The EEA and the EFTA Court

Decentred Integration

EFTA Court

• Publisher: Hart Publishing
• Year: 2014
• ISBN:
  9781782255253
• Edition: 1
• Topic: Law
• Subtopic: International Law
• Index: Law

The EEA Agreement extends the free movement of persons, goods, services and capital to the EEA/EFTA States: Iceland, Liechtenstein and Norway. It provides for equal conditions of competition and abolishes discrimination on grounds of nationality in all 31 EEA States. The successful operation of the EEA depends upon a two-pillar system of supervision involving the European Commission and
the EFTA Surveillance Authority. A two-pillar structure has also been established in respect of judicial control with the EFTA Court operating in parallel to the Court of Justice of the European Union. The EFTA Court, which celebrates its 20th anniversary in 2014, has jurisdiction with regard to EFTA States which are parties to the EEA Agreement. The jurisdiction of the EFTA Court accordingly corresponds to the jurisdiction of the Court of Justice of the European Union over EU Member States in matters of EEA law. The essays in this collection, assembled to celebrate the 20 year landmark, and written by members of the Court and external experts, review the successes and shortcomings of the Court, its interface with EU law, and the prospects for its future development.

Part I

The EFTA Court’s Role in the Judicial Architecture of the EEA

A

The Two EEA Courts

1

The Role of the Court of Justice of the European Union in the Development of the EEA Single Market

Advancement through Collaboration between the EFTA Court and the CJEU

VASSILIOS SKOURIS

I. INTRODUCTION

IN WRITING ON the occasion of the twentieth anniversary of the EFTA Court I risk repeating what I said 10 years ago concerning the role and extraordinary collaboration of our respective courts. But I will take that risk, since the basic thread of this chapter is the confirmation of an efficient and complementary approach to the role supranational jurisdictions can play towards European integration.

First it is important to frame the overall context. The Agreement on the European Economic Area (EEA), which was concluded in 1992 and entered into force in 1994, extends the internal market established within the European Union to the EFTA states of Iceland, Liechtenstein and Norway. Even if the arrangement appears to encompass two distinct single markets, in reality we are considering a unique market with two sets of slightly different integration mechanisms, the EU one applying more tightly amongst EU Member States.¹ The two-pillar approach which underpins the functioning of the EEA is an ingenious stratagem in the development of the EEA Single Market. Since EEA law draws from its EU counterpart, they are both largely identical in substance and thus corresponding institutions become a prominent lever for the advancement of European integration.

In particular, the relationship between the CJEU and the EFTA Court, coupled with a number of their common characteristics, underlines their role as central factors contributing to the successful development of the EEA Single Market. Even if the initial idea of a reinforced collaboration in the form of a Court of combined EC/EFTA participation was rejected by ECJ Opinion 1/91,² since the inception of the EFTA Court a constant judicial dialogue has been established with the CJEU, particularly in the fields of free movement of goods, labour law, monopolies, IP law, insurance law, state aid, food law³ and free movement of capital.⁴ This dialogue is more than a simple academic conversation practised on the occasion of conferences and the celebration of anniversaries; it proves to be a fruitful exchange of information, ideas and a cross-dependency of sources. It comprises a broad spectrum of communication, ranging from explicit and implicit references to the direct use of the Opinions of the Advocates General of the CJEU.

The last two decades, marked by the existence of the EFTA Court, have signified the successful evolvement of the EEA Single Market. A careful analysis indicates that the aforementioned judicial dialogue has strengthened the efforts for the uniform application of the common rules in all EEA States—both EFTA and EU. I would take a particular pride in suggesting that the role of the CJEU has been and is bound to continue to be that of a communicative and supporting collaborator.

II. CJEU AND EFTA COURT COMMONALITIES

There are a number of obvious specificities and commonalities between the EFTA Court and the CJEU which contribute to the successful cooperation between the two institutions. Such cooperation takes place mainly on a direct twofold unilateral level, comforted by the fact that both institutions have similar areas of competence within their respective legal orders. Quite symbolically the seat of both courts is in Luxembourg. Their rules of procedure stem also from a common matrix. However, the collaboration success goes beyond these points. There have been consistent efforts to maintain a high level of mutual understanding thus allowing homogeneity, coherence and the advancement of case law. And the result of this collaboration was gradually decanted via preliminary rulings and the collaboration of national courts towards the national legal orders.

III. THE HOMOGENEITY OBJECTIVE⁵

The purpose of judicial homogeneity is the golden thread that runs through the relationship between the two courts. It has been rightly summed up as follows: two courts and two separate legal orders, but law that is essentially identical in substance.⁶ All three EEA jurisdictions (the CJEU, the General Court and the EFTA Court) have not only stressed the need for uniform interpretation of EU and EEA law, but have vigorously endeavoured to preserve it. The EEA Single Market can only function in an accurate manner if there is a regulatory playing field for citizens and business operators.⁷

As evidenced in Article 6 of the EEA Agreement and Article 3 paragraph 2 of the Surveillance and Court Agreement, the EFTA Court is bound to follow the relevant case law of the CJEU for the period prior to the signing of EEA Agreement (2 May 1992) and, on the other hand, it is required to pay due account to the principles laid down by the relevant rulings of the CJEU after this date.

