Article 17 - Right to property
Article 16 - Freedom to conduct a business
Article 50 - Right not to be tried or punished twice in criminal proceedings for the same criminal offence
Article 51 - Field of application
Article 47 - Right to an effective remedy and to a fair trial
Article 15 - Freedom to choose an occupation and right to engage in work
In the light of the foregoing considerations, I propose that the Court should answer the questions raised by the Unabhängiger Verwaltungssenat des Landes Oberösterreich (Austria) to the following effect:
34) All the questions referred request interpretations of provisions of the Charter. The preliminary issue arises as to whether the Charter applies when a national court is judicially reviewing a national law, such as that at issue in the main proceedings, which derogates from rights conferred by European Union law.
35) This issue is addressed by Mr Zehetner, the Austrian, Netherlands, Polish and Portuguese Governments and the Commission. The four governments submitting observations on this question all consider that the Charter does not apply to the national law at issue in the main proceedings. Mr Zehetner and the Commission both take the opposite view.
36) I consider that the Charter does apply in relation to a national law that derogates from a fundamental freedom guaranteed by the Treaty.
37) The scope of application of the Charter is defined at Article 51(1) thereof, which provides that it applies to Member States ‘only when they are implementing Union law’.
38) Does the use of the term ‘implementing’ in Article 51 of the Charter limit the latter’s applicability to cases where a Member State is required to take specific positive action (for example, to transpose a directive) ( 7 ) in order to comply with EU law?
39) I do not think so.
40) I note that (predictably) there is a degree of linguistic variation in the texts of the Charter in different equally authentic languages. Thus, whilst the English text speaks of ‘implementing’, the German has ‘bei der Durchführung des Rechts der Union’ and the French ‘lorsqu’ils mettent en oeuvre le droit de l’Union’. The Spanish and Portuguese (for example) are broader (‘cuando apliquen el Derecho de la Unión’ and ‘quando apliquem o direito da União’, respectively). Against that background, one turns naturally to the explanations relating to the Charter, ( 8 ) which must, in accordance with the third subparagraph of Article 6(1) TEU and Article 52(7) of the Charter itself, be taken into consideration for the interpretation of the Charter. ( 9 ) These give the following guidance in relation to Article 51(1):
‘[a]s regards the Member States, it follows unambiguously from the case-law of the Court of Justice that the requirement to respect fundamental rights defined in the context of the Union is only binding on the Member States when they act in the scope of Union law’.
Four judgments of the Court are then cited: Wachauf, ERT, Annibaldi and Karlsson and Others. ( 10 )
41) In judgments postdating the entry into force of the Lisbon Treaty, the Court has confirmed that national legislation falling within the scope of European Union law must comply with the Charter and that ‘the applicability of European Union law entails applicability of the fundamental rights guaranteed by the Charter’. ( 11 ) The Court has therefore already clearly indicated that the test is whether the situation is one in which EU law applies (that is, one that falls ‘within the scope of EU law’) rather than (perhaps more narrowly) whether the Member State is ‘implementing’ EU law by taking specific positive action. ( 12 )
42) The case-law cited in the explanation relating to Article 51(1) of the Charter sheds helpful light on what ‘in the scope of Union law’ means. Wachauf and Karlsson and Others both concerned national rules that nuanced the application of EU regulations relating to the operation of the supplementary levy on milk. Some national rules were clearly required in order to complement the EU rules and, by adding detail, make them fully operational. Those national rules had therefore to comply with fundamental rights as recognised under EU law. By contrast, in Annibaldi the national legislation at issue (a regional law establishing a nature and archaeological park) clearly had nothing to do with the implementation (or indeed the operation) of any Community law relating to the common organisation of agricultural markets, to the environment or to culture; nor was there any other point of attachment to Community law.
