European Court of Justice reminds EU nations of their compliance obligations
News on 19 Jul 2012
News on 19 Jul 2012
In two separate judgements this week the European Court of Justice has reminded EU Member States Poland and Latvia of their obligation to comply with EU laws.
In the case of Poland, national lawmakers failed to notify draft legislation on internet gambling to the European Commission, whilst on Latvia the court expressed concern regarding that nation’s restrictions on the freedom of other Member States to provide gambling services.
The Polish case arose from C-213/11, C-214/11, C-217/11 – also known as the Fortuna case. The ECJ considered whether a law was enforceable when it had not been referred in draft form to the European Commission during the legislative process and under the procedure prescribed by Directive 98/34.
The court noted that the case casts serious doubts on the respect by Polish authorities of important procedural EU rules when adopting the 2010 Gambling Act, and its findings included:
* The provisions at stake “are capable of constituting ‘technical regulations’…drafts of which must be the subject of communication”
* It is to the national judiciary to establish “those provisions that constitute conditions which can significantly influence the nature or the marketing of the product”
* The European Parliament was alerted in 2010 to the Polish Gambling Act regarding issues of compliance with EU law, including the lack of notification; consequently the Petition Committee questioned the European Commission and issued a report in 2011.
The Latvian Garkalns case (C-470/11) questioned whether the gambling law, which allows Latvian authorities to restrict the market on the particularly broad grounds of ‘substantial impairment of the interests of the State and of the residents of the administrative area concerned’, is compatible with the European Treaty.
The ECJ found that:
* Such restrictions; “must be based on objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise by the authorities of their discretion so that it is not used arbitrarily”
* It is also necessary for the competent authorities to base each of their decisions on reasoning which is accessible to the public, stating precisely the reasons for which, as the case may be, authorisation has been refused”
* For the national courts to ensure … that legislation genuinely meets the concern to reduce opportunities for gambling and to limit activities in that domain in a consistent and systematic manner.
* It is therefore for the national court to verify, in particular, that the State strictly supervises the activities related to betting and gaming; that the refusal of the local authorities to authorise the opening of new establishments of that type genuinely pursues the declared objective of protecting consumers; and that the criterion of ‘substantial impairment of the interests of the State and of the residents of the administrative area concerned’ is applied without discrimination.
Sigrid Ligné, secretary general of the internet gambling trade group European Gaming and Betting Association, said that the ECJ has reconfirmed that Member States are required to notify draft gambling legislation.
“If they fail to do so, the legislation can´t be enforced against operators. Likewise, we are satisfied that the Court firmly recalls that restrictions to the market can only be justifiable subject to strict conditions.”
Ligné added: “What is worrying is that these are well known and longstanding requirements that Member States should, but many do not comply with. As recently confirmed by Commissioner Barnier, Member States’ compliance with European rules is essential.
“The Commission has acknowledged that in addition to the 9 pending infringement procedures, 28 complaints against 12 Member States will now be investigated. We are confident that the Commission will take appropriate legal action.”
