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Cornelia Koch[*]
Many scholars acknowledge that the principles of supremacy and direct effect of European Community law are the vital foundations of Community law as a supranational legal system.[1] Moreover, the European Court of Justice has described the two concepts as ‘the essential characteristics of the Community legal order.’[2] It is therefore surprising that so far little attention has been given to the question whether and if so how the two concepts are related. This paper endeavours to shed light on this question. It proposes that one aspect of the relationship between the two doctrines is that the doctrine of supremacy is a condition precedent[3] for the doctrine of direct effect.
Given the significance of the two principles it is interesting to note that both have been judicially created by the European Court of Justice and are not laid down in the treaties founding the European Community. Direct effect and supremacy determine the status of Community law in relation to member state law. In a nutshell, direct effect of Community law means that citizens are able to enforce their rights deriving from Community law in member state courts. The doctrine of supremacy of Community law ensures that where Community law and member state law are incompatible, the former will prevail.
In order to demonstrate that supremacy is a condition precedent for direct effect, an analysis of the two doctrines will be conducted in the first part of this paper. This will include their creation by the European Court of Justice, their scope of operation and a discussion of the relevant case law. Subsequently, the interrelationship
between the two concepts will be examined. It will be shown that it was not coincidental that the European Court of Justice pronounced the principles of direct effect and supremacy in two consecutive years, but that the two concepts are logically connected. The doctrine of supremacy is a condition precedent for the doctrine of direct effect.
Ordinary international treaties[4] can only have an effect in the domestic legal order of a contracting state if the signatory performs some act to introduce the treaty contents into its legal order.[5] The process of turning treaty law into domestic law is either achieved by adoption or transformation. Adoption means that the treaty provisions as such are declared operative in the municipal order, while in the case of transformation treaty law is transformed into domestic law. The former occurs in countries that take a monist approach to international law. They regard international law as part of their national legal system. The second approach is taken in dualist countries where international law is categorised as separate from the domestic legal order. In both cases citizens of signatories cannot rely on treaty provisions in proceedings in national courts unless the treaty was first introduced into the domestic legal system.[6]
In the European Community the situation is different because the European Court of Justice has created the doctrine of direct effect of Community law according to which provisions of Community law are capable of producing legal effects in the member states, in the sense of conferring rights and imposing obligations upon individuals which are enforceable in national courts.7 The doctrine was created in the Van Gend en Loos case,8 which Hartley regards as ‘one of the most important judgments ever handed down by the European Court’.[9] In this case the following question was referred to the Court:[10]
whether Article 12 of the EEC Treaty has direct application within the territory of a member state, in other words, whether nationals of such a State can, on the basis of the Article in question, lay claim to individual rights which the courts must protect.[11]
The claimant in the national proceedings was a Dutch company which had imported an aqueous emulsion of ureaformaldehyde, a product used in the manufacture of glue, from Germany. When the EEC Treaty came into force on 1 January 1958 the product’s classification under Dutch law attracted an import duty of 3%. On 1 March 1960 the Dutch authorities reclassified the product allegedly on the basis of new findings about the product’s composition. Under the new classification the product attracted an import duty of 8%. Van Gend en Loos argued that this imposition of higher customs duties was contrary to Article 12 EEC Treaty which provided as follows:
member states shall refrain from introducing between themselves any new customs duties on imports or exports or any charges having equivalent effect, and from increasing those which they already apply in their trade with each other.12
It must be noted that the provision was addressed to the member states and did not expressly grant any rights to individuals to import goods free from any duty imposed after the establishment of the EC; nor did it state explicitly that any such duty would be invalid. The European Court was faced with a situation where a Dutch company sought to invoke Community law in proceedings against the Dutch customs authorities in a Dutch tribunal. It had to decide whether Community law gave direct protection to individuals in national courts.
Contrary to Advocate General Romer,[13] the European Court took the view that a provision is not prevented from having direct effect merely because it is addressed to member states and does not expressly confer rights on private individuals.[14] It stated that whether provisions of the EEC Treaty were capable of producing direct effect depended on the ‘spirit, the general scheme and the wording of those provisions’.[15] The Court pointed out that the EEC Treaty amounted to more than a set of mutual obligations between the contracting states because its objective was to establish a Common Market of direct concern to the private citizen. In contrast to ordinary treaties, the EEC Treaty set up a Community which constituted:
a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only member states but also their nationals. Independently of the legislation of member states, Community law therefore not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage. These rights arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon the member states and upon the institutions of the Community.16
With regard to the general scheme and wording of Article 12 the Court observed that it contained a ‘clear and unconditional prohibition’ which was ‘not a positive but a negative obligation’ in that it required member states to refrain from introducing new customs duties and from increasing existing ones. This obligation was not qualified by any reservation and its implementation was not conditional upon any legislative measure to be enacted under national law. Therefore, the Court concluded that ‘the very nature of this prohibition makes it ideally adapted to produce direct effects in the legal relationship between member states and their subjects’ in the sense of ‘creating individual rights which national courts must protect’.[17] These rights were, according to the Court, a necessary counterpart or corollary of the obligation imposed by Article 12 on the member states. As a result, where member states introduced or increased customs duties contrary to Article 12, any interested individual might challenge such duties before the competent national courts, which were required to give effect to the Treaty.
