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Internal Market: infringement cases against the UK, Portugal, Denmark, Austria, Sweden and Finland

European Commission - IP/05/352   22/03/2005

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IP/05/352

Brussels, 22 March 2005

Internal Market: infringement cases against the UK, Portugal, Denmark, Austria, Sweden and Finland

The European Commission has decided to send a letter of formal notice asking the UK for full information on its execution of a European Court judgement requiring it to implement EU law on reorganisation and winding-up of insurance undertakings. It has also decided to ask Portugal formally, by means of a reasoned opinion, to remove a requirement for architects holding qualifications from other Member States to take an examination before they can practise in Portugal. Finally, the Commission has decided to issue reasoned opinions, the second stage of the infringement procedure, to Denmark, Austria, Finland and Sweden because their Bilateral Investment Treaties (BITs) with non-EU countries are incompatible with the EC Treaty. If no satisfactory reply to a reasoned opinion is received within two months, the Commission may decide to refer the Member States concerned to the Court.

Insurance: UK failure to implement EU law on the winding up of insurance companies

The European Commission has decided to send a letter of formal notice asking the UK for a full explanation of the measures it has taken to implement fully the European Court of Justice’s judgement (Case C-164/04, 18 November 2004) requiring the UK to write into national law Directive 2001/17/EC on the reorganisation and winding-up of insurance undertakings (“the Winding Up Directive”). The UK acknowledged that it had not at the time of the judgement informed the Commission of how the Directive had been written into national law in so far as the Lloyd's market and Gibraltar were concerned.

The UK government has since informed the Commission about legislative measures to ensure the implementation of the Directive in Gibraltar. Legislative work to apply the Directive to the Lloyd's market has been initiated and a public consultation document was published in December 2004. However, as that part of the legislation has not yet been enacted, the Commission must consider that the UK has still failed to fully implement the Directive. Should the UK not inform the Commission of the enacted legislation concerning Lloyd's, the Commission may decide to take the next step in the infringement proceedings (reasoned opinion) and if necessary after that to request the Court to impose a fine.

Under the Directive, where an insurance undertaking with branches in other Member States fails, the winding up process must be subject to a single bankruptcy proceeding initiated in the Member State where it has its registered office. The Directive is designed to guarantee protection of policyholders in such instances.

Professional qualifications: Portuguese requirement for architects qualified in other Member States to pass an examination breaches EU law

The Commission has decided to send Portugal a reasoned opinion over its recognition procedures for architecture qualifications issued in other Member States.

Directive 85/384/EEC requires Member States to recognise automatically and unconditionally architecture qualifications covered by the Directive and issued in other Member States. Each Member State must accord to holders of the relevant qualifications from elsewhere in the EU the same rights as those bestowed by its own equivalent national qualifications.

Nevertheless, holders of qualifications covered by the Directive must take an entrance exam before they are admitted to the Portuguese Institute of Architects (Ordem dos Arquitectos), membership of which is in practice necessary to work as an architect in Portugal. In the Commission’s opinion, this is in breach of the Directive and is a major barrier to architects with qualifications from elsewhere in the EU who wish to move to Portugal.

Portugal maintained in its reply to the letter for formal notice (first stage of the infringement procedure) that the requirement for an examination is not in breach of EU law. But the Commission contests this view and has therefore decided to pursue the case by sending a reasoned opinion.

If European law on the recognition of professional qualifications is not respected, qualified persons run the risk of not being able to exercise their right to practise their profession in any of the Member States. Moreover, if they block Europe-wide recognition of professional qualifications, the Member States are reducing the scope for their own citizens and their own firms to choose qualified people from other Member States to provide services on their territory.

Free movement of capital: Bilateral Investment Treaties signed with non-EU countries by Denmark, Austria, Finland and Sweden

The Commission has decided to send reasoned opinions to Denmark, Austria, Finland and Sweden because Bilateral Investment Treaties (BITs) they signed with non-EU countries before they joined the European Union are incompatible with the EC Treaty. Sweden has 17 such BITs, Finland eight, Austria six and Denmark one. BITs contain provisions permitting the free transfer of funds relating to investments between the signatory countries. In the Commission’s view these clauses cut across the EU Council of Ministers’ exclusive powers to adopt on behalf of the EU as a whole measures on the movement of capital to and from non-EU countries (by virtue of Articles 57.2, 59 and 60 of the EC Treaty).

Member States are obliged (according to Article 307 of the EC Treaty) to take all appropriate steps to eliminate such incompatibilities with the EC Treaty arising from international agreements they have concluded before their accession.

For the latest information on infringement procedures involving the Member States, please consult the following website:

http://ec.europa.eu/secretariat_general/sgb/droit_com/index_en.htm


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