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The European Union’s Approach to Legal Non-Retrospectivity: Are There Problems for International Businesses?
Des Taylor[1]
The European Union (EU) is one of the major and important trading areas of the world.[2] As a consequence, many international businesses are likely, at some stage, to be involved in transactions which have a ‘European Union’ aspect to them. Whilst such business transactions will, essentially, occur in one of two ways—they will arise from business transactions conducted entirely within the EU, or they will arise by virtue of business transactions conducted with the EU—it is not important that there are different circumstances giving rise to such transactions; what is important is that such transactions will all, to varying degrees, be subject to the laws and legal order of the EU.
For such businesses—like any business—it is very important that there be legal certainty. This involves the business knowing, or at least being able easily to ascertain, what is the governing law that applies to the particular transaction in which they are (or are likely to become) involved. If businesses cannot ascertain the applicable law that governs an existing or contemplated venture, they run the risk of being in a situation of legal uncertainty. Such a prospect can easily deter businesses from embarking on commercial ventures. This is because business persons—whilst they might be prepared to take risks (regarding the success or otherwise of their contemplated undertaking) based on the merits of their particular product or service—they are unlikely to embark on a project if the legal ground rules of the environment in which they are to operate are uncertain. Hence, legal certainty is an important factor in the encouragement or discouragement of international business.
Before explaining further and examining the concept of legal certainty and the sub-concept of non-retrospectivity as it occurs in the EU legal order, it is first necessary to briefly describe the nature of the EU and its legal order.
The EU is a grouping of 15 European states—Austria, Belgium, Denmark, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom—in which, inter alia, goods, services, people and capital circulate freely.3 Approximately 378 million people are citizens of the EU,[4] which is still growing. By virtue of the agreement between the EU and the EFTA (European Free Trade Association) countries,[5] which came into force on 1 January 1994, the EU’s Single Market has been extended to the EFTA countries other than Switzerland. The entire area now covered by the Single Market is known as the European Economic Area (EEA). Its population is approximately 382 million people.[6] In addition to this, countries such as Turkey, Cyprus, Malta, Hungary, Poland, Romania, Slovakia, Latvia, Estonia, Lithuania, Bulgaria, the Czech Republic and Slovenia have all lodged applications to join the EU.[7]
In the area of international trade, the EU is already the world’s largest trading entity, accounting for approximately one-fifth of the total global trade in goods.[8] In addition, the EU is emerging as an important ‘collective’ world power.[9] In the future, the EU’s importance both in relation to trade and political clout will no doubt increase even further. As Lester Thurow has argued, it is even possible that it will be the EU, not Asia (or especially China), which writes and dominates the agenda for the 21st century.[10]
There are, in fact, three European Communities, namely the European Coal and Steel Community (ECSC), the European Atomic Energy Community (Euratom) and the European Community (EC). The combined ECSC, Euratom and EC are, however, now often collectively referred to as simply the ‘European Community’, or ‘EC’.[11] The members of all three Communities at the present time are the aforementioned 15 states. Initially, the three Communities had different institutions, but this was changed by the Merger Treaty of 1965 which made the same institutions common to all three Communities. In the discussion which follows, whenever reference is made to the European Communities, the focus will be primarily on the most important Community of the three, namely the European Community.
The comparatively new EU was created by the Treaty on European Union (TEU) which came into force on 1 November 1993. The EU is something of a hybrid. It is not vested with a ‘legal personality’ as such, nor has there been any transfer to it of sovereign powers by the member states. Rather, it has been created as a superstructure over ‘three pillars’. The first pillar comprises the aforementioned three Communities (namely the ECSC, Euratom and the EC). The second pillar comprises co-operation among the member states with a view to adopting joint action in the field of foreign and security policy (CFSP). The third pillar comprises co-operation among the member states with a view to framing common policies in justice and home affairs (CJHA). The EU is served by the same institutional framework that applies to the European Communities.
Consequently there is, at the present time, both an EC and an EU, with the former being part of the ‘three pillars’ structure of the latter. For the sake of simplicity, and in keeping with what seems to have become the accepted practice (since the entering into force of the TEU), the term ‘European Union’ (or ‘EU’) has herein generally been used even when, strictly speaking, the term ‘European Community’ (or ‘EC’) may be the correct terminology. Likewise, when mention is made herein of, for example, ‘an institution of the EU’, strictly speaking it may actually be ‘an institution of the EC’. Similarly, even though a country may now be, and may be referred to herein as, an ‘EU member state’, at the time of the particular happening under discussion, it may actually have been an ‘EC member state’ or even an ‘EEC member state’.
The EU legal order is, essentially, the law of the European Communities as it applies throughout the EU. It is a separate legal order in the sense that it is distinct from—though closely linked to—the legal systems of the EU member states.[12] This is because the Treaties upon which the EU is founded are more than just international agreements: they form the ‘Constitution’ of the EU.[13] An important consequence of this separate legal existence is that the national legislatures of the EU member states have no power to amend or repeal any part of EU law.[14] Furthermore, in the event of conflict, EU law is supreme (that is, it overrides national law).[15] Another important characteristic of EU law is its ability, provided certain conditions are satisfied, to confer rights or obligations directly on the citizens of the EU. This is known as the doctrine of direct effect.
EU law comes in two forms: ‘written’ and ‘unwritten’. There are three main sources of written EU law, namely:
(a) the three founding Treaties (as amended) and their various annexes and protocols;
(b) the secondary legislation (for example, the Regulations, Directives, Decisions, Recommendations and Opinions made by the EU institutions in the exercise of the powers conferred on them in the founding Treaties);
(c) the agreements the EU has concluded with non-EU member states and other international organisations.[16]
As with all written legal systems, gaps do appear from time to time in the written law of the EU. It is the role of the ‘unwritten EU law’ to fill in such gaps. Such unwritten law comprises the ‘general principles of EU law’ recognised by the ECJ in its judgments.[17] These general principles of EU law include:
(a) the principle of respect for fundamental human rights;
(b) the principle of proportionality;
(c) the principle of natural justice;
(d) the principle of equality;
(e) the principle of legal professional privilege;
(f) the principle of legal certainty.
One of the sub-concepts of the principle of legal certainty is ‘ nonretrospectivity’, which is the focus of this article.
To this point, there has been mention of the importance of the EU to international businesses and the problems generally that legal uncertainty (in any environment) can cause. There has also been given a brief description of the structure of the European Union and its legal order as well as an indication that one of the general principles of EU law is the principle of legal certainty, of which non-retrospectivity is a sub-concept. Such sub-concept of nonretrospectivity in the EU legal order will now be further examined and discussed, and thereafter some conclusions will be proffered that, the writer submits, can be drawn as to whether or not the EU’s approach to legal nonretrospectivity causes any problems for international businesses.
As already mentioned, non-retrospectivity is a sub-concept of the overriding principle of legal certainty. This latter principle (legal certainty) is not something which requires the law to be rigid (that is, fixed and inflexible). Rigidity is synonymous with being impervious to change. The law, almost always, needs to have some degree of flexibility so that judges, using their discretion, can apply it to different situations and different persons. As Lord Lloyd and Michael Freeman have noted, a legal system which does not allow, within certain limits, room for judges to manoeuvre will be unworkable.[18] In fact, it would seem that only a totally static society could tolerate a completely rigid system of law.[19] Rather, legal certainty is all about legal predictability. This, essentially, means that the applicable law should be clear and precise—and its effect should be predictable. If this is just not possible, then persons and entities are in a most precarious and unsatisfactory situation—namely, one of legal uncertainty. For business persons, especially, a state of legal uncertainty can be, at the least, a hindrance and, more seriously, a deterrent.