In the subsequent case of Simmenthal[18] the Court explained the full implications of the concept of direct effect. It stated:
[Direct effect] means that rules of Community law must be fully and uniformly applied in all the member states from the date of their entry into force and for so long as they continue in force. These provisions are therefore a direct source of rights and duties for all those affected thereby, whether member states or individuals, who are parties to legal relationships under Community law. This consequence also concerns any national court whose task it is as an organ of a member state to protect, in a case within its jurisdiction, the rights conferred upon individuals by Community law.19
Toth argues that the doctrine of direct effect, as formulated in the above decisions and refined in a number of subsequent cases, is one of the two essential foundations of Community law as a supranational legal system, supremacy of Community law being the second. According to Toth it is of such great importance because:
This analysis is very useful as it shows clearly that the doctrine of direct effect is part of the basis on which the Community legal system is built. Had the European Court of Justice not created this doctrine, the European Community would most likely have remained an organisation consisting of European states similar to other international alliances. By creating the doctrine of direct effect the Court of Justice paved the way for a fast and effective European integration and harmonisation of the laws. This has allowed the Community to grow into a closely connected union of European states within only 50 years. Giving Community citizens the possibility to enforce Community law in their domestic courts was a very effective tool to force member states to comply with Community law and to do so in an expedient manner as the Court recognised in Van Gend en Loos. It stated that ‘the vigilance of individuals interested in protecting their rights creates an effective control … to the diligence of the Commission and the member states’.[22]
Only a considerably small number of EC Treaty provisions have without any doubt been intended to create a direct relationship between Community law and the individual[23] or call expressly upon national authorities, including courts, to cooperate with the Community institutions in the application and enforcement of Community law.24 The determination whether a Treaty provision has direct effect is therefore mainly a matter of Treaty interpretation. This task falls within the exclusive jurisdiction of the European Court of Justice[25] whose decision on the matter must be regarded as definitive.[26] The judgment of the Court establishing direct effect has retroactive application in the sense that the provision to which it relates must be regarded as having produced direct effects from the time of its coming into force. The Court may restrict this retroactive effect only in exceptional circumstances.[27]
In Van Gend en Loos the test for direct effect was determined as follows:
The wording of [a provision of Community law] contains a clear and unconditional prohibition which is not a positive but a negative obligation. This obligation, moreover, is not qualified by any reservation on the part of states which would make its implementation conditional upon a positive legislative measure enacted under national law.[28]
This formula suggests that only provisions imposing a negative obligation can have direct effect. However, the Court decided in subsequent cases that a clear and unconditional provision could be directly effective whether or not it involved a negative or a positive obligation, provided it did not require the taking of any measure either by the institutions of the Community or by the member states.[29] Therefore, to produce direct effect a provision of the EC Treaty must fulfil three requirements: it has to be sufficiently clear and precise, not subject to any reservation or condition and not require the intervention of any further act on the part of either the Community institutions or the member states.30
The early cases on direct effect dealt with the protection of private individuals against measures of member states or their institutions. This is called vertical direct effect.[31] The European Court of Justice extended the doctrine of direct effect to operate also between private individuals. In that case a provision is said to have horizontal direct effect.[32]
In addition to Treaty articles the European Court of Justice has held that all of the binding acts of the Community institutions or any particular provision of such acts can produce direct effect if they satisfy the criteria which the Court established in respect of the EC Treaty. This comprises Community regulations, directives and decisions.[33] Furthermore, the Court decided that international treaties concluded by the Community with third parties can also produce direct effect.[34]
A distinction must be made between the concepts of direct effect and direct applicability. While the EC Treaty is silent on the former term, it contains the latter in Article 249 (ex Article 189) EC Treaty which reads:
A regulation shall have general application. It shall be binding in its entirety and directly applicable in all member states.[35]
From this wording the question arises whether ‘directly applicable’ has the same meaning as ‘directly effective’. Unfortunately, the European Court of Justice has never clarified this point and uses the two terms interchangeably.[36] If they were indeed the same, a crucial problem would arise: it would be certain that the intention of the framers of the Treaties was that only regulations should have direct effect, as they did not make a provision similar to Article 249 (ex Article 189) for any other type of Community instrument. Therefore, the doctrine of direct effect as created by the European Court of Justice would be clearly inconsistent with the Treaties. Although the Court does not seem to pay much attention to the problem, legal writers have found a solution to it and defined direct applicability differently from direct effect.[37] The following distinction is widely accepted in the literature today:[38] a Community norm is directly applicable if it is incorporated into the legal systems of the member states upon its enactment by the relevant Community authorities. That means that in order to become part of the domestic law of the member states no further act of incorporation on behalf of the states is needed. Accordingly, all regulations are directly applicable. On the other hand, a provision of Community law is directly effective if it fulfils the Van Gend en Loos test. Therefore, the fact that a regulation is directly applicable does not automatically make it directly effective. Community regulations are only directly effective if their wording is clear and precise, they are unconditional and no further act on behalf of the Community institutions or member states is necessary for their coming into force. If they fulfil these criteria they can be invoked vertically or horizontally.
In summary, the principle that Community law has direct effect is a creation of the European Court of Justice as the Treaties are silent on the issue. If a legal provision is directly effective it grants individuals rights which must be upheld by the national courts.[39] The doctrine of direct effect can relate to Treaty articles, regulations, directives, decisions and provisions of international agreements to which the Community is a party. A provision of Community law is directly effective if it is sufficiently clear and precise, unconditional and leaves no room for the exercise of discretion in the implementation by the member states or Community institutions.
Direct effect must be distinguished from direct applicability. The latter concerns the way in which a regulation comes into operation within the member states while the former describes the effects of a Community provision in the national legal systems after it has come into operation therein.