It can certainly be argued that a requirement to follow a precedent is not the same as the requirement to pay due account to a precedent. Nevertheless, it does not appear that the EFTA Court has treated the CJEU case law differently depending on when the pertinent judgments were rendered. The reason for this ought to be twofold. first, constantly evolving case law on a particular legal issue of the EU or EEA often does not derive from one judgment only, but rather from a series of judgments rendered over a long period of time. Second, one has to take into account the fact that the contexts in which the CJEU and the EFTA Court are interpreting identical provisions are not the same. Thus, the limits between being bound by precedent and having to take due account of a precedent automatically become blurred. Conversely, there are instances after the advent of the EEA where the CJEU case law was not considered by the EFTA Court as binding in the EEA context.⁸

The provisions of the Agreement on the EEA imposing a certain stance on the EFTA Court may arguably appear to be one-sided and to force obligations exclusively on the EFTA Court. This has probably led to misinterpretations about the relationship between the two courts, even reaching the conclusion that the interpretation of EEA law rests firmly with the CJEU.⁹ However, it must be emphasised that although the exclusive burden on the EFTA Court may be the case in theory, in practice the said provisions have proved to offer an adequate framework and eventually achieve a stable and harmonious coexistence between the two courts. As a matter of fact, avoiding conflicting judgments and developing coherent case law are tasks that require constant cooperation and vigilance from all the institutions involved. The day-to-day practice of the CJEU and the EFTA Court is a vivid example of this.

Many would agree that the EFTA Court strictly respects the obligations imposed upon it by the Agreement and respects the precedence of the CJEU. It must, however, be acknowledged that the EFTA Court has gone beyond this. Although its obligations with regard to respecting the case law of the CJEU only concerned either the rules of the EEA Agreement, or EU law provisions which find their identical counterpart within the EEA context, the EFTA Court was inspired by the fundamental doctrines which underpin Union law, as developed in the CJEU case law within its corresponding domain of competence. The case law on the general prohibition to discriminate, fundamental freedoms, the principle of proportionality, fundamental notions of competition and State aid rules were taken over by the EFTA Court.¹⁰ The celebrated Sveinbjornsdóttir¹¹ judgment depicts the EFTA Court’s recognition of the fact that the EEA Agreement is a sui generis international treaty which contains a distinct legal order.

On the other hand, although precedence does not oblige the CJEU to follow or pay due account to the case law of the EFTA Court, ignoring it would risk being detrimental and would trump the principal objective of homogeneity according to the EEA Agreement. Therefore, the CJEU has not turned a blind eye to the case law of the EFTA Court and has effectively taken it into account, expressly and impliedly. A notable example is the case of EFTA Surveillance Authority v Norway,¹² which had a positive influence on the CJEU decision in the case of Commission v Denmark.¹³ In the first decade, the CJEU was faced with situations such as the one portrayed in the latter case, in which the Member States could prevent the production and marketing of enriched foodstuffs on the basis of public health concerns.¹⁴ In reaching its decision to consolidate a balance in the free movement of goods and public health concerns, the CJEU cited the former case six times. Similarly with an explicit mention of the need of uniform interpretation in Case C-471/04 Keller Holding¹⁵ the CJEU sought inspiration from the EFTA Surveillance Authority v Iceland.

Doctrine has focused on occasions where the CJEU did not follow related EFTA case law. for instance in Silhouette¹⁶ the CJEU did not refer to the EFTA Court’s ruling in Maglite.¹⁷ Advocate General Jacobs explained in his Opinion that the jurisprudence of the CJEU with regard to the functioning of trademarks was developed in the context of the EU rather than the world market, therefore justifying the result reached. The judgment reached was centred on the need to secure the functioning of the internal market.

Nevertheless, homogeneity has continued to develop and this is due to the fact that the perceptions on both sides did not end with simply paying due account. What was also evidently required was taking into consideration objectives of the EEA Agreement, and this was portrayed in the case of Ospelt.¹⁸ The issue in this case was whether EEA States were ‘third countries’ within the meaning of Article 73c of the EC Treaty and whether such restrictions on the free movement of capital could be imposed on transactions involving nationals of EEA States. The CJEU first considered that:

One of the principal aims of the EEA Agreement is to provide for the fullest possible realization of the free movement of goods, persons, services and capital within the whole European Economic Area, so that the internal market established within the European Union is extended to the EFTA States. From that angle, several provisions of the abovementioned Agreement are intended to ensure as uniform an interpretation as possible thereof throughout the EEA. It is for the Court, in that context, to ensure that the rules of the EEA Agreement which are identical in substance to those of the Treaty are interpreted uniformly with the Member States.¹⁹

The CJEU further stated:

[I]t would run counter to that objective as to uniformity of application of the rules relating to free movement of capital within the EEA for a State such as the Republic of Austria, which is a party to that Agreement, which entered into force on 1 January 1994, to be able, after its acce...

Table of contents

• Cover
• Title Page
• eCopyright
• Foreword
• Contents
• List of Contributors
• I. The EFTA Court’s Role in the Judicial Architecture of the EEA
• II. Decentred Integration
• III. General Principles and Fundamental Rights in EEA Law
• IV. EEA Business and Economic Law
• V. Actors in the EEA
• VI. A Look from the Outside