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Treaty Competences for Harmonisation - Case Study Example

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This paper "Treaty Competences for Harmonisation" discusses Harmonisation that has become one of the most notable legislative and administrative activities of the EU Commission especially, and the legislative bodies' institutions of the European Community (EC)…
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Treaty Competences for Harmonisation
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Minimum harmonisation enables member s to maintain more stringent regulatory standards than those prescribed by Community standards, provided that these are compatible with the treaty. The community legislation sets a floor, and the treaty a ceiling, with member states free to pursue their own policies within these boundaries. There is evidence that the Commission now favours maximum harmonisation, at least in areas such as consumer policy.” Discuss Introduction Harmonisation has become one of the most notable legislative and administrative activities of the EU Commission especially, and the legislative bodies institutions of the European Community (EC). The history of integration within the EC is inextricably bound with the harmonisation project of the EC. Traditionally, the rationale for harmonisation of laws in the European Community has been to level divergent national laws by bringing them into common accord with Community objectives. Certainly, the main objective of the Community’s harmonisation project is to create an internal (single or common) market within the EC. Article 3(1)(c) EC sets as a fundamental objective of the Community, the establishment of “an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital”. The Treaty requirements for the abolition of the obstacles to the operation of the four freedoms – free movement of goods, services, persons, and capital – provide the broad policy objective for the establishment of a working single market in the EC. Treaty Competences for Harmonisation These broad Treaty provisions alone are however not enough to facilitate the abolition of obstacles and the realisation of an internal market devoid of national regulatory obstacles and divergences. Recognising this, the EC Treaty provides for the institutions of the Community to make regulations and to take measures aimed at approximating the laws of the Member States of the Community to fit into the internal market objective. Article 94 EC thus provides that: “The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market.” The unanimity requirement in Article 94 however presents problems of agreement in the legislative activities of the Community institutions. Consequently, Article 95 EC allows for a derogation from the unanimity requirements of Article 94 and thus allows the Community legislative institutions, through the procedure of co-decision and qualified majority vote in the Council, to make regulations, directives, or decisions that aim at harmonising the laws, regulations, and administrative provisions of Member States to bring them into agreement with the Community’s common market objectives. Despite the Treaty competencies given to the Community institutions to make harmonisation measures, the Community is expected to act within the ambit of the authority given to it by the Treaty. Article 3(1)(h) EC empowers the Community to adopt harmonisation measures “to the extent required for the functioning of the common market” and Article 5(1) EC further provides the ‘constitutional’ basis for the acts of the Community institutions. It states in relevant part that: “The Community shall act within the limits of the powers conferred upon it by this Treaty and of the objectives assigned to it therein. (…) Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.” Thus, measures taken by the Community institutions aimed at harmonising divergent national regulatory systems must be undertaken in proportionality to the objectives of the internal market project of the EC. Stephen Weatherill has however observed that: “The EC’s programme of harmonisation has affected ever wider areas of regulatory activity – consumer protection, environmental protection, labour market regulation, and, to an increasingly evident degree even the law of contract and tort.”1 The question of how far Community harmonisation should go in the effort to create a working common market in the EC is thus not just a pertinent one, but perhaps more importantly, a ‘constitutional’ issue within the EC. Citing as an example the extensive harmonisation programme embarked on after the coming into force of the Single European Act, P. J. Slot is however of the opinion that “the need for harmonisation increases as the integration of the market proceeds”.2 (379) In analysing the issue of harmonisation in the EC, one must be careful to note the distinction between harmonisation and unification. P. J. Slot states that the harmonisation project of the Community must not be viewed as an attempt to achieve a single legal system within the Community.3 He further observes that the preferred legal instruments used by the Community in its harmonisation programme have been directives. Directives only bind Member States with regards to the result to be achieved, but leaves the choice of form and methods of legal or administrative norms to be used in achieving these end results to the Member States of the Community. Different Forms of Harmonisation The harmonisation programme of the Community either addresses national legislation or national control procedures.4 The Community adopts various forms of harmonisation techniques to in its harmonisation programme – total harmonisation, optional harmonisation, partial harmonisation, minimum harmonisation, alternative harmonisation, and mutual recognition of national rules.5 Brief overviews of these different forms of harmonisation techniques are presented beneath. Under total harmonisation, Member States of the Community are not given any leeway as to the method of applying the Community norms. Since Community ‘regulations’ have general applications, are binding in their entirety, and are directly applicable in all Member States of the Community6, it would be the most preferred form to be adopted in total harmonisation. Total harmonisation is normally used when addressing policy areas where there are no national laws and as such the Community is setting the pace. With optional harmonisation, a manufacturer may be given the option to either adopt a national rule or the Community’s harmonised rule. Where a manufacturer is trading domestically, this may be allowed under optional harmonisation (i.e. by using the national rule). However, if the manufacturer’s products are meant for supply in the common market, then the harmonised rule should be adopted. Partial harmonisation is quite similar to optional harmonisation in that it allows the operation of two sets of rules – national rules and harmonised Community rules. The Community rule must apply in intra Community trade while the national rule national rule only applies in domestic trading. Minimum harmonisation has become a popular harmonisation technique of the Community