Case C-221/11 Leyla Demirkan: introducing ‘regressive interpretation’ for Association Agreements

On the 24th of September the CJEU delivered its judgement in the Demirkan case. Ms Demirkan, a Turkish national, had requested a short-term tourist Visa to German authorities to go and visit her stepfather, a German national. However, since the German authorities rejected her request, Ms Demirkan attacked the decision arguing that on the basis of Article 41(1) of the Additional Protocol to the EU–Turkey Association Agreement she was entitled to enter Germany without a Visa because at the time of the conclusion of the Additional Protocol -1970- Turkish nationals did not need a Visa to enter Germany as tourists. On the basis of Ms Demirkan’s claim, the referring court in Berlin addressed two questions to the CJEU. First, it asked whether article 41(1) of the Additional protocol containing the ‘stand-still’ clause on restrictions related to the freedom of establishment and the freedom to provide services included the passive reception of services. Secondly, the referring court asked the CJEU whether a tourist traveling to visit family could be considered as a passive recipient of services when the purpose of traveling is personal and not economical. Advocate General Villalon in his Opinion delivered in April 2013, and commented on here, argued that the answer should be negative. In his Opinion the AG argued that Article 41(1) of the Additional Protocol at the centre of the controversy between Ms Demirkan and Germany should be interpreted in the light of the circumstances and objectives enshrined in the Association Agreement at the time of its conclusion, i.e. 1963, a time in which, also internally, the EU legal system only recognised the active freedom to provide services and not the passive form. Without fully adhering to the ratio decidendi of the AG, the CJEU reached the same conclusion and held that “[t]he notion of ‘freedom to provide services’ in Article 41(1) of the Additional Protocol signed in Brussels on 23 November 1970 and concluded, approved and confirmed on behalf of the Community by Regulation (EEC) No 2760/72 of 19 December 1972 must be interpreted as not encompassing freedom for Turkish nationals who are the recipients of services to visit a Member State in order to obtain services”. As the AG Opinion was already the object of another post, this commentary will essentially focus on the CJEU decision.

 It is well established in EU law that the freedom to provide services codified in Article 56 TFEU comprises the passive freedom to receive services.  This was made express in Directive 73/148 Article 1(b)  (now repealed) and subsequently held in Joined Cases 286/82 and 26/83 Luisi & Carbone. More specifically, the CJEU in Luisi & Carbone held that the passive freedom to receive services is the ‘necessary corollary’ of the freedom to provide services. According to the existing case law, persons travelling for business, medical treatment and education are to be considered passive recipient of services protected by article 56 TFEU. More interestingly, in case C-274/96 Bickel and Franz the CJEU went as far as affirming that article 56 TFEU also protects those who visit another Member State where ‘they intend or are likely to receive services’. Therefore, the passive freedom to provide services not only covers the situation of individuals purposively traveling to receive a service, but also covers the situation of individuals like Bickel and Franz or Mr Cowan who did not move within the internal market to receive a specific service, but were considered as services recipient nonetheless.

Moving to the Demirkan case, the CJEU was asked whether the notion of services recipient valid internally could be translated to the notion of freedom to provide services enshrined in article 41(1) of the Additional Protocol. While reaffirming that “the principles enshrined in the provisions of the Treaty relating to freedom to provide services must be extended, so far as possible, to Turkish nationals” (Joined cases C-317/01 Abatay and Others), the CJEU held in Demirkan that the standstill clause of Article 41(1) is applicable only in connection to the exercise of an economic activity. As a result of this, while the CJEU had the occasion to declare in C-228/06 Soysal and Savatli that Article 41(1) precluded the introduction of a VISA requirement for Turkish nationals willing to provide services in Germany if the said requirement was introduced after the signature of the Additional protocol, in Demirkan the CJEU introduced –for the first time in EU law- the distinction between active and passive freedom to receive services.

How does the CJEU justify the distinction between active and passive freedom to receive services in relation to the EU-Turkey Association Agreement? The CJEU develops two lines of arguments in this respect. First, the Court holds that the aim of the EU –Turkey Association Agreement does not envisage integration, but merely promotes the “continuous and balanced strengthening of trade and economic relations between the EU and Turkey”. This relation -which is purely economic according to the CJEU, cannot be construed so as to include the passive freedom to provide services. Secondly, the court considers that the interpretation of the notion of freedom to provide services within the context of the EU–Turkey Association Agreement must take into account the “temporal context of those provisions”. In this respect the court argues that, since internally the passive freedom to provide services only emerged in 1984 in the judgment of Luisi & Carbone, the Additional Protocol of 1970 and the Association Agreement of 1963 cannot be interpreted as including the passive freedom to provide services.

