The Rights of Self-employed CEEC Sitizens in the Member States under the Europe Agreements. Ott, Andrea

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1 Ott, Andrea The Rights of Self-employed CEEC Sitizens in the Member States under the Europe Agreements ECJ 27 September Case C-63/99 - Gloszczuk; C-235/99 of 27 September Kondova, and C-257/99 of 27 September Barkoci and Malik; 20 November C-268/99 - Jany and Others The European Legal Forum (E) /01, /01 IPR Verlag GmbH München The European Legal Forum - Internet Portal Literature Doc

2 LAW OF THE EUROPEAN ORGANISATIONS The rights of self-employed CEEC citizens in the Member States under the Europe Agreements ECJ 27 September 2001 Case C-63/99 Gloszczuk; C-235/99 of 27 September 2001 Kondova, and C-257/99 of 27 September Barkoci and Malik; 20 November 2001 C-268/99 Jany and Others Dr Andrea Ott * I. Introduction At the beginning of this new century, the European Union embarked on the most ambitious project relating to eastward European enlargement. Drawing from the experience of four previous enlargements, the EC has followed a certain accession pattern: in the 1960 s Greece was associated by an Association Agreement, Spain and Portugal were associated with the EC by free trade agreements and Great Britain, Ireland, Austria, Sweden and Finland were connected to the EC via the EFTA cooperation 1 and later the EEA agreement. 2 A comparable, even though more structured and detailed, but also ambitious and time-pressured model of introducing applicant countries to the concept of European integration has been initiated with the Central and Eastern European Countries (hereinafter CEECs ) through the so-called Europe Agreements which have been concluded with all ten CEECs in the last ten years. II. The Europe Agreements in the context of the Pre- Accession Strategy The first Europe Agreements were signed with Hungary 3 and Poland 4 in 1991, 5 followed by Romania, 6 Bulgaria, 7 the * Senior Research Fellow in European Law and WTO Law, T.M.C. Asser Institute, The Hague (NL). EFTA was founded by Great Britain, Sweden, Switzerland, Portugal, Austria, Norway and Denmark in See for instance: EEA, OJ 1994 L 1. OJ 1993 L 347 at 1. OJ 1993 L 348 at 1. Also in 1991 a Europe Agreement was negotiated with Czechoslovakia but had to be renegotiated after the separation into two republics; see: Hošková, Legal aspects of the integration of the Czech Republic and Slovakia into the European Security and Economic Structures (1994) 37 GYIL 68. OJ 1994 L 357 at 1. OJ 1994 L 360 at 1. Slovak Republic 8 and the Czech Republic 9 in 1993, Latvia, Lithuania and Estonia 10 in 1995 and Slovenia 11 in The Europe Agreements with Hungary and Poland came into effect in 1994, while the Agreements with Bulgaria, the Czech Republic, the Slovak Republic and Romania came into effect in The Baltic States followed in 1998 and the latest Europe Agreement with Slovenia came into effect in February The signing and ratification by all the EU Member States and the respective applicant country generally took some three years because the Europe Agreements (hereinafter EAs ) had to be ratified as mixed agreements, not only according to Articles 228 and 238 EC Treaty (now Articles 300 and 310 EC) by the Council but also by all the Member States. As an interim solution, the Council drew up Interim Agreements on free trade and trade-related matters with the applicant countries, which fell under the exclusive EC competence of Article 113 EC Treaty (now Article 133 EC). 12 The EAs represent a new generation of Accession Association Agreements; such agreements have been concluded in the past with Greece, 13 Turkey, 14 Cyprus and Malta 15 and establish a structured political dialogue among the Association Council Bodies and gradually introduced a free trade area in order to liberalise trade. They also provide a co-operation scheme in such areas as competition law, environment, and education and training, and apply provisions on the movement of persons, OJ 1994 L 359 at 1. OJ 1994 L 360 at 1. Estonia: OJ 1998 L 68 at 1; Latvia: OJ 1998 L 26 at 1; Lithuania: OJ 1998 L 51 at 1. OJ 1999 L 51. See for instance for Latvia, OJ 1994 L 374 at 1; Ramsey, The implications of the Europe Agreements for an expanded European Union (1995) 44 ICLQ 164. Athens Agreement from 1963, OJ 1963 No. 26 at 294. Ankara Agreement from 1964, OJ 1973 C 133 at 1. Even though the structures of these agreements are more underdeveloped: OJ 1973 L 133 at 2, OJ 1971 L 61 at 2.

