Case law digest - October 2020

Case C-514/19 Union des industries de la protection des plantes v Premier ministre, Ministre de la transition écologique et solidaire, Ministre des Solidarités et de la Santé, Ministre de l’Agriculture et de l’Alimentation, Agence nationale de sécurité sanitaire de l’alimentation, de l’environnement et du travail decided on 08 October 2020

France validly informed the Commission of the need to take measures intended, in particular, to protect bees. France had prohibited the use of active substances of the neonicotinoid family authorised by the Commission

- In accordance with Regulation (EC) No 1107/2009 Member States may take unilateral protective measures if they have previously raised concerns (by way of notification) about an active substance with the Commission and the Commission does not adopt protective measures

- a concern raised with the Commission by way of notification under the (EC) No 1107/2009 harmonisation regulation requires only that the Member State concerned “officially informs” that institution, without having to do so in a particular manner

- The Commission must observe the principles of sincere co-operation and sound administration

- the communication of a national measure prohibiting the use of certain active substance falling within the scope of the harmonisation regulation must be regarded as the official provision of information on the need to take emergency measures where that communication contains a clear presentation of the evidence showing, first, that those active substances are likely to constitute a serious risk to human or animal health or to the environment and, second, that that risk cannot be controlled without the adoption, as a matter of urgency, of the measures taken by the Member State concerned, and where the Commission failed to ask that Member State whether that communication must be treated as the official provision of information under the regulation.

- that the fact that the official provision of information by a Member State to the Commission already includes a draft measure does not release that Member State from the obligation to inform the other Member States and the Commission immediately of the final adoption of that measure, in accordance with the harmonisation regulation.

 

Case C-360/19 Crown Van Gelder BV v Autoriteit Consument en Markt (ACM) decided on 08 October 2020

A customer may submit a complaint against the operator of the national grid following a power failure. That complaint may not be dismissed for the sole reason that that final customer’s installation is connected not to the national electricity system, but only to a regional system fed by the national system

- A factory suffered damage during a large-scale power failure. The factory was supplied with energy by a distribution system fed by the national system. The question was whether the claim may be dismissed on the grounds that there is no direct relationship between the claimant and the defender.

- Under directive 2009/72 there is no reference to a requirement for the existence of a direct relationship between the complainant and the system operator in order to establish competence on behalf of the national court.

- Directive 2009/72 aims to grant energy regulators the power to ensure the full effectiveness of consumer protection measures. Likewise, the directive requires Member States to ensure high levels of consumer protection, particularly with respect to dispute resolution mechanisms.

- the tasks and obligations imposed on them by Directive 2009/72 do not concern only those entities whose installation is connected to their system. Thus, they are required inter alia to operate, maintain and develop under economic conditions secure, reliable and efficient transmission systems They are also required to ensure adequate means to meet service obligations, to contribute to security of supply through adequate transmission capacity and system reliability and to manage electricity flows on the system, taking into account exchanges with other interconnected systems.

- the concept of ‘party having a complaint’ found in the Directive cannot be interpreted as involving a direct relationship between the complainant and the transmission system operator concerned by the complaint. Consequently, where it receives a complaint from a final customer alleging non-compliance with obligations imposed on transmission system operators by Directive 2009/72, a national court is not entitled to dismiss that complaint on the ground that the installation of that final customer is connected not to that transmission system directly, but only to a distribution system fed by it.

 

Advocate General’s Opinions in Cases C-562/19 P Commission v Poland and C-596/19 P Commission v Hungary opinion given on 15 October 2020

The Polish tax on the retail sector and the Hungarian advertisement tax do not infringe EU State aid rules. State aid rules do not preclude taxation of turnover of undertakings at a progressive rate

- Direct business taxes introduced in Poland and Hungary are calculated according to turnover rather than profit and are based on a progressive rate structure. These primarily affect undertakings with a high turnover.

- The Commission declared both taxes incompatible with the common market since they grant smaller undertakings an impermissible advantage as they are taxed at a “too low level” and this therefore constitutes State Aid.

- It was decided by the general court that this did not amount to state aid since there was no evidence in either tax regime of any selective advantage and therefore it could not follow a finding of State aid in favour of undertakings with lower turnover.

- Advocate General Kokott proposes that the Court of Justice dismiss the Commission’s appeals and uphold the General Court’s judgments. It is not possible to infer ‘normal’ taxation from EU law. The basis can only ever be the decision by the national legislature in question as to what it deems to be normal taxation; A generally applicable tax law – which, like here, just creates the reference framework – can therefore constitute aid only if its design was manifestly inconsistent; Turnover-based income taxation – like profit-based income taxation – has its advantages and disadvantages. However, these must be weighed up and accounted for not by an authority or a court, but by a democratically mandated legislature; In addition, a progressive rate does not constitute an inconsistency per se. Progressive rates are a perfectly common means in income taxation of achieving taxation according to financial capacity;

 

Case C-321/19 BY and CZ v Bundesrepublik Deutschland – decided on 28 October 2020

Traffic police-related costs cannot be taken into account in the calculation of tolls for the use of the trans-European road network by heavy goods vehicles. Such costs are not part of the infrastructure costs on the basis of which those toll rates must be calculated

- Two parties operated a company governed by Polish law that was engaged in the business of road haulage, including in Germany. They paid tolls for the use of German federal Motorways which they considered excessive. This was argued was contrary to EU Law as imposing an excessive financial obligations.

- The question referred to the CJEU by the German Court was whether the fact that costs related to traffic police were included in the calculation of the tolls at issue constituted an infringement of the directive on the charging of heavy goods vehicles for the use of certain road infrastructures

- On an interpretation of directive 1999/62, the CJEU stated that it imposes on Member States which introduce or maintain tolls on the trans-European road network a precise and unconditional obligation to determine the level of those tolls taking into account infrastructure costs only, that is to say, the costs of constructing, operating, maintaining and developing the infrastructure network concerned. Failure to comply or transpose gives right to a direct right of action against the infringing state.

- Further, Police activities are the responsibility of the State acting in the exercise of its public powers and not as operator of the road infrastructure. Therefore, costs related to traffic police cannot be considered to be operating costs as referred to by the directive 1999/62.

- directive 1999/62 precludes any overrun of the infrastructure costs that results from ineligible costs having been taken into account.