45) ERT thus makes it clear that, where a Member State enacts a measure that derogates from a fundamental freedom guaranteed by the TFEU, that measure falls within the scope of Union law. The power to derogate from the fundamental freedom guaranteed by EU law in certain circumstances is a power that Member States retain and that EU law recognises; but the exercise of that power is circumscribed by EU law. When a court – be it a national court or this Court – reviews whether national legislation restricting the exercise of such a fundamental freedom falls within the Treaty derogation (and is thus permissible) that process of review is carried out by reference to, and under criteria derived from, EU law, not national law. Thus, for example, the rule of interpretation that such derogations are to be interpreted narrowly, and the application of the proportionality test to a derogation that is prima facie permissible, both derive from EU law itself. Because only a national derogating measure that complies with those EU law criteria will be permissible (otherwise, the Treaty freedom would prevail), it follows that the derogating measure itself falls within the scope of EU law. That to me is both the necessary consequence of the familiar Treaty structure (protected right, limited derogation from that right) and of the inclusion of ERT in the explanation to Article 51 of the Charter.
46) A Member State must therefore be regarded as ‘implementing Union law’ within the meaning of Article 51 when it puts in place a derogation from a fundamental freedom. It follows that the Charter applies. Since the national measure at issue in the main proceedings ‘implements’ EU law because it falls within the scope of EU law, it must be interpreted in the light of the Charter.
48) By its first question, the referring court asks whether Article 56 TFEU and/or Articles 15 to 17 of the Charter must be interpreted as precluding national legislation that restricts the right to organise games of chance using gaming machines to those persons or undertakings holding licences, which are available in limited numbers. More particularly, it asks whether the principle of proportionality is breached in circumstances where it is not established that crime and addiction to gambling constituted significant problems and that, if such problems did exist, they could not be remedied by controlled expansion of authorised gaming activities by a large number of individual providers instead of controlled expansion by a limited number of providers.
49) I shall first consider Article 56 TFEU and then the Charter.
63) Article 15(2) of the Charter ( 33 ) recognises the freedom of every citizen of the Union to exercise the right to establishment and to provide services in any Member State. The explanations relating to the Charter ( 34 ) confirm that Article 15(2) deals with the freedom of movement for workers, freedom of establishment and freedom to provide services guaranteed by Articles 26, 45, 49 and 56 TFEU. As provision for this freedom is made within the Treaties, its scope and interpretation is determined by Article 52(2) of the Charter, which states that such freedoms ’shall be exercised under the conditions and within the limits defined by those Treaties’. The explanation to Article 52(2) also confirms that ‘the Charter does not alter the system of rights conferred by the EC Treaty and taken over by the Treaties’. Thus, so far as the present proceedings are concerned, respect for Article 15(2) of the Charter is coterminous with compliance with Article 56 TFEU.
64) Article 16 of the Charter recognises the freedom to conduct a business but expressly states that this must be ‘in accordance with Union law and national laws and practices’. As the explanations relating to the Charter also confirm, this freedom may be subject to limitations that are permitted by Article 52(1) of the Charter. That article requires that 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.
65) In Sky Österreich ( 35 ) the Court confirmed that ‘the freedom to conduct a business may be subject to a broad range of interventions on the part of public authorities which may limit the exercise of economic activity in the public interest. That circumstance is reflected, inter alia, in the way in which Article 52(1) of the Charter requires the principle of proportionality to be implemented.’
67) Article 17 of the Charter recognises the right to property, the use of which ‘may be regulated by law in so far as is necessary for the general interest’. The explanation relating to this article says that it is based on Article 1 of the First Protocol to the ECHR. In accordance with Article 52(3) of the Charter, its meaning and scope are thus the same as those of the right guaranteed by the ECHR and, while limitations on the rights are permissible, they may not exceed those permitted by the ECHR.
68) The Court has also consistently held that the right to property may be subject to proportionate limitations. In Križan and Others, the Grand Chamber held that ‘the right to property is not an absolute right and must be viewed in relation to its social function. Consequently, its exercise may be restricted, provided that those restrictions in fact correspond to objectives of general interest and do not constitute, in relation to the aim pursued, disproportionate and intolerable interference, impairing the very substance of the right guaranteed’. ( 36 ) It follows that a proportionate restriction on the use of gaming machines in the general interest does not breach Article 17 of the Charter.
