The EU and the challenges of the digital economy

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 by Iva Guterres, PhD student at the University of Leeds

In 1995 Don Tapscotts coined the term Digital Economy in his book, “The Digital Economy: Promise and Peril in the Age of Networked Intelligence”. At the time, he was far for imagining just how the future would be dictated by the internet and technological development (then still in its infancy). In the meantime, the internet has become a huge part of the global economy.  Tapscotts’ book established the connection between the internet and the way economic models would change the way business was done and seen from there onwards.

At the beginning of the 1990s one major question rose on the legal landscape. What would the challenges be for global e-commerce and the tax rules or even global digital taxation? In 1996, David Tillinghast[i] wrote an article in which he questioned how traditional tax rules or policies would react to cross-border e-commerce.

Since then, history has witnessed radical changes in society and in the economy, which took Klaus Schwas, founder and chairman of the World Economic Forum, to write the book, “The fourth Industrial Revolution in 2016”.

In recent years, the EU and the OECD have been keeping an eye on business activities, especially since 2013, through the BEPS project (The Base Erosion and Profit Shifting). This was motivated by the behaviour of multinationals attempting to avoid paying tax in their home countries by taking their businesses abroad to low and no-tax jurisdictions. This generated practices and behaviors of schemes indicting aggressive fiscal planning.
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The EU and its neighbourhood: engagement without enlargement?


 by Sandra Fernandes, Professor at UMinho/Researcher of the CICP

Taking a rapid glance at the EU immediate neighbourhood, both Eastward and Southward, the prospects do not look very positive. Since the annexation of Crimea by the Russian Federation in March 2014 and the ongoing conflict in Ukraine, both the relations with Moscow and with the countries of the Eastern Partnership (EaP) have not produced the desired results. The EaP was designed in 2009 to boost the 2004 European Neighbourhood Policy (ENP) and improve convergence with the EU standards, offering approximation without a clear enlargement schedule. On the Southern border of the Mediterranean, the unfulfilled expectations of the Arab Springs and the war in Syria have exposed the lack of effects of the Barcelona Process and have put under serious crisis the ability of the Union to respond to unprecedented migration flows. The Process launched in 1995 has been updated since then into the Euro-Mediterranean Partnership (Euromed) and later, in 2008, into the Union for the Mediterranean. The ENP added to this political format from 2004 onwards.

Bulgaria has just assumed the Presidency of the Council of the EU for the next six months, as a Southern member state having EU external borders with both the Balkans and Turkey. Taking into considerations some of this Presidency’s priorities, we explore here the major challenges that the EU external action has to face in order to impact on stabilisation in its European vicinity, looking at both the Balkan countries and the Eastern neighbours. For that purpose, we put under perspective the effectiveness of EU past and present policies and the current state-of-play in these neighbourhing countries.
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The European Pillar of Social Rights: a first step in the right direction or rather a palliative, cosmetic care? Some critical remarks from a constitutional perspective


 by Pietro Masala, Postdoctoral Research Fellow (García Pelayo), CEPC, Madrid

On 17 November 2017 the European Pillar of Social Rights (EPSR), a document proposed by the Juncker Commission expressing “principles and rights essential for fair and well-functioning labour markets and welfare systems in 21st century Europe” (as said in its Preamble), was solemnly proclaimed by an interinstitutional conference in Gothenburg, in the framework of a “Social summit for fair jobs and growth”. It is, of course, too early to evaluate the concrete impact of this document on the development of the social dimension of the European Union. Nevertheless, it is possible to examine its contents and the acts which prepared its proclamation (namely, a Commission communication establishing the EPSR and a Commission recommendation setting the EPSR principles and rights[i]), in order to express some essential critical remarks.These shall help understand the EPSR’s constitutional meaning and implications in the present phase of the integration process.

