Free movement of capital: infringement proceedings against the United Kingdom on BAA plc are closed
European Commission - IP/04/1234 15/10/2004
Brussels, 15th October 2004
The European Commission has decided to close infringement procedures against the United Kingdom for its failure to comply with a Court of Justice ruling of 13 May 2003 on British Airports Authority (BAA). The ruling (Case C-98/01) had found that, by maintaining in force provisions limiting the possibility of acquiring voting shares in BAA plc, as well as the procedure requiring consent to the disposal of the company's assets, to control of its subsidiaries and to winding-up, the United Kingdom failed to fulfil its obligations under EC Treaty rules on the free movement of capital (Article 56). The decision to close this case follows the notification by the United Kingdom of additional measures, taken on 27 July 2004, to ensure compliance with the Court ruling.
In the absence of notification from the United Kingdom that it had taken the measures necessary to implement fully the ruling of the Court, a letter of formal notice under Article 228 of the Treaty was delivered to the United Kingdom on 7 January 2004 (see IP/04/17). The grounds were that the Articles of Association of British Airports’ Authority plc. still provided for a restriction on the acquisition of stakes carrying voting rights of more than 15% in the company (Article 40) and that the requirement for prior approval by the authorities for operations involving the winding up of the company, disposal of assets, control of subsidiaries (Article 10.2) had not been modified.
On 27 July 2004, the Annual General Meeting of BAA plc agreed to amendments to the Articles of Association of the company to cancel the UK Government’s special share (which was redeemed in October 2003) and to reduce BAA's authorised share capital accordingly. It also agreed to delete Article 10 and Article 40 of the Articles of Association of the company. These amendments address the outstanding issues raised by the Commission.