• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12

Free movement of capital and payments. Although the 1957 Treaty of Rome included free movement of capital among the foundational provisions of the European Common Market, this freedom was expressed in more ambiguous terms than the other freedoms.

Extracts from this document...

Introduction

David McCabe 11090596 1 Introduction: 1.1 The freedom of capital can be considered a late starter in some regard, when compared with the other freedoms which were outlined by the EC treaty. It was originally governed by Articles 67-73 EEC. Despite the free movement of capital being listed in Article 14 as one of the fundamental rights, its treatment has been far less liberal compared to the free movement of goods, services and persons. Indeed, by striking contrast to its approach to these freedoms, the ECJ ruled that the original pre-TEU capital provisions did not have direct effect1 and could therefore not be relied upon in the domestic courts. The reliance in national courts, by individuals, within domestic courts was a significant factor in the development of Community law. The capital provisions, quite apart from being cautiously drafted, therefore lacked this mechanism for development. The area was sensitive and linked to monetary policy and thus it was not until the TEU that we saw liberalisation of capital payments. 1.2 Although the 1957 Treaty of Rome included free movement of capital among the foundational provisions of the European Common Market, this freedom was expressed in more ambiguous terms than the other freedoms. The EC Treaty guarantees of free movement of goods, services, workers, and enterprise (or right of establishment) were recognized as having direct effect at an early stage of the evolution of EU law. However, it was not until 1990, when the third Council directive on the subject, Directive 88/361, became effective that capital movements were defined for the purposes of EU law, the Member States were legally required to eliminate barriers to free movement of capital, and individuals and companies could invoke the right to free movement of capital to challenge national tax laws in the Member States' courts, with access to the preliminary ruling process of the ECJ. 2 Who can rely on the free movement of capital? ...read more.

Middle

In any event, any rule falling within any of the above exceptions cannot constitute a means of arbitrary discrimination or disguised restriction on the free movement of capital or payments. 7.7 The ECJ has reaffirmed that derogations cannot be applied so as to serve purely economic ends21. As with the other exceptions to Treaty freedoms, it would seem that the crucial question will be that of 'was it proportionate', whether the Member State is seeking to justify its measure under the express treaty derogations or using a rule of reason style argument. 8 Rule of reason? 8.1 Article 56 does not just catch those rules which discriminate directly against capital movements; it also catches rules which indirectly restrict capital movements. With a restriction based test it seems that member states may be able to rely on grounds of overriding public interest to justify a national measure. In Reisch22 the Court, referring to previous case law in Konle23, summarised its position as follows: 'it is not in dispute that those measures, by laying down a procedure of prior notification/authorisation for the acquisition of immoveable property, restrict the free movement of capital, by their very purpose, the free movement of capital. Such restrictions may nevertheless be permitted if the national rules pursue, in a non-discriminatory way, an objective in the public interest and if they observe the principle of proportionality that is if the same result could not be achieved by other less restrictive measures.' Thus in Konle, town and county planning have been accepted as an appropriate overriding requirement in the general interest and similarly environmental protection and land management concerns have been recognised. Other grounds have been objectives connected with public housing policy24, agricultural and forestry holdings25, preservation of jobs in such holdings in cases of inheritance26 or the objective of maintaining or promoting the use of an official language.27. Economic grounds cannot afford a valid justification28 8.2 There is some lack of clarity around whether a national rule is discriminatory or not. ...read more.

