Abuse of EU Law and Regulation of the Internal Market

How can the concept of abuse of European Union law – which can be defined as undesirable choice of law artificially made by a private citizen – generate so much disagreement among equally intelligent individuals? Seeking to transcend the classical debate between its supporters and adversaries, the present study submits that the concept of abuse of EU law is located on three major fault-lines of EU law, which accounts for the well-established controversies in the field. The first fault-line, which is common to all legal orders, opposes legal congruence (the tendency to yield equitable legal outcomes) to legal certainty (the tendency to yield predictable legal outcomes). Partisans of legal congruence tend to advocate the prohibition of abuses of law, whereas partisans of legal certainty tend to oppose it. The second fault-line is specific to EU law and divides two conceptions of the regulation of the internal market. If economic integration is conceived as the promotion of cross-border competition among private businesses (the paradigm of ‘regulatory neutrality’), choices of law must be proscribed as abusive, for they distort business competition. But if economic integration is intended to promote competition among Member States (the paradigm of ‘regulatory competition’), choices of law by EU citizens represent a desirable process of arbitrage among national laws. The third and final fault-line corresponds to the tension between two orientations of the economic constitution of the European Union, namely the fear of private power and the fear of public power. Those who fear private power most tend to endorse the prohibition of abuses of law, whereas those who fear public power most tend to reject it. Seen in this way, the concept of abuse of EU law offers a forum in which fundamental questions about the nature and function of EU law can be confronted and examined in a new light. In May 2013, the thesis that this book was based on won the First Edition of the European Law Faculties Association Award for Outstanding Doctoral Thesis. -- Foreword -- Lists of Tables and Figures -- Table of Cases -- Table of Legislation -- General Introduction: The Topicality of the Concept of Abuse of Union Law -- PART I: THE PHENOMENON OF ABUSE OF UNION LAW -- Introduction: A Dynamic Perspective on Abuses of Union Law -- 1. Identification of the Phenomenon of Abuse of Union Law -- I. Abuses Committed by Public Authorities -- II. Abuses Committed by Private Individuals -- A. Abuses Private-Private (including Abuses of Rights) -- B. Abuses Private-Public (including Abuses of Law) -- III. Abuses of Law and Abuses of Rights under Union Law -- IV. The Universality of the Prohibition of Abuses -- 2. The Formal Doctrine of Abuse of Union Law -- I. At the Legislative Origins of the Formal Doctrine of Abuse of Union Law -- II. Applications of the Formal Doctrine of Abuse in the Field of Export Refunds -- A. Emsland-Stärke (2000) -- i. Facts -- ii. Decision of the Court -- B. Vonk Dairy Products (2007) - i. Facts -- ii.Decision of the Court -- III. Applications of the Formal Doctrine of Abuse in the Field of VAT -- A. Halifax (2006) -- i. Facts -- ii. Decision of the Court -- B. Part Service (2008) -- i. Facts -- ii. Decision of the Court -- IV. Applications of the Formal Doctrine of Abuse in the Field of Direct Taxation -- A. Cadbury Schweppes (2006) -- i. Facts -- ii. Decision of the Court -- B. Thin Cap Group Litigation (2007) -- i. Facts -- ii. Decision of the Court -- V. Other Applications of the Formal Doctrine of Abuse in the Field of Free Movement -- A. Agip Petroli (2006) -- i. Facts -- ii. Decision of the Court -- B. ING. AUER (2007) -- i. Facts -- ii. Decision of the Court -- 3. Definition of the Concept of Abuse of Union Law -- I. The Basics: Abuse of Law as Gain-Seeking Choice of Law -- II. The Artificiality Requirement: Abuse of Law as Naked Choice of Law -- A. Artificiality as Economic Irrationality -- B. The Fallacy of Economic Reality -- III. The Teleological Assessment: Abuse of Law as Undesirable Choice of Law -- IV. The Sanction: Denying the Choice of Law 4. Typology of Union Law Reactions to Artificial Practices -- I. Informal Doctrines of Abuse of Law -- II. Suspect Periods -- III. Centres of Gravity -- A. Centre of Gravity Approaches for Legal Persons (Real Seat Theory) -- i. Applications of the 'Real Seat Theory' in Union Law -- ii. 