69) It seems to me that a restriction on the use of gaming machines that is permissible in accordance with Article 56 TFEU, which includes the requirement to satisfy the principle of proportionality, also respects Article 17 of the Charter. Such a limitation on the use of property does not exceed that permitted by Article 1 of the First Protocol to the ECHR, which makes the right to property subject to the ‘right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest’.
70) In my view, therefore, Articles 15 to 17 of the Charter impose no greater obligations to be satisfied for a restriction on the freedom to provide services to be permitted than is already established by the case law of the Court in relation to Article 56 TFEU.
71) For those reasons, I propose that the Court should answer the first question to the effect that Article 56 TFEU must be interpreted as precluding national legislation such as that at issue in the main proceedings under which only a limited number of licence holders may organise games of chance, unless that restriction is justified on the basis of an overriding objective in the public interest, such as consumer protection and/or the prevention of crime, pursues that objective in a consistent and coherent manner having regard to the commercial policies of the existing licence holders and is proportionate. Whether those criteria are satisfied are matters for the national court to determine. Where a restriction fulfils those criteria, it is not precluded by Articles 15, 16 or 17 of the Charter.
72) By its second question, the referring court asks whether the principle of proportionality laid down in Article 56 TFEU and Articles 15 to 17 of the Charter precludes national legislation, such as Paragraphs 52 to 54 and 56a of the GSpG and Paragraph 168 of the StGB, which, as a result of imprecise legal definitions, extends criminal liability to persons who are only very remotely involved (such as the mere sellers or lessors of gaming machines).
79) In my view, therefore, Article 56 TFEU and Articles 15, 16 and 17 of the Charter do not preclude a provision that extends criminal liability to persons who are directly or indirectly responsible for the breach of a restriction on providing gaming services, provided that the personal scope of criminal liability is limited to those persons who knew, or ought to have known, that their actions contributed to the breach.
80) By its third question the referring court asks whether Article 56 TFEU and/or Articles 16, 47 and 50 of the Charter and/or general principles of EU law preclude provisions of national law which impose either criminal or administrative sanctions for breaches of the law, but which do not enable a person to be sure in advance under which provisions he will be charged.
81) In my view, Article 50 of the Charter does not preclude such provisions. From the material placed before the Court, it does not appear that the suggestion that there is a risk of an offence being prosecuted twice is well founded. Either the offence is dealt with through the administrative courts, or it is dealt with through the criminal courts. It appears that the StGB applies in respect of games of chance with stakes of EUR 10 or more and to ‘series games’ with smaller individual stakes which cumulatively amount to more than EUR 10. Otherwise, an offence is dealt with as an administrative offence under the provisions of the GSpG.
83) Article 47 of the Charter, which recognises the right to an effective remedy and a fair trial, is not infringed in circumstances where the person accused of an offence has access to a court or tribunal, whether those courts are the administrative or criminal courts.
84) Neither Article 56 TFEU nor Articles 16, 47 or 50 of the Charter therefore preclude a national law, such as that in the main proceedings, which provides that criminal penalties are imposed in respect of unlawful gaming services with stakes of EUR 10 and series games with smaller individual stakes which cumulatively amount to more than EUR 10 whereas administrative penalties apply in respect of unlawful gaming services with stakes of less than EUR 10.
85) By its fourth question, the referring court asks whether Article 56 TFEU and/or Articles 15 to 17 and 50 of the Charter preclude penalties, such as those provided for under Articles 53, 54 and 56(a) of the GSpG, which include the confiscation and destruction of the gaming machines and the closure of the business.
88) If it is indeed the case that the penalty cannot be adjusted to reflect elements such as the degree of fault, that would be a disproportionate penalty precluded by Article 56 TFEU itself as well as by Articles 15, 16 and 17 of the Charter. However, this is a matter for the national court to verify. (Article 50 of the Charter does not, in my view, have any bearing on this question.)
90) In the light of the foregoing considerations, I propose that the Court should answer the questions raised by the Unabhängiger Verwaltungssenat des Landes Oberösterreich (Austria) to the following effect: