Category: Comments

The impact of Brexit on international trade taxation

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 by Andreia Barbosa, PhD student at the Law School of UMinho
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On 23 June 2016, the British people decided to leave the European Union, re-launching the idea that belonging to the European Union, in the light of Article 50 of the Treaty on European Union, does not seem to be an obligation, but a choice. States have the (unilateral) right to leave.

The actual effects of Brexit are not yet fully known. In fact, its exact consequences will only be effectively known when the negotiations are over – which will only happen, predictably, in early 2019.

There are, however, more likely scenarios than others and, consequently, more likely effects than others. Among the most immediate scenarios and effects, are those relating to the commercial transactions between the United Kingdom and the European Union. Because, of course, one of the most important ideals of the European Union is the free movement of goods, based on the existence of a single market without technical and physical frontiers in the free movement of persons, services, goods and capital­. So, the question arises as to the terms under which trade in goods between the United Kingdom and the Member States of the European Union will take place.
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The first steps of a revolution with a set date (25 May 2018): the “new” General Data Protection regime

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by Pedro Madeira Froufe, Editor
▪


1. Homo digitalis[i] is increasingly more present in all of us. It surrounds us, it captures us. Our daily life is digitalising rapidly. We live, factually and considerably, a virtual existence… but very real! The real and the virtual merge in our normal life; the frontiers between these dimensions of our existence are bluring. Yet, this high-tech life of ours does not seem to be easily framed by law. Law has its own time – for now barely compatible with the speed of technologic developments. Besides, in face of new realities, it naturally hesitates in the pursuit of the value path (therefore, normative) to follow. We must give (its) time to law, without disregarding the growth of homo digitalis.

2. Well, today (25 May 2018) the enforcement of Regulation 2016/679 (GDPR) begins. Since 25 January 2012 (date of the presentation of the proposal for the Regulation) until now the problems with respect to the protection of fundamental rights – in particular the guarantee of personal data security (Article 8 CFREU) – have been progressively clearer as a result of the increase in the digital dimension of our lives. Definitely, the personal data became of economic importance that recently publicized media cases (for example, “Facebook vs. Cambridge Analytics”) underline. Its reuse for purposes other than those justifying its treatment, transaction and crossing, together with the development of the use of algorithms (so-called “artificial intelligence” techniques) have made it necessary to reinforce the uniform guarantees of citizens, owners of personal data, increasingly digitized.
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A Union based on the rule of law beyond the scope of EU law – the guarantees essential to judicial independence in Associação Sindical dos Juízes Portugueses

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 by Alessandra Silveira, Editor 
 and Sophie Perez Fernandes, Junior Editor

▪


On 27 February 2018, the European Court of Justice (ECJ) delivered its judgment in the Associação Sindical dos Juízes Portugueses case (C-64/16), a judgment which, for its relevance for effective judicial protection and the rule of law in the EU, is already compared with Les Verts (here).

At the origin of the request for a preliminary ruling is a special administrative action brought before the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal) seeking the annulment of salary-reduction (administrative) measures of the judges of the Tribunal de Contas (Court of Auditors, Portugal). These measures were adopted on the basis of a Portuguese law of 2014 putting in place mechanisms for the temporary reduction of remuneration (and the conditions governing their reversibility) of a series of office holders and employees performing duties in the public sector, including members of the judiciary. As the Advocate General Saugmandsgaard Øe pointed out (here), the ECJ was in essence asked to “determine whether there is a general principle of EU law that the authorities of the Member States are required to respect the independence of the national judges and, more particularly – in the light of the circumstances of the main proceedings – to maintain their remuneration at a constant level that is sufficient for them to be able to perform their duties freely.”

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The EU and the adoption of Free Trade Agreements (FTAs): heading towards a vetocracy?

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 by Francisco Pereira Coutinho, Professor at the NOVA Law School, UNL
▪

Few would disagree that signing free trade agreements (FTAs) is one of the raisons d ´être of the European Union (EU). As the United Kingdom will probably discover after leaving the EU, the bargaining power of a State, even a member of the G8, is far inferior to that of the world largest economy, which is also the one that most imports, exports, receives and sends foreign direct investment. Ever since the Rome Treaty (1957) granted ius tractum to the European Economic Community, dozens of FTAs were adopted. The latter are pivotal to the European economy: around 31 million employments in the EU (1/7 of the total) depend, direct or indirectly, from the external trade.

The Lisbon Treaty broadened the legal capacity of the EU to adopt ‘new generation’ FTAs, which are trade agreements which contains, in addition to the classical provisions on the reduction of customs duties and of non-tariff barriers to trade in goods and services, provisions on various matters related to trade, such as intellectual property protection, investment, public procurement, competition and sustainable development (ECJ, Opinion 2/15, para. 17).