The extended application by the Court of Justice of the principle of direct effect, together with the wide scope of the EC Treaty, covering a number of areas normally reserved to national law alone, have led inevitably to a situation of conflict between national and EC law.[40] This conflict arises frequently where a directly effective provision of Community law is incompatible with the internal laws of a member State. The EC Treaty is silent on the question of priorities between Community law and national law. In ordinary international law the constitutional rules of a country determine whether international agreements can take precedence over national law.41 The constitutions of the EU member states have very different rules relating to this area.[42] The European Court of Justice has developed its own priority rule, the
doctrine of supremacy of Community law.[43] For Toth this doctrine is, besides the doctrine of direct effect, the second of the ‘two essential foundations of Community law as a supranational legal system.’[44]
The Court made first mention of the principle of supremacy of Community law as an biter dictum in Van Gend en Loos,[45] where it stipulated that ‘the Community constitutes a new legal order in international law, for whose benefit the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only the member states but also their nationals.’[46] One year later Costa v ENEL,[47] the leading case on supremacy of Community law, was decided. The Court stated that supremacy of Community law was a general principle or doctrine which followed from the very nature of Community law. Mr Costa was a shareholder of Edisonvolta, a firm which had been affected by the nationalisation of the production and distribution of electric energy. In accordance with its nationalisation law, the Italian government had transferred the property of all electricity undertakings to the state owned electricity company (ENEL). Mr Costa, having refused to pay an electricity bill issued to him, was summoned before a Court in Milan. In his defence, he submitted that the nationalisation law was contrary to a number of EC Treaty provisions. The matter was referred for preliminary opinion to the Italian Constitutional Court and simultaneously to the European Court of Justice. The former was of the view that, as the EC Treaty had been ratified by an ordinary law, the provisions of a later conflicting law (the nationalisation legislation) took precedence over the Treaty. As foreshadowed in Van Gend en Loos,[48] the European Court of Justice was of the opposite opinion:
By contrast with ordinary international treaties, the EEC Treaty has created its own legal system which, on the entry into force of the Treaty, became an integral part of the legal systems of the member states and which their courts are bound to apply.
By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the states to the Community, the member states have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves.
The integration into the laws of each member State of provisions which derive from the Community, and more generally the terms and the spirit of the Treaty, make it impossible for the states, as a corollary, to accord precedence to a unilateral and subsequent measure over a legal system accepted by them on a basis of reciprocity. The executive force of Community law cannot vary from one State to another in deference to subsequent domestic laws, without jeopardising the attainment of the objectives of the Treaty set out in Article 5(2) [now Article 10(2)][49] and giving rise to the discrimination prohibited by Article 7 [now Article 12].[50]
The obligations undertaken under the Treaty establishing the Community would not be unconditional, but merely contingent, if they could be called in question by subsequent legislative acts of the signatories. […]
It follows from all these observations that the law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question.
The transfer by the states from their domestic legal systems to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights, against which a subsequent unilateral act incompatible with the concept of the Community cannot prevail.[51]
The quotation demonstrates that the European Court of Justice derives the supremacy of Community law from the following factors: the special and original nature of the EC Treaty as an independent source of law and of the whole legal system created by it; the acceptance of that legal system by all the member states on the basis of reciprocity; the consequent permanent limitation of national sovereignty or a transfer of powers to the Community; the threat which incompatible unilateral national measures would present to the uniform application, integrity and ultimately to the very survival of Community law.[52]
In subsequent cases the European Court of Justice confirmed the doctrine of supremacy and explained its full scope. Internationale Handelsgesellschaft[53] dealt with a conflict between a Community regulation and fundamental rights guaranteed by the German constitution. The claimant claimed the regulation infringed the principles of freedom of action, disposition, economic liberty and of proportionality which are enshrined in Articles 2(1) and 14 of the German Constitution. In the plaintiff’s submission, the regulation should be nullified because in German law any ordinary law that is in breach of the constitution is invalid. The European Court disagreed. In the strongest terms it ruled that the legality of a Community act cannot be judged in the light of national law:
Recourse to the legal rules or concepts of national law in order to judge the validity of measures adopted by the institutions of the Community would have an adverse effect on the uniformity and efficacy of Community law. The validity of such measures can only be judged in the light of Community law. In fact, the law stemming from the Treaty, an independent source of law, cannot, because of its very nature, be overridden by rules of national law, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called in question. Therefore, the validity of a Community measure or its effect within a member State cannot be affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of that State or the principles of a national constitutional structure.[54]
It must be noted that the Court, while upholding supremacy ‘at all costs’, acknowledged the importance of fundamental rights and it went on to say that respect for such rights was one of the principal aims of the Community and as such part of the Community’s own, albeit unwritten, law.[55]
The case of Simmenthal[56] raised two issues relating to supremacy: first, whether a domestic law should take precedence over Community law because it was later in time and, secondly, challenging the ruling in Internationale Handelsgesellschaft,[57] whether Community law should prevail over principles of national constitutional law. The facts of the case were as follows: Simmenthal imported beef from France to Italy and had to pay a fee for a public health inspection according to an Italian law passed in 1970. It was submitted that this law was contrary to the EC Treaty and two Community regulations passed in 1964 and 1968. The Italian authorities raised in their defence, first, that the Italian law had to prevail because it was later in time and, secondly, that, even if the national law conflicted with Community law, the Italian courts nevertheless had to apply it until such time as it had been declared unconstitutional by the Constitutional Court. The second submission was based on the principle that, according to Italian constitutional law, only the Constitutional Court (Corte Costituzionale) has the power to determine the constitutionality of Italian laws and declare an unconstitutional law invalid.