With legal certainty, there is the main principle—the principle of legal certainty, and there are various sub-concepts, or special applications, of the main principle—namely, the protection of vested rights,[20] the protection of legitimate
expectations[21] and non-retroactivity. These sub-concepts are found amongst the various major ‘characteristics’ of legal certainty which have been identified by the European Court of Justice (ECJ) in its judgments. Such major characteristics of legal certainty are what the ECJ principally looks for when a question arises as to whether legal certainty is or is not present in relation to a particular EU law (or administrative act). They are as follows:
1 EU laws must be clear, precise and predictable. In Kloppenburg, the ECJ said that the principle of legal certainty means that ‘Community legislation must be unequivocal and its application must be predictable for those who are subject to it’.[22] Likewise, in Gondrand, the ECJ spoke of the need for EU law to be ‘clear and precise so that those concerned may know without ambiguity what are their rights and obligations and may take steps accordingly’.[23] In another case, Commission v United Kingdom, the ECJ spoke of the need for ‘legal clarity’.[24]
2 EU laws must be in a language understandable by the person to whom they are directed. This was emphasised in Farrauto,[25] where the ECJ observed that The national courts of the Member States must…take care that legal certainty is not prejudiced by a failure arising from the inability of the worker to understand the language in which a decision is notified to him’.[26]
3 Any factual situation should normally, in the absence of any contrary legal provision, be examined in the light of the legal rules existing at the time when that situation took place.[27] What this means is that laws should be contemporaneous with the situation under review. Laws should not apply retrospectively. This links in with the fundamental ‘core aspect’ of legal certainty that persons should at all times know, or at least be able to ascertain, the legal consequences of a contemplated course of action—and they cannot do this if laws are not contemporaneous with situations. An example of this requirement can be seen in Pedro Burdalo Trevejo and Others v Fondo Garantía Salarial.[28] This was an Art 234 (ex Art 177) EC reference by a
Spanish court to the ECJ concerning the interpretation of a Council Directive 77/187 of 14 February 1977 regarding the safeguarding of employees’ rights in the event of transfers of undertakings. The ECJ ruled that it followed from the facts that, irrespective of the material scope of the Directive in circumstances such as those described by the national court, the Directive could not assist the employees concerned ‘since the transfer of the undertaking which was at issue took place prior to the date on which the directive first produced legal effects in the Member State concerned’.[29] The date of the ‘transfer’ (19 May 1978) preceded the accession of Spain to the Communities, which produced legal effects only from 1 January 1986. Thus the Directive could not be relied on because the transfer of the undertaking occurred before the Directive had begun to produce legal effects in Spain (the member state concerned).[30] In line with this requirement of legal certainty (that is, that laws should be contemporaneous with situations), EU laws generally only take effect on a particular date after their publication in the Official Journal (OJ).[31] Publication in the OJ is deemed to be notification to everyone of the existence and content of the particular laws—and the date on which they will take effect.[32] Only in exceptional cases, where the purpose to be achieved so demands, and where the legitimate expectations of the persons concerned are duly respected, is it possible for an EU law to take effect before the date of its publication in the OJ (that is, to apply retroactively).[33]
4 EU laws should not (generally) come into force immediately.[34] Otherwise, there may be legal uncertainty because, whilst persons may know of the existence of the particular laws, they may not know or appreciate the extent of their obligations thereunder. In Neumann, for example, the ECJ said that an ‘institution cannot, without having an adverse effect on a legitimate regard for legal certainty resort without reason to the procedure of an immediate entry into force’.[35] Likewise, in Deuka, the ECJ held that any amending legislation should have adequate transitional provisions so that the people and entities covered or affected by such legislation can adjust themselves to the new régime.[36] It is not invariably the case that there can be no immediate application of EU law: it is just that
normally this is the situation. In exceptional circumstances, an immediate application of the particular law may be justified—and, in Neumann,[37] this was held to be the case.
5 In order to ensure legal certainty, there should be time limits. Time limits are, essentially, periods of time within which proceedings[38] must be commenced or some other action[39] taken; otherwise—after the expiration of the particular period of time (that is, the time limit)—such proceedings or other action are barred. Time limits ensure legal certainty because the uncertainty brought about by the possibility of laws being annulled, or of a state of inaction being changed, is removed once the prescribed time limit has passed.[40]
6 Vested rights should normally be protected.[41] Basically, the position regarding the protection of vested rights is as follows: where individual rights are conferred by individual administrative measures, the rights that arise are vested (or acquired) rights. If the vested rights arise from lawful measures, they are protected by the principle of legal certainty and cannot be withdrawn retroactively. Whether they can be withdrawn for the future (that is, prospectively) depends on the terms of the measure by which they were conferred. If the EU measure which gave rise to the vested rights is unlawful, the vested rights can always be revoked, at least prospectively, provided (a) this is done within a reasonable time and (b) the EU institution concerned gives sufficient regard to how far the persons affected by the measure may have been led to rely on its ‘lawfulness’.[42] One of the leading cases in this area is Algera.[43] As regards the retroactive revocation of vested rights conferred by unlawful measures, basically the situation is that retroactive withdrawal of vested rights conferred by an unlawful measure is only possible if (a) the particular measure was adopted on the basis of false or incomplete information provided by the persons affected by the measure,[44] or (b) the particular measure is illegal or erroneous.[45] If the ECJ does allow the retroactive revocation of vested rights conferred by an unlawful measure, such revocation is, generally, subject to very strict conditions.[46] In Consorzio Cooperative d’Abruzzo,[47] unreasonable delay was held to be a bar to the retroactive revocation of an unlawful measure.
7 Legitimate expectations should normally be protected. Essentially this means that EU law should not be different from that which could reasonably be expected. Eleanor Sharpston has correctly commented in this regard that a ‘legitimate expectation’ is a belief that it was legitimate for him or her to entertain as to the way in which he or she would be treated by an EU institution in the application of EU laws and measures.[48] It is fairly clear from the ECJ’s case-law that the mere fact that a trader is disadvantaged by a change in the law will not, in itself, give any cause for complaint based upon disappointment of legitimate expectations.[49] As Jurgen Schwarze has stated: ‘[The] Court has emphasised the essential freedom enjoyed by the legislature to alter for the future the fundamental legal conditions in which traders operate, even if the changes made work to the disadvantage of all firms in a certain industrial sector.’[50] It seems that, in order to establish a claim for infringement of legitimate expectations, essentially what an individual must be able to do is to point either to ‘a bargain’ of some form which has been entered into between the individual and the authorities, or to ‘a course of conduct or assurance’ on the part of the authorities which can be said to generate the legitimate expectations.[51] As regards an overall appraisal of the protection of legitimate expectations, it seems the case-law of the ECJ pivots around the question of ‘the foreseeability of change’. A distinction is drawn between ‘quantitative change’—for example, an adjustment to the monetary compensatory amounts, which is usually considered to be foreseeable, and ‘qualitative change’—for example, a modification of the underlying system, where foreseeability depends, to a large extent, on the nature of the change effected. A distinction can also be detected between ‘changes of view by the authorities’—which are not usually considered to be foreseeable, and ‘changes in underlying circumstances’—which may well be foreseeable by the alert or prudent trader.