The Comprehensive Economic and Trade Agreement (CETA) is a ´new generation’ bilateral FTA that was signed on 30 October 2016 between Canada, of one part, and the EU and the Member States, of the other part. It is expected to increase EU-Canada trade in goods and services by 23% and boost EU GDP by about €12 billion a year.
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The Customs Union – an island under construction?

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 by Andreia Barbosa, PhD student at the Law School of UMinho
▪

“No country is an island”[i]. It is an idea that is entirely valid in the context of the European Union and is particularly relevant in the area of ​​the Customs Union. Although the European Union represents only 6.9% of the world’s population, the volume of trade with the rest of the world corresponds to approximately 20% of the volume of world exports and imports[ii].

In fact, and in order to meet the characteristics that have been identified as necessary for a perfect Customs Union, there can be no frontiers among the Member States, although their territories may be separated by sea.

In particular, in the field of the European Union, the levying of customs duties between Member States no longer makes sense in view of the establishment of the internal market. Thus, the 1957 Treaty of Rome prohibited customs duties and charges having equivalent effect in trade between Member States. A Customs Union emerged, where national borders were replaced by the limits of the customs territory of the Union.

It happens that the Customs Union is not – and cannot be – an island. Commercial contact with the rest of the world is essential for the very survival of the Member States, making it reasonable that trade with third countries is sometimes facilitated, in approximate terms to those that exist internally. Free trade agreements are particularly important in this area.
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Just married!… right? Same-sex marriage and free movement of EU citizens – an account on the Opinion of Advocate General Wathelet in Coman and Others

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 by Sophie Perez Fernandes, Junior Editor

▪


Lapalissade stands for tautology, an utterly obvious truth.

Last week, Advocate General Wathelet, in his Opinion in Coman and Others, considered that the term ‘spouse’ used in Article 2(2)(a) of Directive 2004/38 on the right of EU citizens and their family members to move and reside freely within the territory of the Member States, should be given a uniform interpretation as an autonomous concept of EU law and, under such interpretation, that the term ‘spouse’ includes, in the light of the freedom of residence of EU citizens and their family members, spouses of the same sex.

Isn’t/Shouldn’t it be a lapalissade?…

The protection of family as such is guaranteed by numerous international legal instruments of protection of fundamental rights, namely the Universal Declaration of Human Rights (Article 16), the International Covenant on Civil and Political Rights (Article 23) and the International Covenant on Economic, Social and Cultural Rights (Article 10). In these instruments, family is regarded as “the natural and fundamental group unit of society”. The protection of family is also guaranteed by the ECHR, which, in Articles 8 and 12, protects, respectively, the right to respect for private and family life and the right to marry – provisions that are, in turn, on the basis of Articles 7 and 9 CFREU concerning the right to marry and the right to found a family. Also, “respect for family life” was considered by the ECJ as “one of the fundamental rights which (…) are recognized by Community law” even before the CFREU had been proclaimed[i].
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E pur si muove! After all, we do have a highest level of protection of fundamental rights… (about the Taricco saga)

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 by Alessandra Silveira, Editor 
 and Sophie Perez Fernandes, Junior Editor

▪

On 5 December 2017, the European Court of Justice (ECJ) ruled again on the Taricco saga. The interpretation set out in the judgment in Taricco I gave rise to heated debate, particularly within the Italian legal community, since the compatibility of the interpretative solution set out therein was called into question in the light of supreme principles of the Italian constitutional order, particularly the principle of legality in criminal matters [Article 25(2) of the Italian Constitution], the disregard of which would allegedly violate the constitutional identity of the Italian Republic.

At the origin of the judgment in M.A.S. and M.B. (or Taricco II) is thus the interpretation laid down in Taricco I regarding Article 325 TFEU, the provision concerning the obligations on Member States to combat fraud affecting the financial interests of the Union. In Taricco I, the ECJ held it to be incompatible with EU law, in particular with Article 325 TFEU, a national regime on limitation periods for criminal offenses which has the effect that facts constituting serious fraud affecting the financial interests of the Union would escape criminal punishment, in the framework of a de facto impunity.

The contentious point was that, within the Italian legal system, and with support of constitutional case-law, the legislation governing limitation periods of criminal offences is characterised as being substantive (rather than procedural) in character and is, therefore, subject to the principle of legality in criminal matters laid down by Article 25(2) of the Italian Constitution. Since the Italian constitutional order would ensure (according to the Italian Constitutional Court) a higher level of protection of fundamental rights than the one guaranteed under EU law, the Italian Constitutional Court held that both Article 4(3) TEU (respect for national constitutional identities) and Article 53 CFREU (principle of the highest level of protection of fundamental rights) would allow national courts not to comply with the obligation laid down by the ECJ in Taricco I (see commentary here).