3 498 Issue /01 The European Legal Forum establishment and supply of services to Member States and candidate countries. 16 The EAs 17 constitute the central instrument for structuring accession which has been complemented since 1994 by a preaccession strategy. 18 Even though the Copenhagen European Council in 1993, which resulted in the famous Copenhagen criteria as preconditions for accession, 19 seemed to initiate a coherent enlargement process, a strategy was only developed by the European Council in Essen in December The pre-accession strategy which has been reinforced following the Agenda in 1997 restructured the accession process and introduced Accession Partnerships in the form of EC regulations. These regulations co-ordinate financial and legal forms of assistance for candidate countries and set out specific principles, priorities, intermediate objectives and ultimate objectives for each candidate country. 22 Assistance of this nature includes financial instruments such as PHARE, 23 the preaccession structural funding of ISPA and SAPARD 24 and led See further: Inglis, The Europe Agreements compared in the light of their pre-accession reorientation [2000] CMLR See on the EAs: Cremona, Community relations with the Visegrad Group [1993] EL Rev. 345; Horovitz, EC-Central/East European Relations: New principles for a new era [1990] CMLR 259; Kennedy/Webb, The limits of integration: Eastern Europe and the European Communities [1993] CMLR 1095; Maresceau/Montaguti, The Relations of the European Union with Central and Eastern Europe: A legal appraisal [1995] CMLR 1327; Arnold, in: M.A. Dauses (ed.), Handbuch des EG-Wirtschaftsrechts, Munich (D), 1998, K.I., para. 129; Lucron, Contenu et portée des accords entre la communauté et la Hongrie, la Pologne et la Tchéchoslovaquie [1992] RMC 293; Gärtner, Zu Inhalt und unmittelbarer Anwendbarkeit der Europa- Abkommen der EG mit den ostmitteleuropäischen Staaten, [1993] ROW 332; Guild, Waltzing towards accession: The case of the Central and Eastern European Countries (CEECs) [1998] EBLR 92; Scott/Mansell, Trading partners: The European Community trade agreements with Poland, Hungary and the Czech and Slovak Republic [1993] BYIL 391. Regarding the reorientation from mere association to vehicle to accession, see Inglis, The Europe Agreements compared in the light of their pre-accession reorientation (2000) 37 CMLR The European Council declared that every country which has signed a Europe Agreement with the EU can apply for accession if it fulfils these criteria. The criteria consist of: 1) political criteria which require that the candidate country has achieved institutional stability guaranteeing democracy, the rule of law, human rights, and the respect for and protection of minorities; 2) economic criteria which are defined by the existence of a functioning market economy and the capacity to withstand competitive pressure and market forces within the Union; 3) other obligations which consist of: a) fulfilling the aims of the political, economic and monetary union, b) the adoption of the acquis, c) the administrative capacity to apply the acquis, and d) as an internal requirement, the capacity of the EU to absorb new members. See for instance: Inglis (supra note 18), at 1179; see also Evtimov, Die Erweiterungsstrategie der Europäischen Union [2001] WGO Monatshefte für Osteuropäisches Recht 89. The Agenda 2000 was a Commission paper dealing with the effects of enlargement and connected with the opinion of the Commission on the applications of the CEE countries for accession. Council Regulation (EC) No. 622/98 of 16 March 1998 on assistance to the applicant States in the framework of the pre-accession strategy, and in particular on the establishment of Accession Partnerships, OJ 1198 L 85 at 1, and Council Decision 1999/850/EC of 6 December 1999 on the principles, priorities, intermediate objectives and conditions contained in the Accession Partnership with the Republic of Hungary, OJ 1999 L 335 at 1. PHARE is the abbreviation for Poland and Hungary Assistance for Reconstructing the Economy and originally only included technical assistance: Council Regulation No. 3906/89 of 18 December 1989, OJ 1989 L 375 at 11. ISPA funds accession-related projects in the field of transport and environment: Council Regulation (EC) No. 1267/1999 of 21 June 1999, OJ L 161 at 71 (26 June 1999), in force since 1 January 2000; and SAPARD funds agricultural projects: Council Regulation (EC) No. 1268/1999 of to the extension of Community programmes to the candidate countries and the opening of Commmunity agencies for all candidate countries. 25 This finally culminated in the official opening of accession negotiations with Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia in March 1998 and was followed by similar negotiations with the socalled Helsinki group consisting of Bulgaria, Latvia, Lithuania, Romania, Slovakia and Malta at the beginning of III. The developing case law around the EAs Astonishingly enough, when reflecting on the importance of the EAs in the pre-accession process, it took the European Court of Justice until 1999 to be confronted with preliminary questions referred by national courts. 