It is widely recognised that, during the last decade, the financial crisis and, especially, the new economic governance which has been introduced and implemented in the eurozone as a response, have significantly increased the pre-existing “constitutional imbalance between ‘the market and ‘the social’ in the European Union”[ii] . The asymmetry between these two components was justified, at the early stages of the integration process, by a clear separation of powers and tasks between the European Communities (the market) and the Member States (the social), but it is no longer tolerable in the present Union. Both external and internal factors affect the sovereignty of the Member States in defining and implementing their social and employment policies, in a way that has reduced substantive equality and internal solidarity in European societies. On one hand, the new context of globalization implies new challenges for the “European social model”; on the other hand, the development of the European single market and of the Economic Monetary Union has had a strong impact on national welfare states.These factors as a whole induce to believe that the conferral of more extended powers (and resources) to the Union, allowing the partial federalisation of the social domain, is desirable, as it would entail a more effective protection of social rigths, through a fair cooperation between the Union and the Member States.

Continue reading “The European Pillar of Social Rights: a first step in the right direction or rather a palliative, cosmetic care? Some critical remarks from a constitutional perspective”

Rose-tinted glasses might prove fatal: populists and their performances after the 2017 Dutch general election


by Rita Costa and Tiago Cabral, members of CEDU

Seven months have passed since our submission to the 2017’s edition of the Professor Paulo de Pitta e Cunha Award regarding the European Union’s existential crisis. In our paper, we stressed that the year of 2016 was marked by a rise of populism and isolationism around the world, and addressed that the European Union must reform itself in order to regain the citizens’ trust and reinforce democracy, even if doing so entails a revision of European Constitutional law.

In one of the paper’s final remarks, we wrote:

On May 2017, the French go to the polls in the Presidential elections. The eurosceptic candidate Marine Le Pen is an almost certain lock for disputing the second round of the elections. Even if it is unlikely that she will ultimately achieve victory, the same was said of Donald Trump. In the Netherlands, Geert Wilders’ PVV might become the largest political party in the Tweede Kamer (lower chamber of the Dutch parliament). While it is almost certain that PVV will not be able to form a government because they will not achieve the required majority and do not have the support of other parties, such a result should be cautiously noted. In Germany, the dispute will be between Merkel’s CDU and Schulz SPD, none of them being an immediate risk to European integrity. Even so, AfD’s evolution in recent years is worrisome . (…) The political forces that wish for the disintegration of the EU have a lot of defects, but no one needs to tell them ‘di qualcosa, reagisci!’”

Now it is time to draw up the second chapter with an update on the 2017 European political landscape.

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Competition harms created by administrative legislation: a new approach to an ancient problem


by, María Pilar Canedo Arrillaga, Professor at the University of Deusto and Jean Monnet Chair

Competition law has a general aim of protecting markets against those actors that, for different reasons, break the rules of the game and obtain an extra-benefit harming competitors, consumers and society in general.

The traditional approach to competition law is to focus attention on undertakings – generally the most powerful because of different reasons – that find in the absolute freedom of laissez faire, the best opportunity to maximize their particular benefits not taking into consideration the general interest. Articles 101 and 102 of the Treaty of the Functioning of the EU have been the most relevant tool to fight these practices both by the European Commission and the national or subnational authorities.

In the former 20 years attention has been given by different international Organizations (OEDC, UNCTAD) to the role played by the State in the harms generated in the markets. Article 107, TFUE (dealing with State Aid) was since the beginning of the European Market one of the concerns of the EU institutions but a new approach is needed in this field.

The many different levels of administration (central Governments, regions, provinces, mayors) have the power to create legislation that reduces competition by creating entry barriers in markets or by generating discrimination between economic actors.

Those administrations have an incredible economic power when they enter into public procurement procedures in order to guarantee services and products to de citizens. If those administrations don’t impose the principles of efficiency in their procedures, the services received by the population will be more expensive and will have lower quality.

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Judicial review of EPPO procedural acts and decisions: a disruptive and resilient architecture?

