Article 16 - Freedom to conduct a business
Article 52 - Scope and interpretation
Key facts of the case:
Request for a preliminary ruling from the Hanseatisches Oberlandesgericht Hamburg.
Reference for a preliminary ruling – Commercial policy – Regulation (EC) No 2271/96 – Protection against the effects of the extraterritorial application of legislation adopted by a third country – Restrictive measures taken by the United States of America against Iran – Secondary sanctions adopted by that third country preventing persons from engaging, outside its territory, in commercial relationships with certain Iranian undertakings – Prohibition on complying with such a law – Exercise of the right of ordinary termination.
Outcome of the case:
On those grounds, the Court (Grand Chamber) hereby rules:
33) However, it considers that neither a recovery claim provided for in Article 6 of that regulation, nor the possibility of the issue of an authorisation to comply with the sanctions provided for in the second paragraph of Article 5 of that regulation is sufficient compensation for the risk of economic loss. Having regard to the objective pursued by that regulation, which is to prevent the application of secondary sanctions to EU economic operators, that authorisation would be issued rather restrictively. Consequently, the risk of economic loss alone would not suffice to obtain such authorisation. In those circumstances, the referring court wonders whether, in circumstances where there is a risk of substantial economic loss on the United States market, the general prohibition, laid down in Regulation No 2271/96, on an undertaking separating from a trading partner is compatible with the freedom to conduct a business protected by Article 16 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and the principle of proportionality enshrined in Article 52 thereof.
34) In those circumstances, the Hanseatisches Oberlandesgericht Hamburg (Higher Regional Court, Hamburg, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
50) The interpretation of the first paragraph of Article 5 of Regulation No 2271/96 set out in paragraph 45 of this judgment is not, for the remainder, incompatible with the complementary objective of Regulation No 2271/96 consisting of protecting the interests of the persons referred to in Article 11 of the regulation, including their freedom to conduct a business which is a fundamental freedom enshrined in Article 16 of the Charter and which, according to the Court’s case-law, covers the freedom to exercise an economic or commercial activity, the freedom of contract and free competition (judgment of 16 July 2020, Adusbef and Others, C‑686/18, EU:C:2020:567, paragraph 82). It must be observed that those interests, which may be threatened by the measures to which those persons in the third countries concerned are exposed if they do not comply with the laws specified in the annex are duly protected by virtue of the second paragraph of Article 5 of that regulation, which must be interpreted in the light of that objective.
69) By its third and fourth questions, which it is appropriate to examine together, the referring court asks, in essence, whether Regulation No 2271/96, in particular Articles 5 and 9 thereof, read in the light of Articles 16 and 52 of the Charter, must be interpreted as precluding the annulment of a termination of contracts effected by a person referred to in Article 11 of that regulation in order to comply with the requirements or prohibitions based on the laws specified in the annex, when he or she does not have an authorisation within the meaning of the second paragraph of Article 5 of that regulation, where that person risks suffering substantial economic loss as a result of that annulment.
70) At the outset, it should be recalled that the provisions of EU law, such as those of Regulation No 2271/96, must be interpreted in the light of fundamental rights which, according to established case-law, form an integral part of the general principles of law whose observance the Court ensures and which are now set out in the Charter (see, to that effect, judgment of 25 May 2016, Meroni, C‑559/14, EU:C:2016:349, paragraph 45).
77) However, such an annulment entails a limitation on the freedom to conduct a business enshrined in Article 16 of the Charter.
79) The protection afforded by Article 16 of the Charter covers the freedom to exercise an economic or commercial activity, freedom of contract and free competition (judgment of 16 July 2020, Adusbef and Others, C‑686/18, EU:C:2020:567, paragraph 82 and the case-law cited) and covers, in particular, the freedom to choose with whom to do business and the freedom to determine the price of a service (judgment of 15 April 2021, Federazione nazionale delle imprese elettrotecniche ed elettroniche (Anie) and Others, C‑798/18 and C‑799/18, EU:C:2021:280, paragraph 57).
81) Having regard to the wording of Article 16 of the Charter, which provides that the freedom to conduct a business is recognised in accordance with EU law and national laws and practices and thus differs from the wording of the other fundamental freedoms laid down in Title II thereof, yet is similar to that of certain provisions of Title IV of the Charter, that freedom may therefore be subject to a broad range of interventions on the part of public authorities which may, in the public interest, limit the exercise of economic activity (see, to that effect, judgment of 22 January 2013, Sky Österreich, C‑283/11, EU:C:2013:28, paragraph 46).
82) That circumstance is reflected, in particular, in the way in which EU legislation and national legislation and practices should be assessed in the light of the principle of proportionality under Article 52(1) of the Charter (see, to that effect, judgment of 22 January 2013, Sky Österreich, C‑283/11, EU:C:2013:28, paragraph 47).
83) In accordance with Article 52(1) of the Charter, any limitation on the exercise of the rights and freedoms recognised by the Charter must be provided for by law and respect the essence of those rights and freedoms and, in compliance with the principle of proportionality, must be necessary and actually meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others (judgment of 22 January 2013, Sky Österreich, C‑283/11, EU:C:2013:28, paragraph 48).
95) In the light of all the foregoing, the answer to the third and fourth questions is that Regulation No 2271/96, in particular Articles 5 and 9 thereof, read in the light of Article 16 and Article 52(1) of the Charter, must be interpreted as not precluding the annulment of termination of contracts effected by a person referred to in Article 11 of that regulation in order to comply with the requirements or prohibitions based on the laws specified in the annex, even though that person does not have an authorisation within the meaning of the second paragraph of Article 5 of that regulation, provided that that annulment does not entail disproportionate effects for that person having regard to the objectives of that regulation consisting in the protection of the established legal order and the interests of the European Union in general. In that assessment of proportionality, it is necessary to weigh in the balance the pursuit of those objectives served by the annulment of the termination of a contract effected in breach of the prohibition laid down in the first paragraph of Article 5 of Regulation No 2271/96 and the probability that the person concerned may be exposed to economic loss, as well as the extent of that loss, if he or she cannot terminate his or her commercial relationship with a person included in the list of persons covered by the secondary sanctions at issue resulting from the laws specified in the annex.