27 However, the national courts had already been discussing the implications for workers and the self-employed coming from the CEECs prior to Nevertheless, Dutch and German courts, for example, decided against referring these cases on the EA to the ECJ. 28 Consequently, substantial case law which has accumulated in Belgian, British, Dutch, German and French courts concerning the provisions on movement of workers and the right of establishment has been left unnoticed by a wider European legal public. 29 The national courts were mainly confronted with the interpretation of the effect and scope of the establishment provisions in the EAs; some of them considered the establishment provision to be directly effective, 30 and others denied any con June 1999, OJ L 161 at 87 (26 June 1999), in force since 1 January See Commission Communication to the Council, Participation of Candidate Countries in Community programmes, agencies and committees, COM (99) 710, 20 December 1999 and extending Community education programmes, for instance: Decision No. 2/97 of the Association Council EC/Czech Republic of 30 September 1997 adopting the terms and conditions for the participation of the Czech Republic in Community programmes in the fields of training, youth and education OJ 1997 L 277 at See on the chronology of the enlargement process: Hungary for example applied for membership in the European Union officially on 31 March 1994, Poland applied on 5 April 1994 and Slovenia on 10 June ECJ 27 September 2001 C-63/99 The Queen ex parte: Wieslaw and Elzbieta Gloszczuk v Secretary of State for the Home Department OJ 1999 C 121 at 9; ECJ 27 September 2001 C-235/99 The Queen, ex parte: Eleanora Ivanova Kondova v Secretary of State for the Home Department OJ 1999 C 246 at 15; ECJ 27 September 2001 C-257/99 The Queen, ex parte: Julius Barkoci and Marcel Malik v Secretary of State for the Home Department, OJ 1999 C 265 at 2; C-268/99 Aldona Malgorzata Jany and Others v Staatssecretaris van Justitie, OJ 1999 C 265 at 4, Proceedings No. 12/99, No. 23 and No. 26; C-162/00 Land Nordrhein-Westfalen v Beata Pokrzetowicz-Meyer, OJ 2000 C 211 at 6. See the German Court: Bundessozialgericht (Federal Social Court), judgment of 15 October 1998, not published; and the Dutch court: President Rechtbank Alkmaar, reg. no. 94/1839, No. 80, Rechtspraak Vreemdelingenrecht 1994, 253. See in so far Inglis mentioning the Dutch and Belgian cases in: Inglis, The Europe Agreements compared in the light of their pre-accession reorientation (2000) 37 CMLR Belgian Raad van State, 3 April 1995, Tijdschrift voor Vreemdelingenrecht 1995 (no. 2), 150: this case involved a Polish businessman who had a right to receive the obligatory working card for foreigners in Belgium; Verwaltungsgericht des Saarlandes, Order of 22 July 1994, (visited on 5 May 2000) which involved a Polish citizen who finished his dental studies in Poland and must obtain approbation in Germany.

4 The European Legal Forum Issue / crete rights based on different reasoning. 31 In the literature, most of the academics saw the general possibility of establishing provisions which have direct effect but without discussing their scope in further detail. 32 All of the EAs contain a provision such as Article 44(3) Polish EA which stipulates that each Member State shall grant, from entry into force of this Agreement, a treatment no less favourable than that accorded to its own companies and nationals for the establishment of Polish companies and nationals as defined in Article 48 and shall grant in the operation of Polish companies and nationals established in its territory a treatment no less favourable than that accorded to its own companies and nationals. 33 In paragraph 4 of this provision, it is further spelt out that establishment shall mean as regards nationals, the right to take up and pursue economic activities as self-employed persons and to set up and manage undertakings ( ). Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another Party. This provision must be read in light of the general provision Article 58 Polish EA. According to this Article, nothing in this Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons ( ) provided that, in so doing, they do not nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. In addition, a Joint Declaration has been added to all the EAs according to which the sole fact of requiring a visa for natural persons of certain Parties and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment. IV. The cases Gloszczuk, Kondova and Barkoci and Malik All three cases concern referrals from the High Court of President Rechtbank s Gravenhage, 26 May 1995, AWB 95/4733, Rechtspraak Vreemdelingenrecht (1995) No. 93, 307 (involving Polish seasonal workers); President Rechtbank Alkmaar, 9 December 1994, reg. no. 94/1839, No. 80, Rechtspraak Vreemdelingenrecht (1994) 250 (involving Polish firm and working permits), Arrondissementsrechtbank te s-gravenhage zp te s-hertogenbosch, AWB 96/1540 VV (Polish couple); Arrondissementsrechtbank te s-gravenhage zp.amsterdam, AWB 97/963 VRWET (Polish prostitute). Cremona, Community relations with the Visegrad Group [1993] EL Rev. 352; Maresceau, Les accords européens: analyse génèrale, [1993] RMC 507, Evans, The Integration of the European Community and third states in Europe, Oxford (GB), 1996, at 353; Evtimov, Rechtsprobleme der Assoziierung der