8 In order to ensure legal certainty, there should be continuity of existing legal
concepts and organisation whenever legislation is amended or altered (unless
the legislature expresses a contrary intention).52
The aforegoing are just the ‘major’ characteristics of legal certainty identified by the ECJ. There are also various other characteristics of legal certainty, such as:
(i) Agreements (such as those falling under Art 81 (ex Art 85) EC) should not be rendered automatically void without any examination. This was so held in Bosch.[53] In that case, the ECJ ruled that in general it would be contrary to the general principle of legal certainty to render agreements automatically void before it is even possible to tell which are the agreements to which Art 85 EC (now Art 81 EC) as a whole applies.54
(ii) Every EU institution should abide by and respect its own rules and decisions. This principle is known as patere legem quam ipse fecisti. It has often been raised before the ECJ but seldom applied.[55] A typical case where this principle was raised is Mulcahy.56
From characteristics 3 and 6, it can be seen that the EU legal order recognises the need generally for non-retroactivity. By virtue of characteristic 3, EU laws should not be made to apply retrospectively and any factual situation should normally, in the absence of any contrary legal provision, be examined in the light of the legal rules existing at the time when that situation took place. From characteristic 6, it can be seen that not only does the EU legal order recognise the need to protect vested rights, it also takes the attitude that:
(i) if the vested rights arise from lawful measures, they are protected by the principle of legal certainty and cannot be withdrawn retroactively; and
(ii) a retroactive withdrawal of vested rights conferred by an unlawful measure is only possible if the particular measure was adopted on the basis of false or incomplete information provided by the persons affected by the measure, or the particular measure is illegal or erroneous—and, in any event, if the ECJ does allow the retroactive revocation of vested rights conferred by an unlawful measure, such revocation is, generally, subject to very strict conditions.
This approach to non-retroactivity is reinforced by characteristics 4 and 8. Characteristic 4 supplements the requirement for there to be non-retrospectivity by requiring that, also, adequate forewarning should be given of future changes to the laws of the EU (EU laws should not generally come into force immediately). Businesspersons should thus be able to proceed in the knowledge that, normally, there will not only be no changes to the law as it applies to past transactions, but also as regards future transactions they will be given adequate forewarning to enable them to adapt to any changes in the law. Characteristic 8 (there should be continuity of existing legal concepts and organisation) further complements the attempt to ease the adaptation to future changes in the law. An example of how characteristic 8 works can be seen in the continuity arrangements which were made by the EU regarding the introduction of the euro currency: the EU, inter alia, adopted rules designed to guarantee the continuity of contracts denominated in national currencies between the start of the final stage of Economic and Monetary Union (EMU) on 1 January 1999 and the ending of national currencies by 1 July 2002, so as to provide legal certainty for businesses (and consumers).
From the aforegoing, it can be clearly seen that the ECJ has extensively and comprehensively identified the ‘characteristics’ of legal certainty—and amongst these is ‘non-retrospectivity’. The nature of non-retroactivity in EU law will now be examined further.
Essentially, non-retroactivity (in EU law) means that, in the interests of legal certainty, acts, events, situations and legal relationships which occurred or arose before the entry into force of an EU law should not be affected by that law. There are two contexts in which non-retroactivity can be considered and discussed, namely:
1 the acts of the EU institutions;
2 the judgments of the ECJ.
The ECJ has developed various rules concerning non-retroactivity in relation to the acts of the EU institutions. These are as follows (some have already been mentioned).
The first rule is that, whilst in principle the EU institutions are free to determine the date on which their laws come into force,[57] normally such laws cannot apply retroactively, that is, they cannot produce legal effects in respect of events taking place prior to the date of their actual publication in the OJ.[58] The basis for this is, of course, the principle of legal certainty which, as has been mentioned earlier, equates with legal predictability. There cannot be legal predictability if laws are made to apply retroactively.
The second of the rules developed by the ECJ (in relation to non-retroactivity and the acts of the EU institutions) is that, as also mentioned previously, whilst EU laws such as Regulations may enter into force on the day of their actual publication in the OJ and thus produce immediate legal effects, this is something which is normally incompatible with the principle of legal certainty. In order for there to be legal certainty, persons affected by new laws should not only be made aware of the existence of such laws, they should also be allowed sufficient time to make themselves fully acquainted with the laws’ content, ramifications and scope. In general, the immediate entry into force of a measure (such as a Regulation) is justified only where there are serious reasons for holding that any interval between the publication and the entry into force of the measure would have been prejudicial to the EU.[59]
The third of the rules developed by the ECJ (in relation to non-retroactivity and the acts of the EU institutions) is that—notwithstanding the aforementioned previous rules—in certain circumstances where special conditions are met, a degree of retroactivity will, however, be allowed. Initially, the ECJ, in cases such as Siemers, stated quite categorically that a measure which is of a legislative nature cannot have retroactive effect.[60] By this the ECJ meant, for example, that a Regulation could not be used for the purposes of determining the classification of products imported, before its entry into force. Subsequently, however, the ECJ subjected its ruling in Siemers to certain exceptions. In Racke, for example, the ECJ stated that, although in general the principle of legal certainty precludes a Community measure from taking effect from a point in time before its publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.[61]
An example of a situation where retroactivity was not acceptable can be seen in Diversinte SA & Another v Adminstracion Principal de Aduanas e Impuestos Especiales de La Junquera.[62] The background facts were as follows:
(a) Between 28 February 1987 and 2 March 1987, Iberlacta (one of the plaintiffs) had exported to Germany 207 tonnes of denatured milk powder containing 12% fat.
(b) Between 3 and 5 March 1987, Diversinte (the other plaintiff) had exported to the same destination 120 tonnes of a similar product containing 18% fat.
(c) As at those dates (when the exporting was actually done), the denatured milk powder was exempt from a certain agricultural tax.
Subsequently, however—on 17 March 1987—Regulation 744/87 was published in the OJ. According to its terms, the particular agricultural tax on the export of milk powder was extended to certain previously exempt products (including those of the plaintiffs) with effect from 12 February 1987. The plaintiffs contested their liability to such tax. According to them, Regulation 744/87 was invalid because it was retroactive and did not satisfy the conditions under which the ECJ permitted retroactivity. In its judgment, the ECJ noted firstly that it has been consistently held that, although in general the principle of legal certainty precludes a Community measure from taking effect before its publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly protected.[63] It then went on to note, however, that although—according to the case-law of the Court—it is not impossible for measures to have retroactive effect, measures having such effect must include, in the statement of reasons on which they are based, particulars which justify the desired retroactive effect.[64] The ECJ thereafter observed that, in the instant case, the Regulation in dispute (dated 16 March 1987) did not explain anywhere why it had a retroactive effect as from 12 February 1987. In fact, the third recital in the Regulation’s preamble merely stated that ‘in order to prevent speculation in the product covered by the Regulation the latter’s provisions should be introduced as a matter of urgency’. At best, that recital enabled it to be understood why the Regulation was immediately applicable—but it did not state why the charge had to affect traders who exported non-skimmed milk in the month prior to the adoption of the Regulation.[65] That lack of information made it impossible for the ECJ to review the extent to which the retroactive effect was justified by the objective of the Regulation, or whether the legitimate expectation of the traders in question was protected.[66] Consequently, in those circumstances the ECJ had no alternative but to declare that the Regulation in dispute did not meet the requirement of stating reasons laid down by Art 190 EC. This, in turn, meant that the second paragraph of Art 3 of Commission Regulation (EEC) No 744/87 of 16 March 1987—amending Regulation (EEC) 805/86 introducing a charge on denatured skimmed-milk powder coming from Spain and derogating from Regulation (EEC) 1378/86 as regards the accession compensatory amounts in trade with Spain—was invalid in so far as it declared that the Regulation was applicable with effect from 12 February 1987 (that is, retroactively).[67]