'Output' versus 'Input' Centre of Gravity -- B. Centre of Gravity Approaches for Natural Persons (Habitual Residence and Genuine Integration Requirements) -- i. 'Habitual Residence' Requirements -- ii. The 'Genuine Integration' Requirement -- IV. Incidental Prevention of Artificial Practices -- V. Free Choice of Law -- 5. Abuse of Union Law and Legal Certainty -- I. The Trade-off between Legal Certainty and Legal Congruence -- A. The Universality of the Trade-off between Legal Certainty and Legal Congruence -- B. The Trade-off between Legal Certainty and Legal -- Congruence in Union Law -- II. Legal Certainty as Source of Abusive Practices -- A. Abuses of Rigid Union Laws -- B. The Congruence Gap as Room for Abusive Practices III. The Fight against Abusive Practices as Source of Legal -- Congruence -- A. The Legal Uncertainty Inherent to the Doctrine of Abuse -- B. Fighting Abusive Practices by Enacting Flexible -- Legal -- Norms -- Conclusion: The Certainty of Abuse and the Illusion of Legal Certainty -- PART II: ABUSES OF UNION LAW AND ECONOMIC INTEGRATION -- Introduction: The Ambivalent Notion of Free 'Movement' -- 6. The Competing Paradigms of Economic Integration -- I. The Function of Local Laws in a Process of Economic -- Integration -- II. The Paradigm of Regulatory Neutrality: Economic Integration as Business Competition -- III. The Paradigm of Regulatory Competition: Economic -- Integration as State Competition -- 7. Dilemmas in the Regulation of the Internal Market -- I. Protectionism -- II. Multiple Regulation -- III. The Eventuality of Positive Harmonisation -- IV. The Negative Harmonisation Conundrum -- A. Home Regulation and Host Regulation -- B. The Negative Harmonisation Conundrum -- C. Addressing the Negative Harmonisation Conundrum -- V. The Regulatory Mobility Dilemma -- A. Regulatory Immobility under Multiple Regulation and Union Regulation -- B. Regulatory Mobility under Home Regulation and -- Host Regulation -- C. Addressing the Regulatory Mobility Dilemma -- VI. Synthesis: The Trade-off between -- Regulatory Neutrality and Regulatory Competition -- 8. Reviewing Practical Issues of Free Movement Law -- I. The Ambivalent Status of Differentials of Regulation -- II. The Acceptance of Reverse Discriminations -- III. The Inconsistent Prohibition of Abuses of Union Law -- IV. The Ambiguity Towards Social Dumping xii Table of Contents -- 9. State Aids and Economic Integration -- I. The State Aids Regime between Regulatory Neutrality and Regulatory Competition -- II. Reviewing the Classical Definition of 'State Aid' under Union Law -- III. The Functional Parallelism between Prohibition of Abuses of Law and Prohibition of State Aids -- 10. Abuse of Union Law and the Economic Constitution of the European Union -- I. The Notion of Economic Constitution of the European Union -- II. Historical Conditions of the Emergence of the Phenomenon of Abuse of Union Law -- III. The Rise of a New Form of Private Power Originating in Mobility -- IV. Dealing with Private Mobility-Power -- Conclusion: One (Internal Market) Law, Two Competitions -- General Conclusion: The Concept of Abuse of Union Law as a Privileged Forum for Thinking about Union Law -- Annex -- Bibliography -- Index How can the concept of abuse of European Union law - which can be defined as undesirable choice of law made by a private citizen - generate so much disagreement among equally intelligent individuals? Seeking to transcend the classical debate between its supporters and adversaries, this title submits that the concept of abuse of EU law is located on three major fault-lines of EU law, which accounts for the well-established controversies in the field Transcending the classical debate between its supporters and adversaries, this book submits that the concept of abuse of EU law is located on three major fault-lines of EU law, which accounts for the well-established controversies in the field Published version of EUI PhD thesis, 2012