Mittel- und Osteuropäischen Länder für ihren Beitritt zur Europäischen Union, Munich (D), 1999, at 54; Gobert, Europäische Rechtsangleichung in Ungarn: eine Untersuchung ausgewählter Bereiche des ungarischen Wirtschaftsrechts im Lichte der Assoziationsvorgaben der EU, Berlin (D), 1997, at 75; Peers, An even closer waiting room?: The case for Eastern european accession to the European Economic Area [1995] CMLR 187, 208; against however: Gargulla, Die arbeits- und aufenthaltsrechtlichen Begünstigungen für osteuropäische Arbeitnehmer und Selbständige durch die Europa- Abkommen Sein und Schein? [1995] 5 InfAuslR 181. In more detail, some minor differences in the respective EA must be acknowledged: e.g. Article 44(4) Hungarian EA stipulates that the national treatment for Hungarian companies and individuals is only applicable from the second stage. The second stage began according to Decision No. 1/2000 EU-Hungary Association Council on 1 February 2000, OJ 2000 L 114 at 32. Justice of England and Wales and deal with the interpretation of the effect and scope of the establishment provisions. 1. The facts and findings a) In the first case Mr and Mrs Gloszczuk separately were granted leave to enter the United Kingdom as tourists for a limited period in 1989 and Both their visas contained express conditions prohibiting them from entering employment or engaging in any business or profession in a selfemployed capacity. However, Mr Gloszczuk started working in 1991 and according to his own claims, since 1995 as a selfemployed building contractor; therefore, after several years, he and his wife claimed recognition of their right to establish themselves under Article 44 of the Polish EA and for leave to remain in the United Kingdom. This was subsequently refused by the Secretary of State on the ground that this right of establishment was only open to persons lawfully present in a Member State. b) In the second case Ms Kondova, a Bulgarian citizen and veterinary student, entered the United Kingdom in 1993 with entry clearance obtained in Bulgaria for the purpose of temporarily working as an agricultural worker. During her stay, she made a claim for political asylum and after it was refused she married a Mauritian national who possessed a right to indefinite residence. In the meantime, the Secretary of State concluded that Ms Kondova had entered the country illegally because she had knowingly misled both the entry clearance officer in Bulgaria and the immigration officer in the United Kingdom. However, Ms Kondova soon started working as a self-employed cleaner and applied for leave to remain on the basis of the Europe Agreement. Although her application was refused at first instance, the Secretary of State was prepared at second instance to grant leave to remain on the basis of the right of establishment. Ms Kondova, nevertheless, sought a declaration that she had always been entitled to residence and claimed compensation for damages. c) In the last case, the Czech citizens Barkoci and Malik, who belonged to the Roma ethnical group, sought leave after arriving in Britain in 1997 to enter for work and applied for asylum. After these applications were refused, Barkoci and Malik submitted applications under the Europe Agreements to establish themselves as self-employed. Since both men had never been formally granted leave to enter the United Kingdom, their applications for leave to remain were treated as applications for initial leave to enter. As the immigration authorities were not satisfied with the financial viability of the business plans and the genuine intention to act as selfemployed, leave to enter was refused for the second time. The High Court of Justice referred a number of questions to the ECJ. The High Court judges primarily questioned whether the principle of non-discrimination applicable on establishment (Article 44(3) EA Poland, Article 45(1) EA Bulgaria and Article 45(3) EA Czech Republic) is directly effective and if the answer to the first question is positive, then asked how and to what extent could the Member State apply its laws and regulations regarding entry, stay and establishment of natural persons in accordance with this provision.

5 500 Issue /01 The European Legal Forum The national legislation of the United Kingdom concerning immigration rules, establishes a general system of prior entry clearance and provides for mandatory refusal of leave if such entry clearance has not been obtained. Furthermore, it contains a number of substantive requirements to satisfy in order to be regarded as self-employed. In all three judgments, the Court analyses the first question by reference to its case-law on international agreements. According to the settled case-law a provision of an international agreement is considered directly effective when, having regard to its wording and to the purpose and nature of the agreement itself, the provision contains a clear and precise obligation which is not subject, in its implementation or effect, to the adoption of any subsequent measure. 