The fourth of the rules developed by the ECJ (in relation to non-retroactivity and the acts of the EU institutions) is that, although procedural rules are generally held to apply to all proceedings pending at the time when they enter into force, this is not the case with substantive rules. On the contrary, the latter are usually interpreted as applying to situations existing before their entry into force only in so far as it clearly follows from their terms, objectives or general scheme that such an effect must be given to them.[68] As the ECJ said in Salumi: ‘This interpretation ensures respect for the principles of legal certainty and the protection of legitimate expectations, by virtue of which the effect of Community legislation must be clear and predictable for those who are subject to it.’69
In Salumi, the Corte Suprema di Cassazione in Rome referred to the ECJ for a preliminary ruling under Art 177 EC various questions on the interpretation of Council Regulation (EEC) 1697/79 of 24 July 1979 (which entered into force on 1 July 1980) on the post-clearance recovery of import duties or export duties which had not been required of the person liable for payment at the time the goods passed through the customs procedures. Various traders had challenged amended notices, issued by the Italian State Finance Administration (Amministrazione delle Finanze dello Stato), requiring them to pay a sum equal to the difference between the agricultural levy calculated at the rate applicable on the day of acceptance of the import declaration and the levy calculated at the more favourable rate introduced between the import declaration and the release of the goods for home use. The Italian State Finance Administration claimed that the more favourable rate had been applied in error.[70] In its judgment, the ECJ noted that it was clear from the documents before the court that until 1976 the Italian authorities had always calculated the levies by applying the more favourable rate at the request of the importer.[71] The ECJ had, however, in its earlier judgment of 15 June 1976 in Frecassetti,[72] held that that method could not be applied to agricultural levies on imports from non-member states, which had to be calculated at the rate applicable on the day when the import declaration was accepted by the customs authorities. To give effect to this decision of the ECJ, Regulation 1697/97 was enacted. By virtue of such Regulation, where the competent authorities found that the correct amount of duties had not been charged, they were obliged to take action to recover them. Essentially, what the ECJ was now being asked in this reference was to determine the Regulation’s effect ratione temporis (that is, whether it applied retrospectively). After indicating (as mentioned above) that substantive rules are usually interpreted as applying to situations existing before their entry into force only in so far as it clearly follows from their terms, objectives or general scheme that such an effect must be given to them, the ECJ stated that the provisions of the Regulation could not be accorded retroactive effect unless sufficiently clear indications led to such a conclusion.[73] The ECJ then stated that, far from indicating any retroactive effect, both the wording and the general scheme of the Regulation led it to the conclusion that the Regulation provided only for the future.[74]
The fifth of the rules developed by the ECJ (in relation to non-retroactivity and the acts of the EU institutions) is that the principle of non-retroactivity does not apply to interpretations of EU laws. If an EU law is not clear and is clarified by a subsequent EU law, the clarification contained in the later rule may be used for cases which occurred prior to the later law’s coming into existence.[75] For example, in Osram,[76] the Council implemented, subsequently, certain rules for the interpretation of the Common Customs Tariff. The ECJ accepted that such rules were applicable to goods imported even prior to the date of implementation of the rules. In its judgment, the ECJ observed: ‘[These] Rules for interpretation were devised with the aim of co-ordinating, for the tariff as a whole, interpretation practices laid down by special provisions, so that they do not form a legal innovation but apply to imports effected even before 1 January 1972.’[77] However, in deciding whether something really is just an interpretative provision, the ECJ adopts a restrictive approach. This can be seen from cases such as Biegi.[78]
In relation to non-retroactivity and the judgments of the ECJ, the position is as follows. ECJ judgments which are:
(a) given in direct actions for annulment declaring an act of an EU institution void;[79]
(b) given in reference proceedings for a preliminary ruling declaring an act of an EU institution invalid;[80]
(c) interpretative judgments and, in particular, interpretative preliminary rulings[81]
are normally regarded as having retroactive effect going back in time to the coming into force of the particular law or measure to which they relate. However, the ECJ may, exceptionally, ‘in application of the general principles of legal certainty inherent in the Community legal order’, restrict the retroactive effect of its interpretative judgments in order not to upset legal relationships established in good faith in the past.[82] Likewise, for reasons of legal certainty, the ECJ may restrict the retroactive effect of a judgment declaring a Regulation void or invalid.[83]
In the following discussion, there is separate consideration of:
(a) the ECJ’s preliminary rulings on interpretation; and
(b) the ECJ’s preliminary rulings on validity.
It is generally considered that the ECJ’s Art 234 (ex Art 177) EC preliminary rulings on interpretation apply retrospectively. As the ECJ said in Salumi:
The interpretation which, in the exercise of the jurisdiction conferred on it by Art 177 of the EEC Treaty, the Court of Justice gives to a rule of Community law clarifies and defines where necessary the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its coming into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction are satisfied.84
However, notwithstanding the above-mentioned ‘normal’ position regarding the ECJ’s Art 234 (ex Art 177) EC interpretative preliminary rulings (that is, that they apply retrospectively), exceptionally the court may—in application of the general principle of legal certainty inherent in the Community legal order and in taking account of the serious effects which its judgment might have, as regards the past, on legal relationships established in good faith—be moved to restrict for any person concerned the opportunity of relying upon the provisions as thus interpreted, with a view to calling in question those legal relationships.[85] In other words, in exceptional situations, in the interests of legal certainty, the ECJ can declare that its interpretative judgment will only apply prospectively (that is, for the future). The ‘exceptional situations’ when the ECJ might be moved to do this arise when it gives a ‘new’ interpretation to some aspect of EU law. Here the word ‘new’ is used in the sense of ‘completely different and unexpected’ as compared to earlier case law. Because such new interpretation is completely different and unexpected, the ECJ, by imposing a temporal limitation, endeavours to preserve a state of legal certainty for persons who organised their affairs and otherwise acted on the basis of the law as it was understood to be previously. The effect of a temporal limitation in an interpretative judgment is to prevent anyone other than the plaintiff in the particular case—and those persons who have already instituted proceedings as at the date of the judgment—from relying on the ruling in respect of the period preceding the date on which it was delivered.
The following are some examples of the cases where the ECJ has imposed temporal limitations in its interpretative judgments.
Defrenne (No 2)
In Defrenne (No 2),[86] the ECJ held that the equal pay provision of Art 119 (now Art 141) EC had direct effect, in the sense that any female worker could rely on it in proceedings against her employer before courts of any of the member states. However, because this was a ‘new’ interpretation which was contrary to the conclusions previously reached by most of the authors on the subject,[87] the ECJ added a ‘temporal limitation’ to its judgment. The ECJ decided that ‘important considerations of legal certainty affecting all the interests involved’ made it impossible to reopen the question as regards the past and, therefore, although Art 119 (now Art 234) EC was directly effective, only workers who had already brought legal proceedings at the date of the judgment could benefit from the ruling as to such direct effect.[88] An analysis of the Defrenne (No 2) judgment shows that—in relation to the issue as to whether or not it should impose a temporal limitation—the ECJ regards the following as important and relevant:
(a) the practical (for example, financial) consequences;
(b) the misapprehension of the parties as to the state of the law; and
(c) the conduct on the part of the EU institution (in this case, the Commission).
