C.R. 3595; during interlocutory proceedings. Case 107/76 Hoffman-La Roche v. Centrafarm Vertriebsgesellschaft pharmazeutischer Erzeugnisse mbH [1977] E.C.R. 957; but not from an arbitrator since his competence is not compulsory. Case 102/81 Nordsee Deutsche Hochseefischerei GmbH v. Keederei AC and Co. KG [1982] E.C.R. 1095; and not from bodies which have organisational links with the contested administrative services. Case C-24/92 Corbiau v. Administration des contributions [1993] E.C.R. I-1277.

16. The Finnish government observed that there were organisational links between the Helsinki District Customs House and the National Board of Customs, of which the Appeals Committee is part. The Finnish authorities were of the opinion that the National Board of Customs was both the supervising authority and the appellate authority in the same case. See written observations at points 31,33,34 and 35.

17. Case C-24/92. supra n. 15.

18. Restamark, supra n.3, at para.24.

19. Art.3(1) ESA/EFTA Court Agreement, modelled on Art.6 EEA, states that “provisions of Protocols 1 to 4 and the provisions of the acts corresponding to those listed in Annexes I and II to this Agreement, in so far as they are identical in substance to” EC and ECSC legislation “shall in their implementation and application be interpreted in conformity with the relevant rulings of the Court of Justice of the EC given prior to the date of signature of the EEA Agreement”.

20. Restamark, supra n.3, at para.24.

21. Case 61/65, supra n.15.

22. Resiamark, supra n.3, at para.24 and Case C-393/92 Municipality of Almelo and others v. Energiebedrijf Ijsselmij NV [1994] E.C.R. I-1477, para.21.

23. Resiamark, Idem, para.29.

24. Ibid.

25. Case C-24/92, supra n.15, at para.16.

26. Resiamark, supra n.3, at para.30.

27. Idem, para.27 (my emphasis).

28. Supra n.22.

29. See e.g. Case 70/77 Amministrazione delle Finanze dell Stato v. Simmenthal SA [1978] E.C.R. 1453: Case 199/82, supra n.15 and Case C-18/93 Corsica Ferries Italia SRL v. Corpo dei Piloti del Pono di Genova [1994] E.C.R. I-1783. para. 12.

30. Restamork, supra n.3. at para. 31 and also paras.25 and 78. Also confirmed in Case E-1/95, supra n.3. at para. 13 “for providing the national courts with the necessary elements of EEA law”. This wording is modelled on that used by the ECJ: see Case 16/65 Firma C. Schwarze v. Einfuhr und Vorratsselle für Geireide und Futtermittel [1965] E.C.R. 877.886. As a consequence, the EFTA Court (at para.78) denied itself the right to interpret national law.

31. For such an opinion in the EC context see Smit, H. and Herzog, P. E.. “Article 177”. in The Law of the EEC, a Commentary on the EEC Treaty (1993) Vol.5, p.463.Google Scholar

32. However, the EFTA Court is not competent to deal with requests on validity, unlike the ECJ under Art. 177 EC.

33. See Case 70/77. supra n.29.

34. Restamark. supra n.3. at para.8. It can be asked what would have occurred had there not been such a consensus on the reference to Art. 177 EC. Would the EFTA Court have been less confident in deciding on the admissibility of the request?

35. See also Art.108 EEA. Consequently, advisory opinions of the EFTA Court do not bind courts of the EFTA States. For the tribunal requesting the opinion of the EFTA Court, it seems obvious however that the advisory opinion has a highly persuasive authority since one does not understand why such a tribunal, which has no obligation to question the EFTA Court, would have made such an order if it were not to follow the EFTA Court's decision. See. on the binding effect of interpretative preliminary rulings under Art.177 EC. Joined cases 28–30/62 Da Costa en Schaake NV v. Nederlandse Belastingadministralie [1963] E.C.R. 61. The non-binding effect of similar answers was feared by the ECJ, for the creation of a single EEA Court, in its Opinion 1/91, supra n.12.

36. Supra n.10.

37. Art.8 and Protocol 3 EEA.

38. Restamark. supra n.3, at para.47. Case 8/74 Procureur du Roi v. Dassonville [1974] E.C.R. 837: “article 30 EC applies to all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially intra-community trade”.

39. Case C-202/88 France v. Commission [1991] E.C.R. I-1223 and Joined cases 51–54/71 International Fruit Company NV v. Produktschap voor Groenten en Fruit (No.2) [1971] E.C.R. 1107, where the ECJ held that granting a licence to import, even though a pure formality, amounts to a measure of equivalent effect to a quantitative restriction.

40. Restamark, supra n.3, at para.48.

41. Idem, paras.50 and 61.

42. Idem, para.51. The EFTA Court rightly excluded application of the so-called Cassis de Dijon “mandatory requirements”, especially “the protection of public health”, since these mandatory requirements apply only to non-discriminatory national measures in order to judge whether they amount to measures having equivalent effect to a quantitative restriction or not. However, the legal reasoning on which the EFTA Court relied is questionable since “mandatory requirements” are not derogations from Art.30 but are the criteria used to qualify a national measure within the ambit of Art.30 EC. Nevertheless, measures which concern only imports are of a discriminatory nature. Case 120/78 Rewe-Zentral AG v. Bundesmonopolverwaliung für Branniwein (“Cassis de Dijon”) [1979] E.C.R. 649 and Case 113/80 Commission v. Ireland (Re Restrictions on Importation of Souvenirs) [1981] E.C.R. 1625.