34 In its analysis of the equal treatment clause of the respective EAs, the judges came to the conclusion that it can be considered precise and unconditional enough to be applied by the national court. As a result, the Court examined the scope of this provision and how far the Member States can apply the national law with regard to entry, stay and establishment. With reference to the case law on the EC-Turkey Association Agreement (the Ankara Agreement ) and on the EC Treaty, 35 the Court confirmed that the right of entry and residency should be regarded as corollaries to the right of establishment under the Europe Agreements. However, this does not prompt the Court so far as to conclude that the mere similarity in wording between the Association Agreement and the EC Treaty leads to the same results. This depends rather on the objectives and the context; the Court concluded that the Europe Agreement is designed simply to create an appropriate framework for gradual integration into the Community as opposed to the creation of an internal market among the Member States of the European Union. Consequently, it summarised that the interpretation given to Article 52 EC Treaty could not be extended to the establishment provisions of the EAs and could therefore not be considered absolute privileges. The judges then considered whether the restrictions which the immigration rules of the UK imposed on CEEC citizens met the requirements of Article 58 Polish EA, namely in so far as they may not impair or nullify the right of establishment. In the case Barkoci and Malik, the immigration rules in question concerned the requirement to obtain entry clearance which is subject to verification of substantive requirements prior to entering the host Member State. Therefore, CEEC citizens only have a right of establishment if they are exclusively self-employed and the host Member State pursues in this respect a legitimate aim when it applies a system of prior control to check the exact nature of the activity envisaged by the applicant. In Gloszczuk and Kondova, the Court added that the right of establishment cannot be refused on grounds of nationality or the country of residency or because the national legal system provides for a general limitation on immigration. Moreover, economic or labour-market demands cannot be used as requirements for entry Gloszczuk (supra note 27), para. 30; Barkoci and Malik (supra note 27), para. 31. ECJ 8 April /75 Royer [1976] ECR 497. Respectively, Gloszczuk (supra note 27), para. 59 and Kondova (supra In summary the Court came to the conclusion that prior entry control is legitimate and in principle compatible with Article 44 (3) in conjunction with Article 58 (1) EA. 37 In this way the Member State can confirm whether the individual genuinely intends to take up activity as a self-employed person and whether he possesses from the outset sufficient financial resources and has a reasonable chance of success. 38 Therefore prior controls allow a system of detailed investigations which would be impossible for an immigration officer to conduct at the point of entry into the UK. By way of analogy to the Centros judgment, 39 the Court argued that a Polish national who circumvents the relevant national controls by misrepresenting that he is entering that Member State for the purpose of tourism places himself outside the sphere of protection afforded to him under the EA. 40 Lastly, the Court considered whether the requirement to submit a new application is in conformity with the right granted under the Europe Agreement. In doing so, it firstly clarified that temporary physical admission of persons, as in the case of Barkoci and Malik, is in no way equivalent to actual leave to enter the Member State. 41 However, leave to enter may be granted to a Czech national lacking entry clearance on the basis of the Immigration Rules if that person s application clearly and manifestly satisfies the same substantive requirements as those which would have been applied had he sought entry clearance prior to entry Comment All three cases addressed for the first time the concrete effect and scope of rights granted by the establishment provisions of the Europe Agreements which have been in effect for a number of years (for Poland since 1994 and for Bulgaria and the Czech Republic since 1995). In general, it is not surprising that the establishment provisions have resulted in the first decisions by the ECJ on the EAs even though it can be presumed that more workers from the CEECs are living in the Member States than there are self-employed persons in the Member States. However, when the provisions on workers are compared to the self-employment provisions, it becomes clear that the latter are defined much clearer and seem to entail more rights than the workers provisions. The workers provisions simply stipulate that legally employed workers from the CEECs are treated equally regarding the working conditions, remuneration or dismissal as compared to the Member State s own nationals note 27), para. 62. Gloszczuk (supra note 27), para. 68. Barkoci and Malik (supra note 27), para. 63. ECJ 9 March 1999 C-212/97 - Centros [1999] ECR I Gloszczuk (supra note 27), para. 75, see also Kondova (supra note 27), para. 80. Barkoci and Malik (supra note 27), para. 77. Barkoci and Malik (supra note 27), para. 71. Two cases so far pending before the ECJ, Case C-162/00 Land Nordrhein-Westfalen v Beata Pokrzetowicz-Meyer, OJ 2000 C 211 at 6 and Case C-438/00 Deutscher Handballbund e.v. v Maros Kolpak, OJ 2001 C 61 at 2.