At this point, it is also mentioned that, in various judgments handed down in cases subsequent to Defrenne (No 2), such as Ariete SpA89 and Salumi Srl,[90] the ECJ emphasised that Defrenne (No 2) was an ‘exceptional’ case and that temporal limitations will only be imposed in exceptional cases. The ‘general rule’ is that an interpretation applies retrospectively. Moreover, such a temporal limitation may be allowed only by the ECJ and only in the interpretative judgment itself.[91]
Blaizot
The ECJ also imposed a temporal limitation when giving its judgment in Blaizot.[92] That case involved a demand for restitution of university fees which a French citizen (Vincent Blaizot) and 16 other students had made to the University of Liège in Belgium. The fees at issue were supplementary registration fees (Minerval) paid by non-Belgian students prior to 13 February 1985. This was the date on which the ECJ had decided in Gravier[93] that the imposition of such fees constituted discrimination on the grounds of nationality which was prohibited by the EC Treaty. In their submissions to the ECJ, the University of Liège and the other defendants in Blaizot emphasised that the judgment in Gravier constituted a ‘new development in Community law’ which ‘would have serious repercussions if it were to have effect from 1 September 1976 onwards’ (that is, be retrospective).[94] The situation was, they submitted, comparable to that in Defrenne (No 2)[95] They therefore asked the ECJ to impose a temporal limitation. In agreeing to grant this request, the ECJ pointed out that, as it had recognised in its judgment in Defrenne (No 2), ‘it is only exceptionally that [the ECJ] may, in application of the general principle of legal certainty inherent in the Community legal order, be moved to restrict for any person concerned the opportunity of relying upon the provision as thus interpreted with a view to calling in question legal relationships established in good faith’,[96] and that ‘such a restriction may be allowed only in the actual judgment ruling upon the interpretation sought’.[97]
In support of its decision to impose a temporal limitation in its Blaizot judgment, the ECJ initially stated (at para 29):
This judgment deals for the first time with the question whether university education may be regarded as constituting vocational training for the purposes of Art 128 of the EEC Treaty.
(At para 30):
As the Court has held [in Defrenne (No 2)], in determining whether or not to limit the temporal effect of a judgment it is necessary to bear in mind that although the practical consequences of any judicial decision must be weighed carefully, the Court cannot go so far as to diminish the objectivity of the law and compromise its future application on the ground of the possible repercussions which might result, as regards the past, from a judicial decision.
(And at para 31):
This case marks a development with regard to the inclusion of university studies in the scope of the term ‘vocational training’ for the purposes of Community law.[98]
The ECJ then went on to point out that, before Gravier, the scope of the term ‘vocational training’ was uncertain. It was only when the ECJ gave its judgment in Gravier that such previous uncertainty was ended (because it was then known that the university studies preparatory to the exercise of a trade or profession were covered by the term ‘vocational training’).99 These comments display the ECJ’s acceptance that there was a ‘new’ development in the law (in the sense of it being ‘completely différent and unexpected’). The ECJ also indicated, in paras 32 and 33 of the judgment, how the national authorities were mislead by the conduct of the Commission as to the true legal position:
Indeed, with regard to university education, that development is reflected in the conduct of the Commission. Letters sent by the Commission to Belgium in 1984 show that at that time the Commission did not consider the imposition of the supplementary enrolment fee to be contrary to Community law. It was not until 25 June 1985, in the course of an informal meeting with officials of the Belgian Education Ministries, that the Commission stated that it had changed its position. Two days later, more than four months after the delivery of the Judgment of 13 February 1985, it stated during a meeting of the education committee established by the Council that it had not completed its review of the matter; that is to say, it had not yet formed a definite opinion of the conclusions to be drawn from that judgment, which itself concerned technical education, as was pointed out above. The attitude thus adopted by the Commission might reasonably have led the authorities concerned in Belgium to consider that the relevant Belgian legislation was in conformity with Community law.[100]
As a result, the ECJ concluded that, in those circumstances, pressing considerations of legal certainty precluded any reopening of the question of past legal relationships where that would retroactively throw the financing of university education into confusion and might have unforeseeable consequences for the proper functioning of universities.[101] Therefore, in so far as access to university studies was concerned, the direct effect of (then) Art 7 of the Treaty could not be relied on in support of claims regarding supplementary enrolment fees improperly charged prior to the date of this judgment, except in respect of students who had brought legal proceedings or submitted an equivalent claim before that date.[102] Thus, in Blaizot—as it has subsequently done in other cases[103] —the ECJ, in deciding whether or not to impose a temporal limitation, looked for and highlighted the same type of criteria as it gave prominence to in Defrenne (No 2), namely:
(a) the practical (that is, financial) consequences;
(b) the misapprehension of the parties as to the state of the law; and
(c) the conduct on the part of the particular EU institution.
This is basically what Advocate General Tesauro was referring to when, in his Opinion in Simitzi v Kos[104] he stated that, in taking a decision to impose a temporal limitation, the ECJ has consistently applied two principles, namely:
First, it weighs the possible practical consequences of its judgments in the absence of any temporal limitation, while pointing out that this cannot go so far as to diminish the objectivity of the law and compromise its future application on the ground of possible repercussions which might result, as regards the past, from a judicial decision. Secondly, the Court considers whether there were any objective uncertainties as to the scope of the provisions of Community law which are the subject of the interpretative judgment and to what extent the actual conduct of the Community institutions might have nurtured those uncertainties.[105]
From the comments of the ECJ in its judgments in cases such as Defrenne (No 2), it seems fairly obvious that financial considerations are an important factor, but they will not by themselves justify the imposition of a temporal limitation.
This can also be seen from the ECJ’s judgments in Dansk Denkavit,[106] Roders[107] and Richardson.[108] To justify the imposition of a temporal limitation, there must also be present the other factors, namely misapprehension as to the state of the law (that is, legal uncertainty) and conduct on the part of an EU institution which caused the parties to be mislead.
In a number of cases—such as Worringham and Humphreys,109 Francovich,[110] Lancry[111] and Richardson[112] —the ECJ has chosen not to impose temporal limitations, even though it was requested to do so by the parties. In Worringham and Humphreys,[113] for example, the ECJ ruled that a contribution to a retirement benefits scheme which was paid by an employer on behalf of employees by means of an addition to the gross salary and which, therefore, helped to determine the amount of that salary constituted ‘pay’ within the meaning of the second paragraph of Art 119 (now Art 141) EC. The defendant employer (Lloyd’s Bank) asked the ECJ to impose a temporal limitation in its ruling because, otherwise, the judgment would lead to claims for the retrospective adjustment of pay scales covering a period of years.[114] After first stating that although the consequences of any judicial decision must be carefully taken into account (but not if it diminished the objectivity of the law and compromised its future), the ECJ then went on to point out that, in its Defrenne (No 2) judgment, it had accepted that a temporal restriction on the direct effect of Art 119 (now Art 141) EC might be taken into account, exceptionally, having regard:
(a) to the fact that the parties concerned, in the light of the conduct of several Member States and the views adopted by the Commission and repeatedly brought to the notice of the circles concerned, had been led to continue, over a long period, with practices which were contrary to Art 119 (now Art 141) EC; and
(b) to the fact that important questions of legal certainty affecting not only the interests of the parties to the main action but also a whole series of interests, both public and private, made it undesirable in principle to reopen the question of pay as regards the past.[115]
The ECJ then said that, in this case neither of these conditions has been fulfilled.
In Francovich,[116] the ECJ held that where an EU member state (in this case, Italy) had failed to implement an EU Directive, it was obliged to compensate individuals for the damage suffered (as a result of its failure to implement the Directive), provided certain conditions were satisfied. In his Opinion, the Advocate General had proposed the imposition of a temporal limitation; his view was that this was justified given the uncertainty regarding the legal ground of the liability of the EU member states, its required conditions, its extent and the financial consequences that might be entailed. However, the ECJ did not follow the Advocate General’s suggestion and no temporal limitation was imposed. It would seem that the ECJ’s reason for not imposing a temporal limitation in its judgment in Francovich was that it wanted clearly to show that it desired to penalise quite harshly Italy, as well as any other EU member states, for failing to implement Directives.117
It was previously mentioned that, in relation to non-retroactivity and the judgments of the ECJ, there needs to be consideration of:
(a) the ECJ’s preliminary rulings on interpretation; and
(b) the ECJ’s preliminary rulings on validity.