Crime Scene

by Luis de Lemos Triunfante, Judge-Second National Expert at Eurojust Portuguese Desk

“The creation of a European Public Prosecutor’s Office will enable us to have the missing tools: kick investigations across the Union and exchange of information in real time. The European Public Prosecutor will work together with the Deputy Prosecutors of each of the 17 participating countries and congregate national expertise by coordinating them at EU level. The objective is to create a strong, independent and effective body that develops expertise in the fight against financial crime throughout the EU. The 17 Member States concerned will now move the process forward, hoping that others will join soon. The Commission has always defended the interest of all Member States and this initiative is open to all”, Sharing sovereignty to combat financial crime – Jean-Claude Juncker.

DH-CII (Human Rights Centre for Interdisciplinary Research), in collaboration with CEDU (Centre of Studies in EU Law) and the Union of Magistrates of the Public Prosecutor’s Office, organised, on 18 May at the Law School of the University of Minho, an International Criminal Law Congress about “The new challenges of Judicial and police cooperation in the European Union and the implementation of the European Public Prosecutor’s Office”.

The aim of that initiative was to bring to the discussion the main issues that lie today in judicial and police cooperation, mutual recognition, harmonization and the protection of human rights in the European Union. It also intended to analyse the challenges surrounding the implementation of the European Public Prosecutor’s Office (EPPO). In a special way, a critical and prospective look was taken on the Proposal for a Council Regulation establishing the EPPO under discussion, taking into account the current state of negotiations, the main aspects of substantive criminal law and substantive Criminal proceedings; the Statute and the institutional design of the EPPO (matters of institutional law) and the relations between the EPPO, Eurojust and OLAF.

One of the main issues of the EPPO is the judicial review.
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Tensions between European Union Law and Private International Law – impact on cross-border mobility of companies


by Jorge Ribeiro, PhD candidate at Universidad de Vigo


This essay intends to give a brief analysis on the relationship between European Union Law and Private International Law, particularly the impact on cross-border mobility of companies in the European space[i].

The Treaty on the Functioning of the European Union (TFEU) explicitly recognises freedom of establishment for companies. However, nowadays, a number of obstacles still persist regarding companies’ mobility as a result of the coexistence of the incorporation and the real seat doctrine. This is also due to the way in which the European Court of Justice (ECJ) case law has dealt with the free movement of companies.

It is argued that it would be welcome if the European legislator could take action, mitigating national private international law contrary to European fundamental freedoms[ii].

Dualism of rules

To determine which company law is applicable to a particular company, there are two existing theories: the real seat theory and the incorporation theory.

The real seat theory[iii] provides that the personal law of the company is the law of the country where it has its real seat (its principal place of business). Instead, according to the incorporation theory[iv] the company and its relationships are subjected to the law of the country where it has been incorporated, i.e. registered.

The major difference between the two theories is their effect on the cross-border transfer of the company seat, both from the home and host state perspective. The real seat theory brings limitations to the cross-border transfer of the real seat by making the company subject to different national legal order each time its real seat moves to another state[v]. Likewise a company from an incorporation state that wishes to move its administrative seat to a real seat state may not be recognized as a company in this host state, without dissolution in the home state.

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European Union and Turkey: judicial independence at a crossroads


by José Igreja Matos, President of the European Association of Judges

“In the little world in which children have their existence”, says Pip in Charles Dickens’s Great Expectations, “there is nothing so finely perceived and finely felt, as injustice.” (…) But the strong perception of manifest injustice applies to adult human beings as well. What moves us, reasonably enough is not the realization that the world falls short of being completely just – which few of us expect – but that there are clearly remediable injustices around us which we want to eliminate.” – Amartya Sen, “The idea of Justice” (preface).

As V. Skouris [former President of the Court of Justice of the European Union (CJEU)] brilliantly explained in his speech at the conference Assises de la Justice (November 21, 2013), when analysing matters related to judicial independence, there is a traditional distinction between personal independence and substantive or functional independence. The former essentially refers to the personal qualities of the judge and is destined to ensure that in the discharge of his or her judicial function, a judge is subject to nothing but the law and the command of his or her conscience. The latter of this is the functional independence which refers also to the judicial institution as a whole; it means that the terms and conditions of judicial service are adequately secured by law so as to ensure that individual judges are not subject to any executive control. Judicial independence within the European Union legal order concerns not only the CJEU but also national courts at all levels, since national judges are also what we call in French “juges de l’Union du droit commun“.