6 The European Legal Forum Issue / With these decisions, the Court also analyses for the first time a new generation of Accession Associations which form a legal framework to prepare for the future accession of ten CEE countries. These ECJ decisions must be read in context with the Savas judgment which was decided in May and involved the oldest Accession Association still in force: the EC-Turkey Association. In Savas, the Court underlined that in analogy to the principles developed for Turkish workers, a right of entry and residence is attached to the right of establishment of self-employed Turkish persons, but requires the legal establishment of the individual in a Member State. 45 The special circumstance that both the applicants in Gloszczuk and in Kondova entered the UK before the EAs came into force, was not considered decisive by the Court. Instead, the Court concentrated on the fact that they entered the Member State on false representations. In contrast to these facts, the applicants in Barkoci and Malik were regarded as merely physically residing in the United Kingdom since they never obtained any form of entry clearance before they applied for recognition of their right of establishment. In all three cases, common issues come into play, as to how far the discretion of the national immigration officers can be exercised when the Europe Agreements prohibit the nullification or impairment of the rights granted. The interpretation which gives direct effect to the nondiscrimination clause is fully in line with the established case law on Association Agreements. For instance similarly worded non-discrimination clauses in Agreements such as the Moroccan and Algerian Co-operation Agreement were in the past considered directly effective. 46 Secondly, it is settled case law that an extension of EC law principles to EC international agreements, is not done automatically, but rather depends on the concrete interpretation of the context and purpose of the respective international agreement and the concrete provision. 47 These principles in regard to the establishment provisions of the EC Treaty have been a right to a residence permit for EC citizens where the issuing of the documents is to be considered as purely declaratory. 48 Therefore, it could be debated whether a directly effective right of establishment for CEEC citizens implies a right of entry and residence and the Advocates General and judges come to interesting, even though at the end minor, differences in the interpretations of the respective provisions. In their Opinions, Advocate General Alber dealing with Gloszczuk and Kondova and Advocate General Mischo dealing with Barkoci and Malik both denied an implied right of residence and decided that a right to a residence permit cannot automatically be established by the Association Agreement See Ott, The Savas Case Analogies between Turkish Self-Employed and Workers? [2000] European Journal of Migration and Law 445. ECJ 11 May 2000 C-37/98 Savas [2000] ECR I-2927, paras. 60 and 63. See ECJ 31 January 1991 C-18/90 Kziber [1991] ECR I-199 and ECJ 20 April 1994 C-58/93 Yousfi [1994] ECR I Kondova (supra note 27), para. 51 with references to, inter alia, ECJ 9 February /80 Polydor [1982] ECR 329 and ECJ 1 July 1993 C-312/91 Metalsa [1993] ECR I ECJ 28 May Reyners v Belgian State [1974] ECR 631. because it depends on the national law applicable to the entry of the individual. 49 In contrast, the judges emphasised that the right of establishment implies a right of entry and residence and that these rights are to be considered corollary to the directly applicable provision. These differences arise from different interpretations of how the case-law of the Ankara Association Agreement affects the interpretation of the establishment provisions in the Europe Agreements. Both Advocates General dispute the extension of this case law to the present cases by arguing that the implied rights of entry and residence apply only within the specific context of the Association Agreement with Turkey which was appended with implementing decisions such as the EC- Turkey Association Council Decision No. 1/80 of 19 September According to this opinion of the Advocates General, it would be entirely contrary to the system if persons from non-member States with which the EC has not concluded such specific implementing decisions were placed in a better position than nationals of countries such as Turkey. 50 In the present cases, the Court correctly ignored these unconvincing arguments and solved the dilemma by granting implied rights of entry and residence subject to the appropriate rules of the host Member State. The Advocates General differed from one another however in their opinion on Articles 58(1) and 59(1) EA respectively. According to AG Alber, Article 59 EA is aimed at The Parties to the Europe Agreements, meaning the EC, the Member States and the particular CEEC, leaving no room for the creation of direct rights for individuals. Member States should continue to have the right to autonomously and independently regulate the provisions governing entry and residence. 51 In contrast, the Court and AG Mischo agreed that Member States should not have total discretion in applying their national rules on immigration. Therefore, it should always be examined whether the national immigration rules are appropriate for achieving the objective of checking whether the individual genuinely intends to take up activities in a selfemployed capacity without entering at the same time into employment or having recourse to public funds. 52 The matter is further complicated by the Court s differentiation between the scenario where an applicant has gained prior entry clearance on false grounds and where an applicant has gained no prior entry clearance whatsoever. First of all, UK national law allows a person intending to become established in the host Member State to request leave to remain as self-employed notwithstanding the fact that the person has originally been admitted for a different purpose. 53 The Court therefore regards the fulfilment of the requirement of a prior request for leave to remain as self-employed as decisive. If this See for instance Opinion of AG Albers, Case C-235/99, Kondova para. 62. See AG Alber in Kondova paras and AG Mischo on Barkoci and Malik para. 61 Opinion AG Alber in Gloszczuk para. 83, Kondova para. 92. See on this: Ter Heegde, The effect and scope of the right of establishment under the Europe Agreements [2001] European Law Reporter, forthcoming. See para. 62 and para. 65 of Gloszczuk and Kondova respectively.

