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TRIS procedure further clarified by the Court of Justice in two recent rulings of 8 October 2020

23/11/2020
TRIS procedure further clarified by the Court of Justice in two recent rulings of 8 October 2020
Photo: symbiot/shutterstock.com

The Court of Justice of the EU has shed light on Directive 2015/1535 (TRIS) in two recent rulings of 8 October 2020. They explain when a national law triggers the notification procedure and clarify the interrelationship with a notification under another piece of EU law.

 

Barriers to trade in the EU single market, the 2015/1535 notification procedure, and the TRIS database

The free movement of goods and services lies at the core of the European project, but its smooth functioning can be disturbed by national regulation. Barriers to trade might arise from a Member State’s initiative to regulate the technical aspects of a product or an online service – a so-called “technical regulation”.

To create transparency and to ensure the compatibility of these national initiatives with EU law and the internal market principles, a notification procedure was set up under Directive (EU) 2015/1535 of 9 September 2015 (“Notification Directive”), which originally started back in 1983.

EU countries must inform the Commission of any draft technical regulation before its adoption. The Commission passes on this information to the Member States through the technical regulations information system (TRIS); an open-access database. What follows is a three-month standstill period during which adoption of the national law is suspended. This allows the Commission and the other EU countries to examine the proposed initiative and respond. In brief, four different types of responses are possible: (1) no reaction, (2) comments, (3) a detailed opinion, which launches a dialogue and extends the standstill, or (4) postponement, if the Commission announces its intention to propose a directive, regulation or decision on the matter. Interested third parties can also comment via the TRIS database but this has no direct legal effect.

In other words, the Notification Directive creates a form of EU control - by the Commission and other Member States - over draft national regulations. Furthermore, a breach of the obligation to notify may result in the technical regulation being declared inapplicable by the national courts of the Member State in question (Judgment of the Court of 30 April 1996 in Case C-194/94). Therefore, notification is mandatory and the stakes can be high.

On 8 October 2020, the Court of Justice of the European Union delivered two rulings that deal with the Notification Directive. C-711/19 - Admiral Sportwetten and Others has dealt with the definition of a ‘technical regulation’, which is crucial because it is the triggering point for the notification procedure. C-514/19 - Union des industries de la protection des plantes concerns the interrelationship between the notification under Article 5 of the Notification Directive and the notification under Regulation (EC) 1107/2009 on plant protection products. It is important to know if a notification under the Notification Directive precludes the Member States from relying on a procedure in another piece of EU law.

 

C-711/19 - Admiral Sportwetten

An Austrian law issued a new tax on the operation of betting terminals in the territory of Vienna. Admiral Sportwetten and others who are active in the Viennese betting industry challenged the law by arguing that it was a ‘technical regulation’ and so required a prenotification under the Notification Directive.

The Court of Justice has reconfirmed that the concept of a ‘technical regulation’ covers four categories of measures: (i) technical specifications, (ii) other requirements, (iii) rules on services, and (iv) prohibitions. Furthermore, a technical regulation can follow from de jure or de facto compulsory observance.

The Court has considered the four categories, stuck closely to the definitions given to each in the Directive, and ruled that the Austrian law was not a technical regulation, meaning no notification was required.

Of particular interest is the Court’s finding regarding the second category i.e. the other requirements. The referring court had observed that part of the Austrian law’s purpose was to protect consumers, namely by inhibiting a certain type of betting. It cannot be ruled out, the referring court suggested, that the rule affects the marketing of betting terminals. In other words, it seems like the referring court was asking whether the national law could indirectly be brought into the scope of the Notification Directive because of its purpose or effect. The Court of Justice, however, was not convinced and stuck to a more literal definition. The Court appears to have deflected the argument that the tax could affect the marketing of betting terminals.

Although the Court of Justice has not explicitly tied the two together, it seems that the Court’s reasoning can be linked to its interpretation of a ‘de facto technical regulation’. The Court has previously held (C-98/14, 11 June 2015, Berlington Hungary) that tax legislation can only be described as a ‘de facto technical regulation’ if it is accompanied by a technical specification or other requirement with which it is purportedly intended to ensure compliance. Expressed another way, fiscal or financial measures can only be brought into the scope of the Notification Directive if they are linked to technical specifications or other requirements or rules on service. Indeed, the definition of a ‘de facto technical regulation’ in Article 1(1)(f) of the Notification Directive assumes a link or reference to technical specifications, other requirements or rules on service. In the case of the Austrian law, there was no link, just a tax.

In conclusion, a national law will only qualify as a ‘technical regulation’ under Directive 2015/1535 if it fits within one of the four predefined categories. The Court appears to have deflected the argument that the Austrian law could indirectly be brought into the scope of the Notification Directive. Furthermore, to qualify as a ‘de facto technical regulation’, a law on its own (here, a tax rule) will not qualify if it is not somehow linked to technical specifications, other requirements, or rules on services.