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The ultimate guide(line) to DPIA’s

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by João Marques, member of the Portuguese Data Protection National Commission and member of CEDU
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Although merely advisory in its nature, the Article 29 Working Party (WP 29) has been a major force in guaranteeing a minimum of consistency in the application of the Directive 95/46/CE, allowing member states’ public and private sectors to know what to expect from their supervisory authorities perspectives on various data protection subjects. Its independence has played a major role in the definition of its views and opinions, focusing on the fundamental rights at stake and delivering qualified feedback to the difficult issues it has faced.

The new European legal framework on data protection has produced a step forward on this regard by instituting a new formal EU Body – the European Data Protection Board – EDPB (Art. 68 of the General Data Protection Regulation – GDPR). This will represent a significant step forward in the European institutional landscape concerning data protection but it does not mean that the WP 29 is already dead and buried, quite the opposite.

As it is already known, the EDPB will have far reaching powers designed to guarantee consistency and effectiveness to the rules of the regulation across the EU. One of the said powers translates into the issuance of guidelines in several matters [Art. 70 (1)(d), (f), (g), (h), (i), (j), (k), (m) of the GDPR].

The problem is, of course, that this new EU Body will only exist from May 2018 onwards, leaving a gap of two years (from May 2016, when the regulation entered into force) to be filled by the current legal and institutional frameworks. As such the WP29 took it into its hands to materialize these particular tasks of the EDPB during this transitional phase, fully aware that the guidelines it may issue for the time being could still be rebutted by the EDPB members. Nevertheless this is a calculated risk as the members currently sitting in the WP 29 will almost certainly be the ones who’ll be sitting in the EDPB.

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On the Catalan separatism and the political comprehension: democracy is (must be) more than voting…

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 by Alessandra Silveira, Editor

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On October 1st, we watched stupefied and live the events around the unilateral declaration of the independence of Catalonia. The European Commission has resisted the persevering attempt of the Catalan separatists of converting the Catalan question into a European question.  President Juncker considers that is an internal issue of Spain and the decisions of the Spanish courts and of the Spanish Parliament should be respected. Unpleased, the separatists spread on social medias messages claiming the application of article 7, Treaty on the European Union, i. e., calling on the suspension of the rights of a Member State due to the use of military force against its population.

We shall then make a brief exercise to test the conformity of such argument and try to understand why the EU has resisted taking parting in this imbroglio. What were the Spanish police doing in the voting pools? They were assuring the execution of judicial decisions – of the Spanish Constitutional Court and the Supreme Court of Catalonia itself – aimed at preventing the realization of an unconstitutional and illegal referendum, organised in clear violation of the rule of law. Or, more concretely, the policemen were apprehending documents and instruments destined to facilitate the voting, especially ballot boxes, computer equipment, ballot papers and propaganda papers – and reacted against the ones who were trying to hinder their action.

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State of the Union 2017 scenario: with full breath ahead

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by Sergio Maia, Managing Editor
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On September, 13th President Jean-Claude Juncker addressed the annual speech of the State of the Union (here). Against the background of the White Paper on the Future of Europe and in solid dialogue with the European Parliament, President Juncker presented some new ideas as well as highlighted previous proposals. More importantly, the European Commission demonstrates that it is effectively holding the position of initiative with which the Treaties empower it – in close democratic discussion with the Parliament.

Here we intend to comment the first impressions about key aspects of some of the topics the Juncker Commission brought to life and debate.

1. After valuing the European institutions role on “helping the wind change” for growth, job creation and control of public deficits, he expressed the will to strengthen the European trade agenda by negotiating international agreements. It seems that after the cases of the Paris agreement (on environmental issues) and the uncertainty around TTIP, there are two messages underlying this point. The first is to make the EU the main business platform worldwide (Canada, Japan, Mexico, South America and the proposal to open negotiations with Australia and New Zealand). Reliable and stable, Europe wants to be the ideal partner and the first in line in global economy. With many interrogations amounting over the US, this also seems to be an external policy strategy (“we are not naïve free traders”, he said). Alongside investment, the idea is to make the industry stronger and more competitive as well as being the leader in fighting climate change. More and more signals of the projection of the leadership of the Union in the world.

2. As far as migration, external borders and the Schengen area are concerned, migration will remain a priority. So will the support to Italian authorities who are “saving Europe’s honour in the Mediterranean”. In parallel, the Commission wants to work on legal pathways to end illegal activities like trafficking at the same time it calls for solidarity in welcoming refugees. This is a novelty. After Germany’s policy of opening doors, now the EC looks like the new leading actor in this matter. Contrary to the position of his political family, which never clearly came out, President Juncker took on a stand closer to the approach of S&D. It will be interesting to follow the next parliamentary debates and what the EPP’s reaction will be, even though its following remarks were in a more agreeable way to these terms. Finally, suggesting that Romania, Bulgaria and soon Croatia should become members of the Schengen area is a political movement on a critical region where Russia has been growingly active. The idea seems to be to overpower its influence there – the direct reference of the 100th anniversary of Estonia, Latvia, Lithuania and Romania proves just that.

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