43. See on this subject, P. Bjurman, “Nordic Alcohol Policies with a View to EC Membership” (1993) 17 World Competition 137. However, since 1 Jan. 1995 Finland and Sweden have introduced new legislation which maintains only a retail sale monopoly.

44. Restamark, supra n.3, at para.53. The aim of the resolution is to reduce drastically alcohol consumption in Europe before the turn of the century. For further details see Surell, V., “European Alcohol Action Plan”, in Kolstad, H. (Ed.), Nordic Alcohol Control Policy (1993), pp. 116–120.Google Scholar

45. Declaration annexed to the EEA Agreement stating: “Without prejudice to the obligations arising under the Agreement. Finland. Iceland, Norway and Sweden recall that their alcohol monopolies are based on important health and social policy considerations.”

46. Case 72/83 Campus Oil Ltd and others v. Minister for Industry and Energy [1984] E.C.R. 2727.

47. Idem, para.34.

48. Restamark, supra n.3, at para.57 of the opinion.

49. Idem, paras.59–61. The EFTA Court noted that in such a case the State holds the burden of proof. It recalled Case 251/78 Firma Denkavit Futtermittel GmbH v. Minister für Ernährung [1979] E.C.R. 3369, para.24. Is this issue merely a question of a burden of proof, however?—it seems that restrictions laid down by a monopoly holding an exclusive right to import have never been upheld under Art.36 EC. Campus Oil, supra n.46, is rather specific and open to criticism since the Irish State put forward economic purposes which are normally irrelevant within the ambit of Art.36 EC.

50. Another question, outside the scope of this article, is whether the EFTA Court will follow the new case law of the ECJ which distinguishes, within non-discriminatory national measures, between national prohibitions of “certain selling arrangements”, and national legislation providing for conditions which have to be fulfilled by products. See Joined cases C-267/91 and C-268/91 Criminal proceedings v. Keck and Mithouard [1993] E.C.R. I-6097. Such case law was referred to by certain parties in their written observations before the EFTA Court in the Joined cases E-8/94 and E-9/94, supra n.3; however, the Court replied only to the first question raised by the Norwegian Market Court.

51. Case 6/64 Costa v. ENEL [1964] E.C.R. 585.

52. Opinion 1/91, supra n.12, at para.28. See also for a free trade agreement concluded by the EC Case 270/80 Polydor v. Harlequin Records [1982] E.C.R. 329, 348.

53. Protocol 35 provides: “Whereas this Agreement aims at achieving a homogeneous EEA, based on common rules, without requiring any Contracting Party to transfer legislative powers to any institution of the EEA; and Whereas this consequently will have to be achieved through national procedures; Sole Article: For cases of possible conflicts between implemented EEA rules and other statutory provisions, the EFTA States undertake to introduce, if necessary, a statutory provision to the effect that EEA rules prevail in these cases.”

54. Opinion 1/91, supra n.12. at para.26. See also Vesterdorf's, B. intervention on Art.6 EEA and its implication for the national legal systems of the EFTA States, Fifth Nordic Conference on the EFTA and the European Union, 3–5 September 1993, Helsinki (1994), p.114.Google Scholar

55. Permanent Court of Justice's Advisory Opinion Jurisdiction of the Courts of Danzig (1928)Ser.B.No.15.

56. Case 26/62 NV Algemene Transport-en Expeditie Ondeeneming Van Genden Loos v. Nederlandse Administratie der Belastingen [1963] E.C.R. 1.

57. Isaac, G., Droit communautaire général (4th edn, 1994). p.166.Google Scholar

58. Written observations, points 89–93.

59. Opinion 1/91, supra n.12, at para.20.

60. R. C. Gladstone, “The EEA Umbrella: Incorporating Aspects of the EC Legal Order” (1994) 1 Leg. Iss. Europ. Integration 39, 43.

61. Idem, p.62.

62. Supra n.10.

63. Restamark, supra n.3, at para.65. Art.37 EC prescribed a transitional period to 31 Dec. 1969. The only monopolies which can enjoy a transitional period under the EEA Agreement are listed in Protocol 8(1): the Austrian monopoly on salt, the Icelandic on fertilisers and the Liechtenstein ones on salt and gunpowder.

64. Idem, paras.72–74.

65. The Finnish government also relied on that fact: Idem, para.67 of the decision.

66. Idem, para.71. It is worth noting thai under s.11 (6) of the 1968 Alcohol Act the Board of Administration of Oy Alko Ab had the “duty to determine the sale prices of alcoholic beverages”. Combined with a monopoly of production this provision was certainly contrary to the case law of the ECJ, especially Case 90/82 Commission v. France [1983] E.C.R. 2011, concerning tobacco price fixing.