The above discussion has concerned the ECJ’s preliminary rulings on interpretation. The ECJ’s preliminary rulings on validity will now be considered.
The ECJ’s preliminary rulings on validity
Article 234 (ex Art 177) EC gives the ECJ jurisdiction not only in relation to ‘interpretation’ of the Treaty and acts of the EU institutions, but also in relation to the ‘validity’ of acts of the EU institutions. The validity of EU laws can be challenged either under Art 230 (ex Art 173) EC—an action for annulment)[118] or under Art 234 (ex Art 177) EC—a preliminary ruling as to validity. Consequently, before analysing the Article 234 (ex Art 177) EC preliminary rulings as to validity, it is first necessary to consider the position regarding Art 230 (ex Art 173) EC actions for annulment.
Actions for annulment are brought under Art 230 (ex Art 173) EC. However, Art 231 (ex Art 174) EC and Art 233 (ex Art 176) EC are also relevant, particularly the second paragraph of Art 231 (ex Art 174) EC which provides that, in the case of a Regulation, the ECJ ‘shall if it considers it necessary state which of the effects of the Regulation which it has declared void be considered as definitive’. In other words, normally a ruling of annulment applies ad initio but, if it is a Regulation which is being annulled, the ECJ can impose a temporal limitation in its judgment for the purpose of preserving legal certainty. On a number of occasions, the ECJ has utilised this power.[119] In fact, in the interests of maintaining legal certainty, the ECJ has even, in some instances, gone so far as to declare that the effects of an annulled act should continue in force until the adoption of new legislation.[120]
An Article 234 (ex Art 177) EC preliminary ruling declaring an EU act invalid is like an action for annulment under Art 230 (ex Art 173) EC in that, generally, it also has retrospective effect.[121] In addition, even though the Treaty does not make any provision for the imposition of temporal limitations in its Article 234 (ex Art 177) EC preliminary rulings, the ECJ has held, in such cases as Roquette Frères[122] and Pinna,[123] that the ECJ can, when making a declaration of invalidity in the context of an Article 234 (ex Art 177) EC preliminary ruling, ‘apply by analogy the second paragraph of Article 174 (now 231) of the Treaty’.[124] This is ‘for the same reasons of legal certainty as those which form the basis of that provision’.[125] In other words, the second paragraph of Article 231 (ex Art 174) EC enables the ECJ to impose a temporal limitation both in its judgments annulling an act under Art 230 (ex Art 173) EC and in its declaration of invalidity in Art 234 (ex Art 177) EC preliminary references.
One of the cases in which the ECJ discussed the imposition of temporal limitations in its judgments concerning invalidity was Lomas & Others v United Kingdom.[126] In that case, the legality of an agricultural clawback was in issue. The common organisation of the market in relation to sheep meat provided for the payment of premiums on sheep. If the sheep were subsequently exported, an amount equal to the premium (the clawback) had to be repaid. The ECJ held that the operation of this system was in breach of EU law. Essentially this was because Art 4(1) of Commission Regulation 1633/84 was invalid in as much as—by providing for the charging, by way of clawback, of an amount which in most cases was not exactly equal to that of the slaughter premium actually granted—the Commission had exceeded the power conferred on it by Art 9(3) of Regulation 1837/80.[127] In relation to a question to it on the temporal effects of its judgment, the ECJ referred to its case law and stated that it could limit the temporal effect of a finding that an EU measure was invalid on the basis of ‘overriding considerations of legal certainty involving all the interests at stake in the cases concerned’.[128] In considering whether such criteria were met in Lomas & Others v United Kingdom, the ECJ held that to permit the invalidity of the illegal Regulation to be relied upon in relation to past situations would ‘give rise to significant financial consequences and serious organisational difficulties as a result of the reopening of accounts long since closed and the need for the clawback to be recalculated in respect of the past’.[129] Therefore, in the view of the ECJ, there were overriding considerations of legal certainty and these prevented the effects of the invalid provisions of the Regulation from being called into question. [130] An exception was, however, made in favour of those persons who had already instituted legal proceedings.[131]
The ECJ has resorted to the imposition of temporal limitations in its Article 234 (ex Art 177) EC preliminary rulings in only a very small number of cases. Normally, the ECJ’s preliminary rulings, both in relation to interpretation and validity, apply retrospectively. Furthermore, when the ECJ does impose a temporal limitation, it is obviously endeavouring to maintain legal certainty by protecting persons who have been relying on previous interpretations of EU law against sudden changes in that interpretation. The ECJ does not impose a temporal limitation without any good reason. In every case where it does impose a temporal limitation, the ECJ needs to be convinced that there are indeed justifying ‘overriding considerations of legal certainty’.
From the above, the writer argues, it can be seen the EU takes a mature and sophisticated approach to the concept of legal non-retrospectivity. In its legal order, the EU has not only recognised as important both the main principle of legal certainty and the sub-concept of non-retrospectivity, it has also clearly identified the nature of non-retrospectivity and formulated rules that apply when issues concerning non-retrospectivity arise. Thus, provided they follow the established guidelines and ground-rules concerning same, international businesses contemplating doing business with or within the EU do not have to fear that any such business transaction will be unexpectedly or unfairly prejudiced by EU legislation and/or acts of the EU institutions which might be made to apply retrospectively.
[1] LLM (Advanced) (UQ), SJD (UTS), PhD (UQ), Lecturer in Law, University of Southern Queensland, Toowoomba. The author is genuinely grateful to Professor Gabriel Moens and the TC Beirne School of Law at the University of Queensland for having been given the opportunity, during recent years, to give various visiting lectures in order to present ideas on the principle of legal certainty and to gain constructive and useful feedback. The author accepts sole responsibility for the opinions and views expressed herein.
[2] See, eg, the EU’s publication, The European Union and the World, March 2001, available at www.ecdel.org.au/eu_global_player (28 June 2002).
[3] The EU’s Single Market was—at least in theory—completed on 31 December 1992. This was achieved following the signing of the Single European Act (SEA) on 17 February 1987. Subsequently, there has been the introduction of a single currency (the euro). As from January 1 2002, 12 European countries have given up their national currency forever and adopted a common currency: the euro. The new euro banknotes and coins circulated alongside the respective national currencies during a changeover period, which varied slightly from country to country. On 1 March 2002, however, it became sole legal tender throughout the euro zone.
[4] Source: Eurostat. Its website is at: http://europa.eu.int/comm/eurostat.
[5] The EFTA countries are Norway, Iceland, Liechtenstein and Switzerland.
[6] See fn 3.
[7] Many of these countries are already linked to the EU by ‘Europe Agreements’ which provide for free trade in industrial products as well as economic co-operation in a range of areas.
[8] Source: European Commission, The European Union and World Trade, 1995, Brussels: Office for Official Publications of the European Communities.
[9] By this, it is meant that the EU (as such) is becoming an important world power in its own right (as distinct from the world power importance of individual Member States such as France, Germany and the United Kingdom). In this regard, see also the EU publication, op cit, fn 2.
[10] Thurow, L, Head to Head: The Coming Economic Battle Among Japan, Europe and America, 1992, New York: William Morrow and Company.
[11] This occurred with the coming into force of the Treaty on European Union (TEU). 12 Case 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1.
[13] Case 294/83 Partie Ecologiste ‘Les Verts’ v Parliament [1986] ECR 1339. See also the Opinion of Advocate General Lagrange in Case 8/55 Fédération Charbonnière de Belgique v High Authority [1954– 56] ECR 245 at 277.
[14] For further information on this aspect, see, eg, St JN T Bates, ‘European Community legislation before the House of Commons’ (1991) 12 Statute Law Review 109.