The European Court held, first, that it was the duty of a national court to give full effect to the Community provisions and not to apply any conflicting provisions of national legislation even if they had been adopted subsequently. Secondly, the Court determined that a lower court should not wait for the national law to be set aside by a constitutional court or the legislature of a member State. With regard to the first issue the Court said:
[I]n accordance with the principles of precedence of Community law, the relationship between provisions of the Treaty and directly applicable measures of the institutions on the one hand and the national law of the member states on the other is such that those provisions and measures not only by their entry into force render automatically
inapplicable any conflicting provision of current national law but – in so far as they are an integral part of, and take precedence in, the legal order applicable in the territory of each of the member states – also preclude the valid adoption of new national legislative measures to the extent to which they would be incompatible with Community provisions.
Indeed any recognition that national legislative measures which encroach upon the field within which the Community exercises its legislative power or which are otherwise incompatible with the provisions of Community law had any legal effect would amount to a corresponding denial of the effectiveness of obligations undertaken unconditionally and irrevocably by member states pursuant to the Treaty and would thus imperil the very foundations of the Community.[58] …
It follows from the foregoing that every national court must, in a case within its jurisdiction, apply Community law in its entirety and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it, whether prior or subsequent to the Community rule.[59]
On the second issue the Court stated:
[A] national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provision by legislative or other constitutional means. [60]
The European Court explicitly said that the conflicting national law was inapplicable, not invalid. Therefore, although a national court has to apply Community law, the domestic law remains in existence. In an earlier case the Court had found that this situation might create an ‘ambiguous state of affairs’ which would affect people who sought to rely on Community law.61 Therefore, in the interest of legal certainty, the Court imposed a positive obligation on member states to repeal conflicting national legislation.[62]
The principle of supremacy of Community law applies not only to domestic member state law, but also to obligations undertaken by states towards third countries. The ERTA case[63] concerned a challenge to an international road transport agreement to which the Community was a party. The Court held that once the Community, in implementing a common policy, lays down common rules, member states no longer have the right, individually or collectively, to enter into contracts with non-member states which impose obligations affecting these common rules. Where the Community concludes a treaty in pursuance of a common policy, this excludes the possibility of a concurrent authority on the part of the member states.[64]
This means that where a state attempts to exercise concurrent authority it will be overridden to the extent that it conflicts with Community law. The only exception to this rule is where a member state is under an obligation stemming from an international agreement which the member state has entered into before it became a party to the relevant Community Treaty.[65]
In summary, a provision of Community law always prevails over national law. This rule cannot be found in any of the Treaties but has been proclaimed with great emphasis by the European Court. It applies irrespective of the nature of the Community provision, whether founding Treaty, Community act or agreement with a non-member State, and the nature of the national provision, be it the constitution, a statute or subordinate legislation. It also applies irrespective of whether the Community provision came into force before or after the national provision: in all cases the national provision must give way to Community law.
The proposition that supremacy is a condition precedent for direct effect is based on two findings: first, in the absence of supremacy the creation of the doctrine of direct effect would have resulted in an uneven application of Community law in the member states. This would have been an unacceptable result for the European Community as it would have threatened the Community legal system in its entirety. Secondly, the European Court of Justice did not create the principles of direct effect and supremacy in isolation, but assumed the existence of the supremacy doctrine when creating the principle of direct effect in Van Gend en Loos.[66] The two findings will be discussed in turn.
Direct effect of a Community provision would be futile if it was not accorded a higher status than national law in a domestic court. If a member state court would have to apply the domestic law of its country in preference to Community law an individual litigant would not be protected by the Community provision notwithstanding its direct effect. The principle of direct effect would therefore lack any practical significance.[67]
This argument does, however, not necessarily provide a justification for the creation of a supremacy rule in Community law because the constitutions of the member states have always contained supremacy rules dealing with the status of international law in their domestic legal systems. The crucial question is therefore whether the creation of a Community priority rule was required or whether the domestic supremacy provisions would have been sufficient to render Community law supreme over national law, thus ensuring that litigants could rely on directly effective Community law in national courts. An analysis of the constitutional supremacy rules of the members states reveals that these are not uniform.[68] Some member states take a monist approach to international law,[69] while others have dualist systems.70
In order to answer the question whether a priority rule in Community law was required, the concepts of monism and dualism must be examined in more detail. In a monist state, international treaties are considered to be part of the domestic legal order. Treaty provisions become part of that order by an ‘act of adoption’ in which they are declared operative within the state. The purest form of monism prevails where treaties are directly applicable in national law and have a higher status than national law, including subsequent domestic legislation and even the constitutional rules of the country. In a dualist state, on the other hand, treaties are not regarded as forming part of the domestic law but as part of a different legal order. Therefore, an ‘act of transformation’ of treaty law into national law is necessary for the treaty rules to become operative in the domestic legal system. The act of transformation is some action by the authorities of the state which can have various forms, for example, a parliamentary statute, another legislative instrument, such as a regulation of an administrative body, or an action or decision of a court or tribunal. Because in a dualist system a treaty does not directly become domestic law, but is transformed into domestic law by a domestic act, treaty law will never come into direct conflict with domestic law. If a conflict between the new law which implements the treaty and the law that regulated the relevant area of law before the treaty implementation arises, it will be resolved according to the national rules relating to priority between domestic laws. Therefore, in a dualist state international law can never be supreme over national law. In a monist system, on the other hand, directly applicable treaty law can be conflicting with domestic law and which one prevails depends on the national priority rules between international and national law.[71]
At the time when the European Court of Justice created the doctrine of direct effect,[72] four of the six member states took a monist approach to international law, while the other two had dualist systems.[73] The constitutions of the Netherlands, France, Belgium and Luxembourg created a monist structure and gave supremacy to international treaties which were directly effective. Therefore, directly effective provisions of Community law would have been supreme in these countries independently of whether a Community doctrine of supremacy existed. In contrast, in the dualist member states Italy and Germany international treaties did not have a superior status in comparison to national law. Therefore, national legislation passed later in time than Community rules would have prevailed over Community law in those countries under the doctrine of implied repeal.[74]
As a result of these varying approaches to international law, a case concerning European Community law would have a different outcome depending on whether it was heard in a monist or a dualist state, if no Community rule about supremacy existed. For example, the plaintiff in Van Gend en Loos,75 the case in which the European Court created the doctrine of direct effect, would have been successful in a Dutch, but not in an Italian court. The Dutch court which asked the ECJ for a preliminary ruling relied on a constitution which establishes a truly monist approach to international law. Article 93 of the Dutch constitution provides:
Provisions of treaties and of resolutions by international institutions, which may be binding on all persons by virtue of their contents shall become binding after they have been published.