67. Case C-347/88 Commission v. Greece [1988] E.C.R. I-4747.

68. Both the EC Commission and Advocate General Roemer in Case 82/71 Pubblico Ministero v. SAIL [1972] E.C.R. 119 supported the view that Art.36 EC would be a good basis for derogation from Art.37 EC whereas many authors argue for a narrow construction of Art.36 derogating only from Arts.30 and 34 EC. See Cockborne, J. E.. “Les monopoles nationaux à caractère commercial”, in J. Mégret. Le droit de la CEE (1992). Vol.1, p.307, at pp.338–339Google Scholar: Even though the ECJ specified that “it is clear not only from the wording of article 37 but also from its position in the general scheme of the Treaty that the article is designed to ensure compliance with the fundamental rule of free movement of goods throughout the common market”—Case 78/82 Commission v. Italy [1983] E.C.R. 1955—it never upheld arguments put forward for possible derogation from Art.37 thanks to Art.36 EC. If the ECJ agreed to look at derogation in Case C-347/88. ibid, it did it because it analysed Art.37 EC in conjunction with Art.30; see Kovar, R., “Monopoles”, Encyclopédic Dalloz, Droit Communautaire (1994), p.5.Google Scholar

69. Case C-202/88, supra n.39, at para.34.

70. 12th recital. Preamble to the EEA Agreement.

71. Reslamark, supra n.3, at para.32.

72. Act 1504/93. See on this point P. Timonen, “The Effects of the EEA Agreement in Finland” (1994) E.B.L.Rev. 251.

73. Written observations, point 85. The Norwegian government shared the same opinion on the basis that s.2 of the Finnish Act implementing the EEA Agreement gave priority to the main part of the EEA Agreement over national legislation; see Idem, point 87.

74. Reslamark, supra n.3, at para.78. For the ECJ see Case 75/63 Hökstra (Unger) v. Bestuur der Bedrijfsvereniging voor Detailhandel en Ambachten [1964] E.C.R. 177.

75. Reslamark. Idem, paras. 80–81.

76. Seván, L., in Fifth Nordic Conference, supra n.54, at p.127.Google Scholar

77. See M. Cremona, “The [Dynamic and Homogeneous] EEA: Byzantine Structures and Variable Geometry” (1994) E.L.Rev. 508, 521.

78. For Art.16 EEA, see Restamark, supra n.3, at para.80.

79. Opinion 1/91, supra, n.12, at para.28.

80. Restamark, supra n.3, at para.77 (my emphasis).

81. There is no doubt that Art. 11 EEA fulfils the criteria for direct effect since the EFTA Court adopted the ECJ's interpretation of Art.30. which is directly effective in the EC legal order: see Case 74/76 lannelli and Volpi SpA v. Ditto Paolo Meroni [1977] E.C.R. 557.

82. Direct effect of directives was established for the first time by the ECJ in Case 9/70 Franz Grad v. Finamami Traunstein [1970] E.C.R. 825. In Case 8/81 Becker v. Finamamt Münster-Innenstadi [1982] E.C.R. 53 it ruled that if member States are placed under a duty to adopt a certain cause of action by means of a directive, “the effectiveness of such a measure would be diminished if persons were prevented from relying upon it in proceedings before a court and if national courts were prevented from taking it into consideration as an element of Community law” (my emphasis).

83. See within the EC Case 43/71 Politi S.A.S. v. Ministry for Finance of the Italian Republic [1971] E.C.R. 1039.

84. See Case 148/78 Pubblico Minisiero v. Tullio Ratti [1979] E.C.R. 1629, para.23 and Case 8/81. Supra n.82.

85. Joined cases E-8/94 and E-9/94, supra n.3.

86. Council Directive 89/552/EEC of 3 Oct. 1989(1989) O.J. L298,17 Oct. This Directive is part of the EEA legal order due to Annex X of the EEA Agreement.

87. See the EC Commission's opinion, written obs. in Joined cases E-8/94 and E-9/94, supra n.3. at para.36.

88. This duty, as the ECJ stated, concerns all authorities of member States including courts: see Case 14/83 Van Colson and Kamann v. Land Nordhein Wesifaten [1984] E.C.R. 1891, para.26.

89. Case 213/89 R. v. Secretary of State for Transport, ex p. Factortame and others [1990] E.C.R. I-2433, para.19.

90. Idem, paras.19–21. See for the same opinion albeit in a different context S. Peers, “An Ever Closer Waiting Room? The Case for Eastern European Accession to the European Economic Area” (1995) C.M.L.Rev. 187, 210.

91. Case C-106/89 Marleasing SA v. La Comercial International de Alimentatión SA [1990] E.C.R. I-4135. para.8.

92. T. Tridimas, “Horizontal Effect of Directives: a Missed Opportunity?” (1994) E.L.Rev.621, 624.

93. Cases C-6/90 and 9/90 Francovich, Bonifaci and others v. Italian Republic [1991] E.C.R. I-5357. These three conditions are: (a) that the objective sought by the directive requires the conferring of individual rights, (b) that the content of those rights can be determined by reference to the provisions of the directive, and (c) that there is a causal link between the breach of the obligation of the State and the damage suffered by the person affected.