[15] Case 6/64 Costa v ENEL [1964] ECR 585.
[16] These agreements range from association treaties and complex trade and co-operation agreements to more simple sectoral trade agreements. A further category of written EU law, in addition to those mentioned, consists of the Conventions between the EU member states distinct from, but concluded within the context of, the founding Treaties (eg, the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters).
[17] The general principles of EU law are those which the ECJ has derived both from the treaties and from the legal principles recognised in the national legal systems of the EU member states. In certain circumstances, the general principles of EU law are treated as being superior even to any of the forms of legislation (eg, Regulations, Directives and Decisions) defined in the treaties. For further information in this regard, see, eg, Toth, AG, The Oxford Encyclopaedia of European Community Law (Volume 1 Institutional Law), 1990, Oxford: Clarendon, 277.
[18] Lord Lloyd and Freeman, MDA, Lloyd’s Introduction to Jurisprudence, 5th edn, 1985, London: Stevens & Sons, at 1106 (7th edn, 2001, London: Sweet & Maxwell).
[19] Ibid.
[20] In some writings, the term ‘acquired rights’ is used instead of ‘vested rights’. However, the two terms are generally synonymous.
[21] Even in England which, as mentioned, has no general principle of legal certainty, there has been a clear recognition of, eg, the principle of protecting legitimate expectations. See, eg, Schmidt v Secretary of State for Home Affairs [1969] 2 Ch 149 at 170–71; Attorney General of Hong Kong v Ng Yuen Shiu [1983] UKPC 2; [1983] 2 AC 629; and Forsyth, CF, ‘The provenance and protection of legitimate expectations’ (1988) 47 Cambridge Law Journal 238.
[22] Case 70/83 Kloppenburg v Finanzamt Leer [1984] ECR 1075 at 1086. See also Joined Cases 212– 2177 80 Amministrazione delie Finanze dello Stato v Sri Meridionale Industria Salumi and Others [1981] EUECJ R-217/80; [1981] ECR 2735 at para 10.
[23] Case 169/80 Administration des Douanes v Societe Anonyme Gondrand Frères and Societe Anonyme Garancini [1981] ECR 1931 at 1942.
[24] Case 32/79 Commission v United Kingdom [1980] ECR 2445 at para 46.
[25] Case 66/74 Alfonso Farrauto v Bau-Berufsgenossenschaft [1975] ECR 157.
[26] Ibid at 162.
[27] See, eg, Case 10/78 Belbouab v Bundesknappschaft [1978] ECR 1915.
[28] Case C-336/95 Pedro Burdalo Trevejo and Others v Fondo Garantía Salarial [1997] ECR 1–2115.
[29] Ibid at para 14.
[30] Ibid at paras 15 and 16.
[31] Article 254(1) (ex Art 191(1)) EC.
[32] This is not an uncommon procedure. In many countries, publication in the Government Gazette (or similar) is deemed to be notice to all and sundry of the coming into force of a particular law.
[33] Case 99/78 Decker v Hauptzollamt Landau [1979] ECR 101 at 111; Case 258/80 SPA Metallurgica Rumi v Commission [1982] ECR 487 at 503; Case 276/80 Padana v Commission [1982] ECR 517 at 525; Case 84/81 Staple Dairy Products Limited v Intervention Board for Agricultural Produce [1982] ECR 1763 at 1777; Case 108/81 Amylum v Council [1982] ECR 3107 at 3178; Case 114/ 81 Tunnel Refineries v Council [1982] ECR 3189 at 3206; Case 224/82 Meiko-Konservenfabrik v Germany [1983] ECR 2539 at 2548–49.
[34] Case 98/78 Racke v Hauptzollamt Mainz [1979] ECR 69 at 84.
[35] Case 17/67 Neumann v Hauptzollamt Hof/Saale [1967] ECR 441 at 456.
[36] Case 78/74 Deuka (No 1) [1975] ECR 421 at 433–34; Case 5/75 Deuka (No 2) [1975] ECR 759. 37 Case 17/67 Neumann v Hauptzollamt Hof/Saale [1967] ECR 441. See also Case 57/72 Westzucker
GmbH v Einfuhr und Vorratsstelle fur Zucker [1973] ECR 321.
[38] Eg, to enforce rights.
[39] Eg, by the Commission.
[40] In this regard, see, eg, Case 3/59 Germany v High Authority [1960] ECR 53; Case 48/69 ICI v Commission [1972] ECR 619.
[41] In some writings, ‘acquired rights’ is used rather than ‘vested rights’—however, these terms are synonymous.
[42] Joined Cases 7/56 and 3–7/57 Algera v Common Assembly [1957] ECR 39; Case 54/77 Herpels v Commission [1978] ECR 585; Case 14/81 Alpha Steel Ltd v Commission [1982] ECR 749.
[43] Joined Cases 7/56 and 3–7/57 Algera v Common Assembly [1957] ECR 39.
[44] Joined Cases 42 and 49/59 SNUPAT v High Authority [1961] ECR 53 at 87.
[45] Case 111/63 Lemmerz-Werke GmbH v High Authority [1965] ECR 677 at 690.
[46] Case 54/77 Herpels v Commission [1978] ECR 585 at 599. See also Joined Cases 42 and 49/59 SNUPAT v High Authority [1961] ECR 53; Case 14/61 Hoogovens v High Authority [1962] ECR
[253] . 47 Case 15/85 Consorzio Cooperative d’Abruzzo v Commission [1987] ECR 1005. 48 Sharpston, E, ‘Legitimate expectations and economic reality’ (1990) 15 European Law Review 103
at 105.
[49] See, eg, Case 78/77 Lührs v Hauptzollamt Hamburg-Jonas [1978] ECR 169; Case 52/81 Faust v Commission [1982] ECR 3745; Case 245/81 Edeka v Germany [1982] ECR 2745; Case T-521/93 Atlanta AG and Others v Council and Commission [1996] ECR II–1707.
[50] Schwarze, J, European Administrative Law, 1992, London: Sweet & Maxwell, 1131. 51 Craig, PP, ‘Substantive legitimate expectations in domestic and Community law’ (1996) 55 Cambridge Law Journal 289 at 307.
[52] Case 23/68 Klomp v Inspecktie der Belastingen [1969] ECR 43 at 50.
[53] Case 13/61 Kledingverkoopbedrijf De Geus en Uitdenbogerd v Robert Bosch GmbH [1962] ECR
[45] . 54 Ibid at 52. 55 See, eg, Case 110/77 Mulcahy v Commission [1978] ECR 1287; Case 432/85 Souna [1987] ECR
[2229] ; Case 148/73 Louwage [1974] ECR 81; Joined Cases 219 to 228, 230 to 235, 237, 238 and 242/80 Andre and Others v Commission and Council [1984] ECR 165; Joined Cases 87, 130/77, 22/83, 9 and 10/84 Salerno v Commission and Council [1985] ECR 2523.
[56] Mulcahy, ibid. See also Case C-137/92P Commission v BASF AG [1994] ECR I–2555.
[57] Article 254 (ex Art 191) EC.
[58] Case 88/76 Société pour l’Exportation des Sucres v Commission [1977] ECR 709 at 726. In the Société pour l’Exportation des Sucres case, a Regulation was involved which provided that it was to enter into force on 1 July 1976. As the Regulation was published on 2 July 1976, the ECJ rejected accidental retroactivity and ruled that it could only properly be applied as from 2 July 1976, since there were no factors capable of attributing to it retroactive effect.
[59] See, eg, Case 17/67 Neumann v Hauptzollamt Hof/Saale [1967] ECR 441; also Case 57/72 Westzucker GmbH v Einfuhr und Vorratsstelle für Zucker [1973] ECR 321.