Unfortunately, the situation in Turkey is characterized by an affront towards basic standards of judicial independence. Turkey was one of the first countries, in 1959, to seek close cooperation with the then very recent European Economic Community. This cooperation was realised in the framework of an “Association Agreement”, known as the Ankara Agreement, which was signed on September 12, 1963. The CJUE was already called to focus precisely on this Association Agreement for instance in relation to the issue of their limits (Judgement Dereci and others v Bundesministerium für Inneres, Case C-256/11, EU: C:2011:734). This associative status implies that European Union naturally concerns about matters involving Turkey, and what happens with the Turkish citizens concerns the EU citizens. However, the idea “a judge is subject to nothing but the law and the command of his or her conscience” – to use the language of V. Skouris – is today completely marginalized in Turkey as pointed out by different European entities. Some concrete examples can be provided in this regard:

I) In December 8, 2016 the European Network of Councils of Judiciary (ENCJ) decided, in General Assembly, to suspend, with no Council voting against, the observer status of the Turkish Judicial Council (HSYK). Thus the HSYK is now excluded from participation in ENCJ activities. The reasoning of the ENCJ was impressive: “it is a condition of membership, and for the status of observer, that institutions are independent of the executive and legislature and ensure the final responsibility for the support of the judiciary in the independent delivery of justice. (…) taking into account the failure of the HSYK to satisfy the ENCJ that its standards have been complied with, the statements of the HSYK, as well as information from other sources including the reports and statements of the European Parliament, the European Commission, the Human Rights Commissioner of the Council of Europe and Human Rights Watch and the Venice Commission, the ENCJ decided that the actions and decisions of the HSYK, and therefore the HSYK as an institution cannot be seen to be in compliance with European Standards for Councils for the Judiciary. Therefore, the HSYK does not currently comply with the ENCJ Statutes and is no longer an institution which is independent of the executive and legislature ensuring the final responsibility for the support of the judiciary in the independent delivery of justice.” Security of tenure of office is a core element of the independence of a judge and the dismissal of judges should be used only in case of misuse of the exercise of office (e.g. UN Basic principles on the Independence of Judiciary, Opinion para 95, 92, 63, Rec para 49 and 50). However, HSYK adopted a decision with only 62 pages of reasoning sufficient to dismiss thousands of judges. The decision is totally inadequate when the criminal investigations used as motive to sack those judges are still in a pre-trial stage; the principle of the presumption of innocence, which is enshrined in Article 5 of the European Convention for Human Rights (ECHR), was consequently completely ignored, if not violated.

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The Almaraz debate – it’s not in Spain, it’s not in Portugal, it’s all around…


by Sophie Perez Fernandes, Junior Editor

The risk society is a non-knowledge society. Ulrich Beck has long demonstrated that the explosion of the nuclear reactor at Chernobyl (26 April 1986) coincided with an «explosion of non-knowledge» in an entanglement that requires a rethinking of the conceptual and institutional constants of the modern world, such as the concepts of rights and human dignity, as well as those of sovereignty and state government[i].

On January 16, the Portuguese government filed a complaint to the European Commission against Spain concerning the construction of a nuclear waste storage facility at the Almaraz nuclear power plant (the news can be found here). Operating since the early 1980s, the Almaraz nuclear power plant is located along the Tagus River about 100 kilometres from Portugal, bordering the districts of Castelo Branco and Portalegre. The construction of the storage facility is intended to extend the operation of the Almaraz nuclear power plant, which has been presenting several problems, especially security problems. Portugal claims that there has been a violation of the EIA Directive, in addition to requesting the suspension of the construction of the Almaraz nuclear waste storage facility.