especially after the coming into effect of the Single European ACT (SEA) in 1987 and the completion of the internal market imperatives that came with it.7 Under minimum harmonisation, Community rules set minimum standards that all national norms must comply with. National norms can however set standards or make rules that are above the minimum standards set at the Community level. The higher standards set by national rules should however not prevent intra Community trade. Hence, once a product meets the minimum standards of a Community rule, it can be marketed anywhere in the Community. However, for manufacturers in states where their governments have decided to adopt standards, higher than the Community’s minimum standard, they are bound to comply with their national standards. As can be realised from the above, with the exception of total harmonisation, partial harmonisation and optional harmonisation can to some extent fit within the minimum harmonisation model. Another form of model used in facilitating the functioning of the internal market is the principle of mutual recognition. Under mutual recognition, once a product has been legally produced in one Member State, it can be traded anywhere on the Community’s internal market once they complied with “… mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the customer”.8 Thus even in minimalist forms of harmonisation, it appears consumer protection normally becomes an exception as witnessed above in the mutual recognition principle where consumer protection is a mandatory requirement. The Commission’s Current Stance on Harmonisation in Consumer Policy Increasingly, the need to protect consumers in the Community has been at the forefront of the Commission’s consumer policy. Currently, the Community adopts a minimum harmonisation policy in consumer policy.9 The adoption of maximum harmonisation is however one of the options under consideration by the Commission which could bring into effect, a framework directive on fair commercial practices that would replace a host of existing legislations that are deemed inadequate in the current exigencies of consumer protection. The following are some of the current consumer protection legislations in force that are currently being reviewed by the Commission in its bid to implement higher levels of consumer protection policies within the internal market – the Doorstep-Selling Directive (Council Directive 85/577), the Package Travel Directive (Council Directive 90/314), the Unfair Contract Terms Directive (Council Directive 93/13), the Timeshare Directive (Directive 94/47), the Distance-Selling Directive (Directive 97/7), the Price Indication Directive (Directive 98/6), the Injunctions Directive (Directive 98/27), and the Sale of Consumer Goods Directive (Directive 1999/44).10 The EU Commission’s Consumer Policy Strategy 2002-2006 for instance had the following as its objective: “A high common level of consumer protection; effective enforcement of consumer protection rules; and involvement of consumer organisations in EU policies.”11 The Commission’s proposed framework directive is also expected to bring about inter alia: Maximum harmonisation with a high level of consumer protection. Simplification and, where possible, deregulation of existing provisions. Application of the principle of mutual recognition and control by the country of origin. A balance between legal certainty and adaptability to market circumstances. … legislation … based on the wider concept of ‘fair commercial practices’ and not only the narrower concept of ‘misleading practices’. A framework directive … based on a general clause, which could consist of two core elements: the unfairness of the practice; and a “consumer detriment test”.12 It is evident from the above that maximum harmonisation is just one of the harmonisation techniques that the Commission is proposing in its framework directive on fair commercial practices. There is for instance room for the principle of mutual recognition to exist. However, as discussed above, the principle of mutual recognition operates in a way that allows Member States of the Community to adopt higher national standards than what pertains at the Community level, once such standards are do not contravene Community norms or act as a disguised barrier to intra Community trade. Consequently, the Commission’s preference for inter alia, a mixture of maximum harmonisation at the Community level where a high standard of consumer protection policy is adopted and the mutual recognition principle, which allows national norms to be set higher than Community norms, is a portrayal of the Commission’s drive towards ensuring very high consumer protection standards in the internal market. It is thus possible that the Commission’s maximum harmonisation in consumer protection policy can become the Community’s minimum standard, with the application of mutual recognition making room for national consumer protection policies to adopt higher standards. Conclusion Whereas the need for consumer protection is important in ensuring consumer confidence in the internal market, a lack of which will affect the proper functioning of the market, it is important for Community action to be exercised in accordance with the principles of proportionality and subsidiarity. The need to create a balance between the need for consumer protection at the Community level and the effectiveness of already existing norms at the national level is succinctly put forward in the UK government’s position on the Commission’s proposed framework directive on fair commercial practices: “… maximum harmonisation worked well in the Unfair Commercial Practices Directive and our general view is that where action is required to remove barriers to the Single Market, maximum harmonisation of some detailed consumer protection law (at a sensible level) or the establishment of full mutual recognition of national laws may be necessary. The UK would however want to balance the retention of our own strong levels of consumer protection against the benefits of a clear consumer framework across the Single Market.”13 Bibliography Communication from the Commission (2002), ‘Follow-up Communication to the Green Paper on EU Consumer Protection’, COM(2002) 289 Communication from the Commission concerning the consequences of the judgment given by the Court of Justice on 20 February 1979 in Case 120/78 (Cassis de Dijon)’Official Journal of the European Communities, No C 256/2, 3.10.80 Craig, P. and de Búrca, G. (2003) EU Law: Text, Cases, and Materials, Oxford: Oxford University Press Dickie, J. (2003) ‘The European Commission’s Consumer Policy Strategy 2002-2006: A Critique’, 3, Web Journal of Current Legal Issues, http://webjcli.ncl.ac.uk/2003/issue3/dickie3.html (Accessed on 27/03/08) House of Commons Hansard (February 8 2007), ‘Select Committee on European Scrutiny Twelfth Report: Green Paper on Consumer Law’ http://www.publications.parliament.uk/pa/cm200607/cmselect/cmeuleg/41-xii/41xii13.htm (Accessed on 27/03/08) Slot, P. J. (1996) ‘Harmonisation’, European Law Review, 21, pp. 378-397 Weatherill, S. (2005) ‘Harmonisation: How Much, How Little?’, European Business Law Review, pp. 533-545 Read More
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