 

C-514/19 - Union des industries de la protection des plantes

France wanted to ban plant protection products (“PPP”) containing one or more active substances of the neonicotinoid family and seeds treated with those products. In February 2017, it notified a draft decree about that to the European Commission, which expressly referred to Directive 2015/1535 and not Regulation 1107/2009 on PPPs.

The Commission replied that it shared France’s concerns and subsequently issued three Implementing Regulations (2018/784, 2018/785 and 2018/786) prohibiting three neonicotinoids. Apparently, this was insufficient for the French government, which then adopted a decree prohibiting those three neonicotinoids in addition to two others. The French crop protection association (“UIPP”) did not agree with the French government’s action and sought annulment before the French Council of State.

The legal debate shifted to Regulation 1107/2009. Under Article 71 of that regulation the legality of the French decree could potentially be upheld as an emergency measure. Article 71, however, requires prior notification. The French government had only notified the draft under the Notification Directive and not under Regulation 1107/2009. Was this sufficient? How do the two relate?

The Court of Justice’s ruling has started by stating that the two notification procedures are thoroughly different. For example, their respective scopes of application are different, they do not have the same function and the consequences are not the same. However, in the words of Advocate General Kokott, “these considerations ultimately come to nothing”. The Court has pointed out that a notification under Article 71 of Regulation 1107/2009 has no real formal requirement and that the principles of sincere cooperation and sound administration put a duty on the EU Institution to scrutinise the relevant aspects. In other words, despite the differences in the two procedures and taking into account the detail of the information and evidence in the French government’s communication, it was really up to the Commission to ask the French government whether its communication should be treated as a notification under Regulation 1107/2009. The Commission did not ask and therefore, the Court held, the Commission was officially informed within the meaning of Article 71 of Regulation 1107/2009.

It is interesting how much slack the Court of Justice has given the French government here. As the Court has also confirmed, Article 71 of Regulation 1107/2009 is a safeguard clause (see Article 114(10) Treaty on the Functioning of the European Union). Article 7(1)(c) of the Notification Directive explicitly states that the notification procedure under that directive does not apply if a Member State makes use of a safeguard clause. Yet the French government chose to inform the Commission under the Notification Directive, which is thus ‘perpendicular’ to a notification under Article 71 of Regulation 1107/2009, which is a safeguard clause.

In conclusion, if a Member State notifies a draft decree under Directive 2015/1535, that communication can still qualify as a notification under a different piece of EU law, even if both notification procedures exclude each other, as in the case of a safeguard clause. If the information contained in the communication is sufficiently clear and substantiated, then it is up to the Commission to ask the Member State whether the communication should be processed under the other (potentially relevant) EU law. More specifically, issuing a notification under the Notification Directive, does not appear to preclude the Member State from relying on a procedure in another piece of EU secondary law, here Regulation 1107/2009.

 

Conclusion

The free movement of goods and services lies at the core of the European project, but national regulations can frustrate its smooth functioning. To anticipate and prevent the creation of barriers to trade, a Member State’s initiative to regulate the technical aspects of a product or an online service – a ‘technical regulation’ - must be notified to the Commission, who then passes on this information to the Member States and the general public via the TRIS-database (Notification Directive (EU) 2015/1535). A standstill period follows during which the Commission and the other EU countries can examine and respond to the proposed initiative.

On 8 October 2020, the Court of Justice of the European Union delivered two rulings that have shed light on the workings of the Notification Directive.

C-711/19 - Admiral Sportwetten has dealt with the definition of a ‘technical regulation’, which is crucial because it is the triggering point for the notification procedure. The Court has reconfirmed that a national law will only qualify as a ‘technical regulation’ under Directive 2015/1535 if it fits within one of the four predefined categories. Furthermore, to qualify as a ‘de facto technical regulation’, a law on its own (here, a tax rule) will not qualify if it is not somehow linked to technical specifications, other requirements, or rules on services.

C-514/19 - Union des industries de la protection des plantes concerns the interrelationship between a notification under the Notification Directive and a procedure in another piece of EU law. The Court has clarified that if a Member State notifies a draft decree under Directive 2015/1535, that communication can still qualify as a notification elsewhere. If the information contained in the communication is sufficiently clear and substantiated, then it is up to the Commission to ask the Member State whether the communication should be processed under the other EU law. Concretely, issuing a notification under the Notification Directive does not appear to preclude the Member State from relying on a procedure in another piece of EU secondary law.

If you would like more information about the significance of these recent rulings, please contact Philippe de Jong (philippe.deJong@altius.com) or Bregt Raus (bregt.raus@altius.com).

Contact

Bregt Raus

Associate

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