In my opinion, the decision of the CJEU appears questionable on a number of points. First, the temporal argument and the one based on the wording of the agreement appear as one main argument rather than two distinguished ones. In this respect the question that the CJEU failed to answer is the extent to which the evolution of EU-Turkey relations and the evolution of the EU legal system should have played a role in the interpretation of the Additional Protocol and the Association Agreement. In this respect it is striking that neither the AG nor the CJEU make reference to Article 28 of the Association Agreement where it is said that the long-term goal of the agreement is to enter accession talks. And even more striking is the fact that nowhere in the Opinion and the judgment it is mentioned that the EU and Turkey have a customs union since the first of January 1996 and that since 2005 Turkey is a candidate country of the EU, the only candidate country for which there is still a VISA regime applicable. Should not the status of ‘candidate country’ have influenced the interpretation of the Additional protocol and the Association Agreement? Should not the status of a ‘candidate country’ be sufficient to affirm that the EU-Turkey relationship go beyond economic relations? Not according to the CJEU; indeed the judgment is deprived of any reference to the evolution of the EU-Turkey relations. This particular aspect of the decision begs a question: to what extent can the CJEU fail to take into consideration the full scope of the bilateral relations of a candidate country with the EU when interpreting an agreement?

Secondly, the decision of the CJEU appears questionable also if one takes into consideration the case law pertaining to other instruments of external relations and neighbourhood policy such as Partnership and Cooperation Agreements (PCA); an external relations’ instrument that is weaker, in its scope and content, than an association agreement. An example of this is the Simutenkov case. In Simutenkov the CJEU was asked to interpret the scope of the rules pertaining to workers’ rights under the EU- Russia Partnership and Cooperation Agreement. In that case the CJEU did not hesitate to recognize direct effect to provisions of the PCA and to support its arguments by making reference to its case law on Association Agreements. Moreover, in Simutenkov the CJEU argued that even without being an association agreement concluded with a view to the gradual integration of a non-member state into the EU, the limited objectives of the PCA should not interfere with the interpretation of specific provisions of the agreement pertaining to the prohibition of discrimination on the basis of nationality for workers. Thus, while in Demirkan the limited objectives of the 1963 association agreement with Turkey prevented the CJEU to interpret the notion of freedom to provide services in the same manner as it applies internally, the limited scope of the PCA agreement was not considered as a limiting parameter for the interpretation of the EU-Russia agreement.

The criticisms raised in relation to the decision of the Court do not necessarily pertain to the result reached by the Court; rather, the issues touched by these short considerations pertain to the reasoning and the arguments used by the CJEU. Indeed it is submitted by the present author that the CJEU could have reached the same result with a less controversial argumentation. The CJEU could have easily upheld the notion of passive freedom to provide services also in relation to he EU-Turkey agreement. By doing so the CJEU would have contributed to the consistency and coherence of the EU external action when it comes to candidate countries and European associated states; moreover, by doing so the CJEU would have not have had to deconstruct a long-standing notion of EU law. Secondly, the CJEU could have balanced the interests at stake and the level of integration between the EU and Turkey in terms of proportionality and level of legislative approximation. For instance, it could have argued that although the Association Council has not regulated the freedom to provide services yet, there are some categories of services recipients that can benefit from the freedom and others that cannot. Instead, the CJEU made use of the VISA requirement –an administrative issue linked to the police powers of states- as a parameter to interpret the normative framework defining the EU-Turkey relations.

All in all, this case opens considerable questions and seems to confirm the emergence of the ‘selective associationism’ mentioned by the commentator of the AG Opinion to this case. But this case also fragments notions that were previously considered as unitary in EU law and introduces a questionable method to interpret agreements: a regressive method of interpretation of agreements that freezes normative notions and policy contexts to the time in which the agreement was signed. Moreover, the judgment departs from the approach used by the CJEU in other decisions pertaining to the EU-Turkey association agreement and the teleological approach used by the CJEU also in relation to PCA agreements. Future cases will hopefully bring more coherence and clarify this complicated jigsaw.

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