Conclusion

In addition the Council may take such safeguard measures as are strictly necessary where; "in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause' serious difficulties, for the operation of economic and monetary union"37 10.3 The ECB must be consulted and the measures may not go on for more than 6 months. Article 75(1) TFEU defines the European Union's power to take economic sanctions in the sphere of capital movements and payments for the purpose of preventing and combating terrorism and related activities. The EP and Council, acting in accordance with the ordinary legislative procedure are to define a framework for such measures, which is to be implemented by the Council38 1 Casati 203/80 2 See Bordesa Case 416/93 and Sanz de lara and others case 250/94 3 Luisi and Carbone (1984)ECR 377 para. 21 4 Luisi and Carbone (1984)ECR 377 para. 33-34 5 Trummer and mayor (1999) Case C-22/97 6 See Bordesa Case 416/93 and Sanz de lara and others case 250/94 7 Reisch joined cases c 515/99, C 519-524/99 [2002] ECR 1-10309, Salzmann Case C-300/01 [2003] ECR 1-4899, 8 Svensson and Gustavassan FCR 1-3955 (1995) 9 Trummer and mayor (1999) Case C-22/97 10 The Free movement of capital and foreign direct investment- Stephen Hindelang p119 11 Article 63 12 C-319/02 13 C-35/98 14 De Lasteyrie du Saillant C-9/02 15 [Art 65(1)(b) TFEU] 16 C-478/98 17 Joined cases C-358/93 and c 416/93 18 C-54/99 19 C-163, 165 and 250/94 20 C-54/99 21 Portuguese Golden shares C-367/98 22 Joined cases C-515, 519-540/99 23 C-302/97 24 C 567/07 Woningstichtting Sint Servatius (2009) 25 C 370/05 Festersen (2007) 26 C-C-256/06 Jager (2008) 27 C-222/07 UTECA (2009) 28 C-367/98 Commission v Portugal (20020 29 C-498/98 30 C-45/05 (2007) 31 Joined cases C-165/94 and C 250/94 Sanz de Lera and others (1995) 32 Joined cases C-515, 519-540/99 Reisch and Others (2002) 33 C-367/98 Commission v Portugal (2002) 34 Commission v Denmark C-150/04 (2007) 35 C-452/04 (2006) ECR 1-1000 36 C 196/04 (2006) ECR 1-1000 37 Article 66 TFEU 38 Article 75 TFEU ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree European Union Law section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree European Union Law essays

  1. Marked by a teacher

    What is the meaning of the term 'measure equivalent to a quantitative restriction' for ...

    4 star(s)

    When brought before the Court, the Irish Government argued several points regarding the funding of the campaign, that are irrelevant to this essay, except to comment that as long as there is an element of funding by the State or State agents, the fact that private funding is also involved is no defence.

  2. The Luxembourg Compromise is, in fact, an agreement in case very important national interests ...

    for Member States to place their interests above of that of the Community, where conflicts arise. The Luxembourg Compromise can therefore be seen as an inter-governmental means of protecting national interests.

  1. Investigation of the institutions of EC Law. he main institutions of the European Community ...

    of the financial year which is presented to other Community institutions for observations and if the findings are of a negative nature then Parliament may in turn reject the Commissions plans for spending in the forthcoming year. Due to this you can see that Montesquieu's theory of the separation of powers is satisfied as the Commissions executive powers are questioned.

  2. The Principle of Direct Effect

    Therefore, El Tel Ltd cannot seek redress until one month has elapsed. However, if one month later the government has still not implemented the provision, then they are liable for failure to implement and will be in much the same position as if they had failed to implement the directive

  1. Eu Directives Problem Case. Difficulties arise in situations such as the one faced by ...

    last instance can give rise to state liability, though in this case the breach was not sufficiently serious.

  2. EU institutions

    Nevertheless, the EP had not been placed on an equal footing with the other two institutions, but it had definitely been granted more power then it had before. _____________ 7 Craig, P. and Burca G., 2008. EU LAW. Texts, cases and materials.

  1. EU Law - Albatros Pool problem case. Mark and Sunita must be advised that ...

    Law of the European Union, Kent, P., (2001) Longman 6. Basic Community Cases, Rudden and Phelan, (1997) Oxford University Press 7. Cases and Materials on EU Law, Weatherill, (2005) Oxford University Press 8. Europa: Gateway to the European Union: http://europa.eu.int/index_en.htm.

  2. What was the relationship between the Factortame case and the Treaty of Rome 1957?

    Factortame I A preliminary ruling[25][26][27][28][29] was sought as well as an order preventing the Secretary of State from enforcing re-registrations and allowing registration under the 1894 Act[30][31] to remain active[32]. In June 1990, the ECJ held that, as per Article 5 of the Treaty[33], a national court is to ensure

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work