7 502 Issue /01 The European Legal Forum condition has not been fulfilled, as in the Gloszczuk and Kondova cases, the fulfilment of all the subsequent substantive conditions of the national legislation is of no advantage. 54 On the other hand, in Barkoci and Malik, where the applicants did not have any entry clearance, the formal right to enter may be granted after entry into the UK if they fully comply with the substantive requirements of the national legislation. Accordingly, Member States may refuse the right of establishment and the attached rights of entry and to remain when the applicant was residing unlawfully within the territory at the time of application. However, Member States may not refuse the right of establishment when the applicant did not have any entry clearance at all but does satisfy the substantive requirements. Applicants therefore need to be very sure about the intentions with which they enter a Member State. If they obtain leave to enter on improper grounds, this can never be remedied by complying with subsequent substantive conditions, at least not before leave to enter and remain on valid grounds has been granted. In this way, the Court ensures that leave to enter and remain are not mere formalities. 55 However, in the Barkoci and Malik case, the Court adds that leave to enter and remain are also not of overriding importance when an applicant satisfies all other requirements. In practice, only individuals who have already applied for the self-employed status from abroad or have been legally employed in the Member State and decide to establish themselves thereafter in the Member State as self-employed can rely successfully on the rights granted by the EAs. 56 V. Concluding remarks In the end, the Court found a middle path between on the one hand stressing the important role and function of the Accession Association and not nullifying the concrete rights spelt out in the establishment provisions of the EAs and on the other hand securing the interests of the Member States not to open the labour market before accession and streamlining the judgments with the positions expressed in the accession negotiations on the movement of persons. Therefore it is not pure coincidence that the judgments were decided only after negotiations on the chapter movement of workers was opened and first results were achieved. 57 With respect to the accession negotiations, the Member States Austria and Germany managed to achieve agreement among all Member States on a Common Position which restricts the access of workers from the candidate countries to the EC labour market for a transitional period of up to seven years after accession. 58 Generally, it cannot be ignored that the implied rights derived from the establishment provisions could be Paras. 70 and 75. As pleaded by AG Mischo in Barkoci and Malik, para. 92. These examples are already mentioned by AG La Pergola in Savas, para. 20. See on this: Uniting Europe No October See on the Accession Negotiations in detail: Ziegler, in: Ott/Inglis (eds), Handbook on European Enlargement, forthcoming. misleading in so far as they can be largely restricted by the existing national immigration laws and can grant privileges to certain types of self-employed persons such as doctors 59 or to professional sportsmen as workers. 60 In another decision involving prostitutes which was decided by the ECJ on 20 November 2001, further legal questions in this area were resolved. 61 In this case it was undisputed that the residence of Polish and Czech prostitutes was at least tolerated by the Dutch authorities 62 and certain forms of prostitution such as street and window prostitution are permitted in the Netherlands. 63 Accordingly, the Court emphasised the legal problem of whether prostitution falls under the term economic activities according to the EA and whether prostitutes can be considered as self-employed in accordance with the EA. With this judgment, the ECJ confirmed its case-law based on the EAs and ruled that the Dutch requirements which required proof of sufficient financial resources were legal. Furthermore, the ECJ ruled on the basis of convincing arguments that prostitution falls under the term of self-employment and thereby answered a long disputed question in Community law. 64 On this issue, some national courts have so far interpreted the existing EC case-law to the effect that prostitution does not fall under the four freedoms. 65 However, in this case, the ECJ considered it solely decisive that prostitution pursued in a self-employed capacity involved a service provided for remuneration; the national court must therefore only assess whether these requirements namely self-employment and at one s own risk are fulfilled. The ECJ also confirmed the general legal interpretation that identical terms of law such as workers and self-employed in the EC Treaty and EC international agreements, can lead to See for instance the statement by the German government to the Bundesrat in connection with the ratification of the EA with Poland: Denkschrift zu den Europa-Abkommen, Drucksache 12/4275 Deutscher Bundestag, 174. Not surprisingly, a lot of cases involving workers from the CEECs have been legally employed sportspersons: Landgericht Dortmund, 15 January 1998, [1999] SpuRt 31; Cour Administrative d Appel de Nancy, 3 February 2000, 99nc00282.htm (22 March 2000); Landgericht Hannover, 17 October 1997, [1998] SpuRt 74; Oberlandesgericht Frankfurt, 22 December 1997, OLG Rechtsprechung [1998] OLGR Frankfurt 109. ECJ 20 November C-268/99 - Jany and Others; and the caselaw of the Dutch court: Rechtbank s-gravenhage zp Amsterdam, 15 July 1999, no. AWB 98/5592, 98/5595, 98/5597; 98/5599, 98/5600, 98/6256, Jurisprudentie Vreemdelingenrecht, 27 October 1999, 959; Rechtbank `s-gravenhage zp Amsterdam, 15 July 1999, no. AWB 98/5592, 98/5595, 98/5597, 98/5599, 98/5600, 98/6256, Jurisprudentie Vreemdelingenrecht, 27 October 1999, 959. The Jany case: Arrondissementsrechtbank te s-gravenhage zp. Amsterdam, no. AWB 97/1311. ECJ 20 November C-268/99 - Jany and Others - para. 21. The question was whether Article 44(4) Polish EA and Article 45(4) Czech EA imply that the term economic activities referred to therein in relation to self-employed persons are different in meaning and scope from the activities of self-employed persons referred to in Article 52 of the Treaty, see para. 32. Hereon ECJ 18 May and 116/81 Adoui and Cornuialle [1982] ECR 1665; ECJ 2 October 1990 C-363/89 Roux [1991] ECR I-273; the German courts interpretation of these decisions have lead to different outcomes so that according to the BVerwG prostitution does not fall under the EC fundamental freedoms: BVerwG, 15 July 1980, 60 BVerwGE 284 and Hamburg.OVG, 11 July 1989, [1990] NJW 663; for another opinion, see: Hess.VG, 26 January 1989, [1989] DVBl. 728.