Article 94 reads as follows:
Statutory regulations in force within the Kingdom shall not be applicable if such application is in conflict with provisions of treaties that are binding on all persons or of resolutions by international institutions.
Therefore, those international provisions which bind not only the state, but also citizens, are directly applicable in the Netherlands and take precedence over national legislation and even the constitution.76 In order to decide a case where the claimant relied on the direct effect of Article 12 EEC Treaty the Dutch court only needed to find out whether that article was ‘binding on all persons by virtue of its contents,’ in other words directly effective. Once the European Court of Justice had positively decided this point it was obvious for the Dutch court that Article 12 EEC Treaty would take precedence over the Dutch customs legislation under Article 94 of the Dutch constitution. Therefore, the claimant would have been able to rely on Article 12 without the aid of a Community doctrine of supremacy.
A claimant in the same situation in Italy, however, would not have been able to rely on Article 12. Although the European Court declared the provision directly effective, an Italian court would nevertheless have been under a constitutional obligation to apply the Italian customs legislation in preference to Community law under the doctrine of implied repeal. This view was confirmed by the Italian Constitutional Court in its preliminary ruling in Costa v ENEL.[77] Therefore, in the absence of a Community doctrine of supremacy, the claimant’s rights would not have been protected although the Treaty article relied on had direct effect.
The analysis demonstrates that, because some member states take a monist and others a dualist approach to international law, directly effective Community law would have been applied unevenly in the different member states had the doctrine of supremacy of Community law not existed. A uniform application of Community law in all the states is, however, essential to promote the functioning of Community law as a supranational legal order. Steiner and Woods go so far as to claim that, if Community law would not apply uniformly throughout the Community, that would not only weaken the effect of Community law, but it would undermine solidarity among the member states and ultimately threaten the existence of the Community itself.[78]
It was thus compelling for the European Court of Justice to create the doctrine of supremacy of Community law in order to safeguard this uniform application and arguably even the continued existence of the Community.
In summary, in a Community where some member states follow a monist and others a dualist approach the doctrine of direct effect alone would not have practical significance in all of the member states and would even promote an uneven application of Community law. Therefore, the doctrine of supremacy is a condition precedent for the doctrine of direct effect.
This conclusion is further supported by the considerations advanced in the following part.
When the doctrine of direct effect was created, the European Court of Justice already recognised the crucial connection between the former doctrine and the supremacy principle. This is revealed by an in-depth analysis of the Van Gend en Loos case[79] where the European Court of Justice assumed the existence of supremacy of Community law, although it did not expressly enunciate it. Two arguments support this conclusion: first, the case contains a clear obiter dictum about supremacy. Secondly, the Advocate General delivered a forceful opinion, explaining in detail that the creation of the doctrine of direct effect would undermine the uniform application of Community law in the member states.[80] Despite the strength of his argument and the obvious threat that an uneven application of Community law poses, the Court did not even mention the issue in its judgment. A logical explanation for this omission is that it did not endeavour to create the doctrine of direct effect in isolation, but in conjunction with the doctrine of supremacy as a condition precedent.
The obiter dictum on which the first argument is based reads as follows:[81]
[T]he Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights … .[82]
By emphasising that the member states had limited their sovereign rights in this new legal order, the Court laid the foundation for the principle of supremacy of Community law. One year later, it explained in Costa v ENEL that, as a consequence of this limitation, member state law could not override Community law. It even used identical wording when illustrating the legal basis of the supremacy principle.[83]
An analysis of the Advocate General’s opinion must be conducted to outline the second argument. Advocate General Romer suggested that the Court should not declare Article 12 EEC Treaty directly effective and not create a doctrine of direct effect. One of his arguments against the creation was that the doctrine of direct effect would lead to the following undesirable result: Community law would not apply equally in all the member states because some of them had a monist, while others had a dualist approach to international law. After demonstrating that the constitutional rules relating to the supremacy of international law differed in the member states,[84] he went on to say:
[I]t is in my opinion doubtful whether the authors [of the Treaty], when dealing with a provision of such importance as customs law, intended to produce the consequences of an uneven development of the law involved in the principle of direct application, consequences which do not accord with an essential aim of the Community.[85]
According to the Advocate General’s reasoning, citizens in the monist countries could rely on Community law in the national courts, while citizens could not do so in the dualist countries, if the Court created a doctrine of direct effect. Obviously the Advocate General did not presuppose a general doctrine of supremacy of Community law complementing the principle of direct effect. In the absence of supremacy, his argument against direct effect is very compelling because, as has been shown above, the uniform application of Community law in all the member states is essential for its function as a supranational legal order.
Considering the strength of Advocate General Romer’s argument, it is surprising that the European Court of Justice did not even mention his concern in its judgment, although it must have realised that the situation described by the Advocate General had to be avoided at all cost. It is highly unlikely that the European Court would have jeopardised the equal application of Community law in all of the member states by creating the doctrine of direct effect. Obviously it did not see the danger of unequal application of laws arise. That can only be explained if the European Court of Justice assumed the existence of supremacy of Community law when creating the doctrine of direct effect.
A statement made by the Court in the subsequent case of Simmenthal supports this conclusion: [86]
[Direct effect] means that rules of Community law must be fully and uniformly applied in all the member states from the date of their entry into force and for so long as they continue in force.
As has been shown, direct effect only means that Community rules are uniformly applied in all the member states, if it is coupled with supremacy.
That leaves the question why, if the European Court of Justice assumed the existence of the doctrine of supremacy of Community law in Van Gend en Loos,[87] it did not explicitly enunciate the principle in that case, but waited another year instead.[88] The answer to this question relates probably to the nature of a reference for a preliminary ruling under Article 234 (ex Article 177) EC Treaty. Van Gend en Loos was a reference for such a preliminary ruling. In this type of proceeding the Court usually merely answers the questions put to it by the national court.[89] The Dutch court had only asked whether Article 12 EEC Treaty had direct effect, but not whether it was supreme over national law.
One year later the Court had the opportunity to address the supremacy issue comprehensively in Costa v ENEL.[90] The referring court asked whether certain pieces of Italian legislation infringed certain Treaty articles. The Italian government submitted that the reference for a preliminary ruling was ‘absolutely inadmissible’ because the Italian judge should have applied Italian law in priority over Community law under the Italian constitution.91 The European Court of Justice took the opportunity to state clearly and comprehensively that Community law was supreme over national law.[92]
In conclusion, it has been shown that the principles of direct effect and supremacy of Community law, the two essential characteristics of the Community legal order, are closely related. It was not a coincidence that the European Court of Justice enunciated the two principles in two consecutive years. Without supremacy there would be an uneven application of directly effective Community law in the member states and in dualist systems citizens would not be assisted by directly effective provisions in national courts. The European Court of Justice recognised the vital connection between the two concepts already in Van Gend en Loos. Although it did not explicitly pronounce the supremacy principle in that case, it proceeded on the assumption that Community law was supreme over national law. Because direct effect cannot exist without supremacy, the doctrine of supremacy of Community law is a condition precedent for the doctrine of direct effect.
* The author is a Lecturer in Law at The University of Adelaide and a PhD candidate at The University of Queensland. An earlier draft of this paper was delivered to the 2002 PhD Colloquium at the TC Beirne School of Law at The University of Queensland. The author would like to thank the attendees of the Colloquium for their comments and Garrick Professor Gabriël Moens for his stimulating comments and suggestions throughout the completion process.
[1] For example, Ulrich Everling, , note 1 at 1206; AG Toth, The Oxford Encyclopaedia of European Community Law, vol 1, Institutional Law, Clarendon Press, Oxford, 1990 at 168; Trevor C Hartley, The Foundations of European Community Law, 4th edn, Oxford University Press, New York, 1998 at 191.
[2] Opinion 1/91, Draft agreement between the Community, on the one hand, and the countries of the European Free Trade Association, on the other, relating to the creation of the European Economic Area, [1991] ECR I-6079 at 6102.
[3] The term ‘condition precedent’ is usually used in contract law. The Concise Australian Legal Dictionary defines a condition precedent as ‘a stipulation that must be fulfilled before one of the parties becomes subject to a contractual obligation’; Peter E Nygh and Peter Butt (eds), Concise Australian Legal Dictionary, 2nd edn, Butterworths, Sydney, 1998 at 85. In this paper the term is used in a different, public law, sense to mean that one principle has to be present before another can have legal effect. It is argued that, unless a provision of Community law is supreme over domestic law, it cannot have direct effect.
[4] The ECJ uses the terms ‘ordinary international law’ or ‘ordinary international treaties’ to distinguish other international agreements and rules from the funding treaties of the European Communities and Community law. It takes this course because it regards the European Community as a special supranational organisation which differs from ‘ordinary’ international organisations’ because it is of unlimited duration, has its own institutions, personality, legal capacity and capacity of representation on the international plane and also real powers stemming from a limitation of sovereignty or a transfer of powers from the states to the Community; case 6/64, Costa v ENEL, [1964] ECR 585 at 593. In this article the term will be used in the same way.
[5] From the perspective of international law this statement is incorrect because all international treaties should be directly applicable and supreme over national law in all signatory countries to an international agreement from the time when the agreement is signed or enters into force. However, the domestic law of every country contains constitutional rules which deal with the status of international law in their domestic legal system. It is these rules which determine how international law can take effect in national law.
[6] JA Winter, ‘Direct applicability and direct effect, two distinct and different concepts in Community law’ (1972) 9 CMLRev 425 at 426–27; Trevor C Hartley, note 2 at 189–90; for a comprehensive analysis of the monist and dualist doctrines see John H Jackson, ‘Status of treaties in domestic legal systems: a policy analysis’ (1992) 86 Am Jo Int L 310.
[7] AG Toth, note 2 at 166.
[8] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1.
[9] Trevor C Hartley, note 2 at 191.
[10] Under Article 234 (ex Article 177) EC Treaty the European Court of Justice has jurisdiction to give preliminary rulings concerning the interpretation of Community provisions including the EC Treaty. Where a question concerning the interpretation of such a provision is raised before a court of a member state, that court can, if it considers that a decision of the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon. For a comprehensive discussion of the procedure under Article 234 (ex Article 177) see, for example, Paul Craig and Gráinne de Búrca, EU Law, Text, Cases and, Materials, 3rd edn, Oxford University Press, New York, 2003 at 432–38.
[11] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1 at 3.