[60] Case 30/71 Siemers v Hauptzollamt Bad Reichenhall [1971] ECR 919 at 928.
[61] Case 98/78 Racke v Hauptzollamt Mainz [1979] ECR 69 at para 20.
[62] Joined Cases C-260/91 and C-261/91 Divesinte SA and Another v Adminstracion Principal de Aduanas e Impuestos Especiales de La Junquera [1993] ECR I–1885.
63 Ibid at para 9. 64 Ibid at para 10. 65 Ibid at para 12. 66 Ibid at para 13.
[67] Ibid at paras 14 and 15.
[68] Joined Cases 212 to 217/80 Amministrazione delle Finanze dello Stato v Srl Meridionale Industria
Salumi and Others [1981] EUECJ R-217/80; [1981] ECR 2735 at para 9.
[69] Ibid at para 10.
[70] Ibid at para 2.
[71] Ibid at para 3.
[72] Case 113/75 Frecassetti v Amministrazione delle Finanze dello Stato [1976] ECR 983.
[73] Joined Cases 212 to 217/80 Amministrazione delle Finanze dello Stato v Sri Méridionale Industria Salumi and Others [1981] EUECJ R-217/80; [1981] ECR 2735 at paras 9 and 12.
[74] Ibid at para 12.
[75] Case 183/73 Osram GmbH v Oberfinanzdirektion Frankfurt [1974] ECR 477.
[76] Ibid.
[77] Ibid at para 8.
[78] Case 158/78 Biegi v Hauptzollamt Bochum [1979] ECR 1103 at para 11.
[79] Article 230 (ex Art 173) EC.
[80] Article 234 (ex Art 177) EC.
[81] Ibid.
[82] Case 61/79 Amministrazione délie Finanze dello State v Denkavit Italiana [1980] ECR 1205 at 1223, citing Case 43/75 Defrenne v Sabena (No 2) [1976] ECR 455 at 481 where the ECJ referring to ‘important considerations of legal certainty’ restricted the application of its judgment establishing the direct effect of Art 141 (ex Art 119) EC to future cases.
[83] Case 45/86 Commission v Council [1987] ECR 1493 at 1522. See also the second paragraph of Art 231 (ex Art 174) EC.
[84] Joined Cases 66, 127 and 128/79 Amministrazione delle Finanze v Salumi [1980] ECR 1237 at para 9.
[85] Joined Cases 66, 127 and 128/79 Amministrazione délie Finanze v Salumi [1980] ECR 1237 at para 10.
[86] Case 43/75 Defrenne v Sabena (No 2) [1976] ECR 455.
[87] See, eg, Kapteyn, PJG and VerLoren van Themaat, P, Introduction to the Law of the European Communities, 1973, London: Sweet & Maxwell, 296.
[88] Case 43/75 Defrenne v Sabena (No 2) [1976] ECR 455 at paras 74 and 75.
[89] Case 811/79 Amministmzione delle Finanze dello Stato v Ariete SpA [1980] ECR 2545.
[90] Cases 66, 127 and 128/79 Amministrazione delle Finanze dello Stato v Salumi [1980] ECR 1237.
[91] Ibid at para 11.
[92] Case 24/86 Blaizot v Universite de Liege and Others [1988] ECR 379. For a very good commentary
on this case, see de Lacey, P and Moens, GA, The Decline of the University, 1990, Tahmoor: Law
Press, 29. 93 Case 293/83 Gravier v City of Liège [1985] ECR 593. 94 Case 24/86 Blaizot v Universite de Liège and Others [1988] ECR 379 at para 26. 95 Ibid. 96 Ibid at para 28. Emphasis added. 97 Ibid.
[98] Emphasis added.
[99] Ibid at para 31.
[100] Ibid at paras 32 and 33. Emphasis added.
[101] Ibid at para 34. 102 Ibid at para 35. 103 See, eg, Case C-262/88 Barber v Guardian Royal Exchange Assurance Group [1990] ECR 1–1889;
Case C-163/90 Administration des Douanes et Droits Indirects v Leopold Legros and Others [1992] ECR I–4625; Case C-415/93 Union Royale Belge des Sociétés de Football Association v Bosman [1995] ECR I–4921.
[104] Joined Cases C-485/93 and C-486/93 Simitzi v Kos [1995] ECR I-2655.
[105] Opinion of Advocate General Tesauro (para 17) in Joined Cases C-485/93 and C-486/93 Simitzi v Kos [1995] ECR I–2655. Emphasis added.
[106] Case C-200/90 Dansk Denkavit and Poulsen v Skatteministeriet [1992] ECR I–2217. 107 Joined Cases C-367/93 to C-377/93 FG Roders BV and Others v Inspecteur der Invoerrechten en
Accijnzen [1995] ECR I–2229. 108 CaseC-137/94 The Queen v Secretary of State for Health ex p Richardson [1994] ECR I–3407. 109 Case 69/80 Worringham and Humphreys v Lloyds Bank Ltd [1981] ECR 767. 110 Joined Cases C-6 and 9/90 Francovich v Italy [1991] ECR I–5357. 111 Joined Cases C-363/93, C-407/93, C-408/93, C-409/93, C-410/93 and C-411/93 René Lancry SA
v Direction Générale des Douanes [1994] ECR I–3957. 112 Case C-137/94 The Queen v Secretary of State for Health ex p Richardson [1994] ECR I–3407. 113 Case 69/80 Worringham and Humphreys v Lloyds Bank Ltd [1981] ECR 767. 114 Ibid at para 30. 115 Ibid at para 32.
[116] Joined Cases C-6 and 9/90 Francovich v Italy [1991] ECR I-5357.
[117] See, eg, Carmen Plaza Martin, ‘Furthering the effectiveness of EC directives and the judicial protection of individual rights thereunder’ (1994) 43 International and Comparative Law Quarterly 26 at 46.
[118] Article 241 (ex Art 184) EC (‘the plea of illegality’) is an adjunct to Art 230 (ex Art 173) EC. However, no action can be brought directly against a Regulation under Art 241 (ex Art 184) EC.
[119] Case 34/86 Council v Parliament [1986] ECR 2155; Case 45/86 Commission v Council [1987] ECR 1493; Case 51/87 Commission v Council [1988] ECR 5459.
[120] Case 275/87 Commission v Council [1989] ECR 259. See also Case 81/72 Commission v Council [1973] ECR 575; Case 59/81 Commission v Council [1982] ECR 3329; Case 264/82 Timex v Council and Commission [1985] ECR 849; Case C-295/90 European Parliament v Council [1992] ECR I4193; Case C-41/95 Council v Parliament [1995] ECR 1–4411.
[121] Case 130/79 Express Dairy Foods v Intervention Board [1980] ECR 1887.
[122] Case 145/79 SA Roquette Frères v French State—Customs Administration [1980] ECR 2917.
[123] Case 41/84 Pinna v Caisse d’allocations familiales de la Savoie [1986] ECR 1.
[124] Case 145/79 SA Roquette Frères v French State—Customs Administration [1980] ECR 2917 at para
[52] . Reference to new treaty section added. 125 Ibid. 126 Joined Cases C-38/90 and C-151/90 Thomas Edward Lomas and
Others v United Kingdom [1992]
ECR I–781.
[127] The ECJ additionally held that Art 4(2) of Regulation 1633/84 was also invalid in so far as it required
a security to be lodged in order to ensure that the amount due pursuant to Art 4(1) was charged. 128 Ibid at para 24. Emphasis added. 129 Ibid at para 27. 130 Ibid at para 28. 131 Ibid at para 29.
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