The EIA Directive – Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 – applies to the assessment of environmental effects of certain public and private projects which are likely to have significant effects on the environment. It updates 4 earlier directives (Directives 85/337/EEC, 97/11/EC, 2003/35/EC and 2009/31/EC) and applies from 17 February 2012. Furthermore, Directive 2011/92 has been amended in 2014 by the Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014. The revised EIA Directive entered into force on 15 May 2014 and Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with it by 16 May 2017. It should also be mentioned that safety of nuclear installations is also regulated by EU law, namely by the Council Directive 2009/71/Euratom of 25 June 2009 establishing a Community framework for the nuclear safety of nuclear installations (transposition deadline expired since 22 July 2011), amended by the Council Directive 2014/87/Euratom of 8 July 2014 (transposition deadline expires the 15 August 2017).

As stated above, Portugal claims that there has been a violation of the EIA Directive. The EIA procedure laid down in this directive can be summarized as follows: i) the developer (the applicant for authorisation for a private or public project which falls within the scope of application of the EIA Directive) may request the competent authority to say what should be covered by the EIA information to be provided (scoping stage); ii) the developer must provide information on the environmental impact (EIA report); iii) the environmental authorities and the public (and, as will be explained below, the eventually affected Member States) must be informed and consulted; iv) the competent authority decides, taken into consideration the results of consultations. The public is then informed of the decision taken and can challenge it before the courts.

Continue reading “The Almaraz debate – it’s not in Spain, it’s not in Portugal, it’s all around…”

R (Miller) v The Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin) : Realpolitik and the Revocation of an Article 50 TEU Notification to Withdraw


by John Cotter, Senior Lecturer at University of Wolverhampton Law School

The opening lines of a judgment – in common law jurisdictions, at least – can very often be revealing of a court’s concerns. The first five paragraphs of the collegiate High Court judgment (Lord Thomas CJ, Sir Terence Etherton MR and Sales LJ) in Miller indicate very clearly the judges’ worry that their judgment would be misunderstood by sections of the media and the wider public. This judgment did not have “any bearing on the question of the merits or demerits of a withdrawal of the [UK] from the [EU]”, the Court stated. Rather, the question before the Court was a narrow constitutional issue, and a purely legal matter: whether the government could use Royal prerogative powers to give notification of withdrawal from the EU pursuant to Article 50 TEU or whether this was a matter for the Houses of Parliament. On this question, the High Court ruled that the notification under Article 50 TEU may not be given by means of Royal prerogative; rather, such notification is a matter for Parliament exclusively. While the conducting of international relations and the signing of and withdrawal from international treaties were powers generally to be exercised by the executive on behalf of the Crown, the High Court reasoned that where withdrawal from a treaty would result in changes to domestic law (as withdrawal from the EU would), such withdrawal could not be effected without Parliament.

The Court’s attempt to avoid misinterpretation of its role appears, however, to have fallen on deaf or wilfully closed ears, with the judges being subjected to attacks in sections of the media that were astonishing even by the standards of Britain’s rather histrionic tabloid press (one publication’s front page contained the headline “Enemies of the People” along with photographs of the three judges). To many of those advocating Brexit, the judgment was an unelected court playing politics and frustrating the will of the people (even though the European Union Referendum Act 2015 had not provided that the referendum result be binding). To the Court’s defenders, the judgment was the latest in a line of rulings in which the courts upheld the supremacy of Parliament over Royal prerogative powers. It is certainly the case that the High Court judgment, if upheld by the Supreme Court (which is due to hear an appeal in early December), has the potential to make the giving of the Article 50 notification a more lengthy and complex process. It is conceivable that both Houses of Parliament could use their leverage to require the government to reveal more detail on their post-notification negotiating aims. However, as a matter of realpolitik, the judgment is unlikely prevent Article 50 being triggered: Labour, the largest opposition party in the Commons has indicated that it will not vote against a Bill to give notification under Article 50, and it is unlikely that the Lords would provoke further questions about their relevance in modern Britain by blocking Brexit.

Continue reading “R (Miller) v The Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin) : Realpolitik and the Revocation of an Article 50 TEU Notification to Withdraw”