[12] Article 12 EEC Treaty was replaced by a new provision in the Treaty of Amsterdam.
[13] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, Opinion of the Advocate General, [1963] ECR 1 at 20-2, 24. Under Article 222 (ex Article 166) EC Treaty the European Court of Justice has eight Advocates General who are officers of the Court. It is their duty to assist the Court by advising on the factual situation and the legal solution to a dispute with complete impartiality and independence. Each case coming before the court is assigned to an Advocate General who follows closely the progress of the case. Once the written procedure is completed, the Advocate General presents to the court his/her view on whether any preparatory inquiry is necessary and whether the case should be dealt with by a Chamber or by the Full Court. Subsequently, the Advocate General is present at the hearing of the case and is entitled to put questions to witnesses and parties. Some weeks after the hearing the Advocate General delivers his written Opinion to the Court. He/She analyses the facts and legal aspects of the case in detail, and proposes his/her solution to the problem. The Court is not bound by the Advocate General’s view, but the judges take it into account in the course of their deliberations and follow it in a majority of cases. The Opinion of the Advocate General is reported with the judgment. See Paul Craig and Gráinne de Búrca, note 11 at 88, 93–96.
[14] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1 at 12; this view was confirmed in case 43/75, Defrenne v Sabena, [1976] ECR 455 at 478.
[15] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1 at 12.
[16] Ibid.
[17] Ibid, at 13.
[18] Case 106/77, Amministrazione delle Finanze dello Stato v Simmenthal SpA.[1978] EUECJ R-106/77; , [1978] ECR 629.
[19] Ibid, at 643.
[20] In the last part of this paper it will be argued that direct effect only ensures the uniformapplication of Community law in the member states if it is coupled with supremacy.
[21] AG Toth, note 2 at 168.
[22] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands
Inland Revenue Administration, [1963] ECR 1 at 13.
[23] See Articles 81 (ex Article 85), 82 (ex 86), 244 (ex 187), 249 (ex 189), 254 (ex 191) and 256 (ex 192) EC Treaty.
[24] See Articles 84 (ex Article 88), 234 (ex 177), 244 (ex 187), 256 (ex 192) EC Treaty; Articles 26 and 27 EEC Statute.
[25] For example, Case 2/74, Reyners, Opinion of the Advocate General, [1974] ECR 631 at 659.
[26] For example, Case 41/74, Van Duyn v Home Office, Opinion of the Advocate General, [1974] ECR 1337 at 1354–55
[27] For example Case 43/75, Defrenne v Sabena, [1976] ECR 455 at 480–81 as interpreted and applied in Case 61/79, Denkavit Italiana, [1980] ECR 1205 at 1223–34 and in Joined Cases 66, 127, 128/79, Salumi, [1980] ECR 1237.
[28] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1 at 13.
[29] Case 57/65, Lütticke v Hauptzollamt Saarlouis, [1966] ECR 205 at 210; see also Case 28/67, Firma Molkerei-Zentrale Westfalen v Hauptzollamt Paderborn, [1968] ECR 143 at 153.
[30] AG Toth, note 2, 1990 at 173; Trevor C Hartley, note 2 at 191.
[31] Gabriël Moens and David Flint, Business Law of the European Community, DataLegal Publications, Brisbane, 1993 at 283.
[32] Gabriël Moens and David Flint, note 32 at 283; AG Toth, note 2 at 172.
[33] Regulations, directives and decisions are those legislative Community instruments which are binding on the member states and not merely recommendatory. Regulations and directives are general rules, while decisions are addressed to particular addressees. Under Article 249 (ex Article 189) EC Treaty regulations are directly applicable in all member states. Directives, on the other hand, are only binding as to the result to be achieved, but it is in the member states’ discretion how to achieve it.
[34] Trevor C Hartley, note 2 at 216f; Toth A G, note 2 at 173ff; Pescatore Pierre, ‘The doctrine of “Direct Effect”: an infant disease of Community law’ (1983) 8 ELRev 155 at 171ff; Josephine Steiner and Lorna Woods, Textbook on EC Law, (5th edn, Blackstone Press, London, 1996) at
[61] . 35 There is no similar provision in the ECSC Treaty for general decisions (equivalent to EC Treaty regulations). 36 Trevor C Hartley, note 2 at 197; Josephine Steiner and Lorna Woods, note 35 at 38; Pierre Pescatore, note 35 fn 2.
[37] The first one to make this distinction was JA Winter, note 7.
[38] See for example AG Toth, note 2 at 160–61, 166; Gabriël Moens and David Flint, note 32 at
[284] ; Josephine Steiner and Lorna Woods, note 35 at 38; D Lasok and KPELasok, Lasok and Bridge, Law and Institutions of the European Union, (6th edn, Butterworths, London, 1994) at 294–45.
[39] Trevor C Hartley, note 2 at 187.
[40] Josephine Steiner and Lorna Woods, note 35 at 65.
[41] See explanation in note 6.
[42] For example, Articles 93–94 of the Dutch constitution accord supremacy to all forms of international law, whether prior or subsequent to domestic law; Article 55 of the French constitution provides that treaties and agreements duly ratified ‘have authority superior to that of laws’; Article 24 of the German constitution provides that the state ‘may transfer sovereign powers’ to intergovernmental institutions; according to Article 11 of the Italian constitution the state ‘consents, on condition of reciprocity with other States, to limitations of sovereignty necessary for an arrangement which may ensure peace and justice between the nations’. The principle of reciprocity means in this context that if one party to an agreement breaches its obligations, the other contracting parties may regard themselves as entitled to be relieved of theirs. The UK takes a dualist approach to international law, which means that Treaties have to be transformed into national law before they become part of the UK legal system. Furthermore, it does not have a written constitution. Therefore, it must provide for priorities in the statute that incorporates the international Treaty. This statute has the same status as any other national statute and will as such be vulnerable to the doctrine lex posterior derogat priori whereby any inconsistency between an earlier and a later statute is resolved in favour of the latter. The later statute is impliedly deemed to have repealed the earlier one (see Ellen Street Estates Ltd v Minister of Health (Ellen Street Estates Ltd v Minister of Health) (1934) 1 KB 590). With regard to Community law that would mean that any provision of a UK statute passed subsequent to the statute incorporating EC law (the European Communities Act 1972 ) which was inconsistent with Community law would take priority. Translations of constitutions taken from Josephine Steiner and Lorna Woods, note 35 at 65–66.