8 The European Legal Forum Issue / an identical interpretation, however EC principles which characterise the EC legal order cannot be extended to international agreements. 66 More generally speaking, the international agreements affecting the rights of third country nationals within the Community legal order can be categorised into two groups. Firstly, the EEA Agreement and the not yet in force - bilateral agreements between Switzerland and the European Union must be named; 67 these extend comparable rights granted to EC nationals to nationals of these third countries. Secondly, the Association Agreements with Turkey, the EAs and the Euro-Mediterranean Agreement 68 fall into the other category where certain rights are granted to citizens of these third countries without automatically extending the acquis, but depending on a case-to-case analysis of the provisions and the national immigration rules Jany and Others (supra note 63) para. 38. See the Bilateral Agreement on the free movement of persons: See Euro-Mediterranean Agreement with Tunesia, OJ 1998 L 97 at 2. See further: Hedemann-Robinson, An overview of recent legal developments at Community level in relation to third country nationals resident within the European Union, with particular reference to the case law of the European Court of Justice (2001) 38 CMLR 525. ECJ 27 September 2001 C-63/99 The Queen v Secretary of State for the Home Department, ex parte: Wieslaw Gloszczuk and Elzbieta Gloszczuk Association Agreement Poland 1 Articles 44 and 58 External relations Freedom of establishment Leave to enter obtained fraudulently Article 44(3) of the Europe Agreement is to be construed as establishing, within the scope of application of that Agreement, a precise and unconditional principle which is sufficiently operational to be applied by a national court and which is therefore capable of governing the legal position of individuals. The direct effect which that provision must therefore be recognised as having, means that Polish nationals relying on it have the right to invoke it before the courts of the host Member State, notwithstanding the fact that the authorities of that State remain competent to apply to those nationals their own national laws and regulations regarding entry, stay and establishment, in accordance with Article 58(1) of that Agreement. The right of establishment, as defined by Article 44(3) of the above Association Agreement, means that rights of entry and residence, as corollaries of the right of establish- 1 The Europe Agreement establishing an association between the European Communities and their Member States, on the one part, and the Republic of Poland, on the other part, concluded and approved on behalf of the Community by Decision 93/743/Euratom, ECSC, EC of the Council and the Commission of 13 December 1993, OJ 1993 L 348, at 1. ment, are conferred on Polish nationals wishing to pursue activities of an industrial or commercial character, activities of craftsmen, or activities of the professions in a Member State. However, it follows from Article 58(1) of that Agreement that those rights of entry and residence are not absolute privileges, inasmuch as their exercise may, in some circumstances, be limited by the rules of the host Member State governing the entry, stay and establishment of Polish nationals. Articles 44(3) and 58(1) of the above Association Agreement, read together, do not in principle preclude a system of prior control which makes the issue by the competent immigration authorities of leave to enter and remain subject to the condition that the applicant must show that he genuinely intends to take up an activity as a self-employed person without at the same time entering into employment or having recourse to public funds, and that he possesses, from the outset, sufficient financial resources and has reasonable chances of success. Substantive requirements such as those set out in paragraphs 217 and 219 of the United Kingdom Immigration Rules (House of Commons Paper 395) have as their very purpose to enable the competent authorities to carry out such checks and are appropriate for achieving such a purpose. Article 58(1) of the above Association Agreement must be construed as meaning that the competent authorities of the host Member State may reject an application made pursuant to Article 44(3) of that Agreement on the sole ground that, when that application was submitted, the Polish national was residing illegally within the territory of that State because of false representations made to those authorities for the purpose of obtaining initial leave to enter that Member State on a different basis or of noncompliance with an express condition attached to that entry and relating to the authorised duration of his stay in that Member State. Consequently, those authorities may require that national to submit, in due and proper form, a new application for establishment on the basis of that Agreement by applying for an entry visa to the competent authorities in his State of origin or, as the case may be, in another country, provided that such measures do not have the effect of preventing such a national from having his situation reviewed at a later date when he submits that new application. Facts: Mr and Mrs Gloszczuk, both of whom are Polish nationals, were granted leave, on 15 October 1989 and 19 January 1991 respectively, to enter the United Kingdom as tourists for a period of six months. Mr Gloszczuk told the immigration officer who questioned him that he was on a four-day organised visit to the United Kingdom. He presented a return ticket for 19 October He indicated that it was his intention, at the end of that short visit, to return to Poland, where his pregnant wife awaited him, and that he had no intention of staying or working in the United Kingdom. When Mrs Gloszczuk arrived in the United Kingdom, she stated that she wished to spend seven days visiting the United Kingdom and that her husband was in Poland. She presented a return ticket for 17 February The entry visas of Mr and Mrs Gloszczuk contained an express condition prohib-