[43] The doctrine is also referred to as primacy or precedence of Community law.
[44] Toth AG, note 2 at 168.
[45] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1.
[46] Ibid, at 12.
[47] Case 6/64, Costa v ENEL, [1964] ECR 585.
[48] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands
Inland Revenue Administration, [1963] ECR 1.
[49] Article 10(2) EC Treaty reads: [Member States] shall abstain from any measure which could jeopardise the attainment of the objectives of this Treaty.
[50] Article 12 EC Treaty reads: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.
[51] Case 6/64, Costa v ENEL, [1964] ECR 585 at 593–94.
[52] AG Toth, note 2 at 502; Steiner Josephine and Woods Lorna, note 35 at 69.
[53] Case 11/70, Internationale Handelsgesellschaft v Einfuhr- und Vorratsstelle für Getreide &
Futtermittel[1970] EUECJ R-11/70; , [1970] ECR 1125.
[54] Ibid, at 1134.
[55] Ibid.
[56] Case 106/77, Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] EUECJ R-106/77; [1978] ECR 629.
[57] Case 11/70, Internationale Handelsgesellschaft v Einfuhr- und Vorratsstelle für Getreide &
Futtermittel[1970] EUECJ R-11/70; , [1970] ECR 1125.
[58] Case 106/77, Amministrazione delle Finanze dello Stato v Simmenthal SpA.[1978] EUECJ R-106/77; , [1978] ECR 629 at
[643] . 59 Ibid, at 644. 60 Ibid. 61 Case 167/73, Commission v France, [1974] ECR 359 at 372. 62 Ibid, at 372–73. 63 Case 22/70, Commission of the European Communities v Council of the European Communities.
European Agreement on Road Transport (ERTA), [1971] ECR 263. 64 Ibid, at 274.
[65] Case 158/91, Levy, [1993] ECR I–4287 at 4307.
[66] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1.
[67] The only exception that could be anticipated is where no national rule exists in an area that is regulated by Community law. However, this situation would only arise very rarely.
[68] See above fn 43.
[69] For example, the Netherlands, Luxembourg, France, Belgium; see John H Jackson, note 7 at 320. 70 For example Germany, Italy and the United Kingdom, see John H Jackson, note 7 at 320. 71 For a thorough analysis of the status of international treaties in national legal systems see
John H Jackson, note 7. 72 In 1963, case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1 73 In 1963 the European Community only had six Member States: France, Germany, Italy, Belgium, Luxemburg and the Netherlands.
[74] The doctrine of implied repeal lays down the rule that any inconsistency between an earlier and a later statute is resolved in favour of the latter, see note 43.
[75] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1.
[76] John H Jackson, note 7 at 320.
[77] Costa v Enel e soc Edisonvolta, 7 March 1964, n 14.
[78] Josephine Steiner and Lorna Woods, note 35 at 66.
[79] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands
Inland Revenue Administration, [1963] ECR 1.
[80] Advocate General Romer’s argument corresponded to the first part of the analysis conducted under the previous heading. He examined the legal systems of the six member states and pointed out how directly effective Community law would apply in each state. He came to the conclusion that Community law would apply unevenly in the states if the doctrine of direct effect was created.
[81] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1 at 12.
[82] Emphasis added.
[83] Case 6/64, Costa v ENEL, [1964] ECR 585 at 593 the Court said: ‘By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Community, the member states have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves’ [emphasis added].
[84] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, Opinion of the Advocate General, [1963] ECR 1 at 23–24; Advocate General Romer concluded that Belgium had a dualist system. The Belgian courts have taken the opposite view, see John H Jackson, note 7 at 320.
[85] Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, Opinion of the Advocate General, [1963] ECR 1 at 24; Although the Advocate General uses the term ‘direct application’ it is clear from the context that he means ‘direct effect.’ As stated above, regrettably the European Court of Justice does not make a clear distinction, but uses the two expressions interchangeably.
[86] Case 106/77, Amministrazione delle Finanze dello Stato v Simmenthal SpA, [1978] EUECJ R-106/77; [1978] ECR 629 at
[643] . 87 Case 26/62, NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration, [1963] ECR 1.
[88] Case 6/64, Costa v ENEL, [1964] ECR 585.
[89] Josephine Steiner and Lorna Woods, Textbook on EC Law, (7th edn, Blackstone Press,
London, 2000) 487; Paul Craig and Gráinne de Búrca, note 11 at 432; Trevor C Hartley, note 2 at 289–90; Andrew Evans, A Textbook on EU Law, (Hart Publishing, Oxford, 1998) at 138–39.
[90] Case 6/64, Costa v ENEL, [1964] ECR 585.
[91] This view had been confirmed by the Italian Constitutional Court in its review of Costa v ENEL, Costa v Enel e soc Edisonvolta, 7 March 1964, n 14.
[92] Case 6/64, Costa v ENEL, [1964] ECR 585 at 593–94.
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