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Journal of International Relations and Development
Austria’s Accession to the European Union: Impacts on the National Legal Order
By Ulrike Hiebler
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Introduction
After the end of World War II the main objective of Austria’s international ambitions for almost four decades was to participate as effectively as possible in the process of Western European integration. During the time of the Cold War, Austria as a matter of fact could not participate as a fully-fledged member in the European Communities since full membership was regarded as being incompatible with Austria’s neutral status. 1
As an alternative, in 1960 Austria became one of the founding members of the European Free Trade Association (EFTA), then deemed not to conflict with its neutrality due to EFTA’s conception as a mere free-trade area lacking any common customs tariff or any striving for a common commercial policy. 2
After the accession of more and more EFTA members to the European Economic Community (EEC), a re-orientation was necessary and Austria sought to reinforce its contacts with the EEC. As a first step, two free-trade agreements between the EEC as well as the European Coal and Steel Community (ECSC) and Austria were concluded in 1972. 3
As a reaction to the EEC’s reinforced efforts towards completing the internal market as outlined in the Single European Act of 1985, a new initiative at the European level concerning the relationship between EFTA and EC countries was launched in order to avoid a new division of Europe – hence, the idea of the European Economic Area (EEA) was born. The EEA is based on an association of the EFTA countries with the EC according to Article 238 [310] 4 of the ECT 5 and is basically directed towards the realisation of the four freedoms of the internal market.
For Austria, participation in the EEA was mainly viewed as a useful way of preparing for subsequent full EC/European Union (EU) membership – a fact that becomes apparent when it is considered that Austria started to negotiate the EEA-Agreement in 1990, but had already applied for EC membership on 17 July 1989. 6 The fact that the EEA-Agreement requires every Contracting Party to guarantee the four freedoms and furthermore provides for collaboration in a number of other fields constituted an opportunity for Austria to implement the main part of the acquis communautaire while still negotiating its actual accession to the EC. 7 Accompanied by a bilateral transit agreement, the EEA-Agreement was signed by Austria on 2 May 1992.
This way of proceeding implied that, with Austria’s accession to the EEA, more than 60 percent of the acquis had already to be taken over into the Austrian legal order, amounting to about 1,400 legal acts. With the coming into force of the EEA-Agreement on 1 January 1994, basically all EC legal acts of relevance to the internal market also had to be applied in the participating EFTA countries. In concrete terms, this meant for Austria that it had to implement all the provisions of the ECT and of EC secondary legislation concerning the free movement of goods, persons, services, and capital as well as competition policy, corporate law and some accompanying policies 8 as early as January 1994. 9 As a corollary, many important issues had already been resolved during the negotiations on the EEA.
Therefore, only a limited range of issues was left to be discussed during the actual EU accession negotiations, e.g. the subjects of agriculture, external relations, neutrality, transit and budgetary issues, so that the negotiations were able to be concluded after only 14 months. During this period, the so-called screening process was conducted, which means that a comparison was made between all EU secondary legislation and the Austrian legal order in order to identify problematic areas. In this context, Austria was again able to profit from the fact that a great part of this assessment had already been completed during the EEA negotiations. 10
At a referendum on Austria’s EU membership held in June 1994, a two-thirds majority voted in favour of accession. Accordingly, the Austrian Accession Law 11 was approved, authorising the competent constitutional organs to conclude the Treaty of Accession. After the Treaty of Accession 12 was signed in June 1994, Austria became a member of the EU as of 1 January 1995.
Legal Adjustments in Austria in the Context of EEA and EU Membership
The EEA-Agreement was incorporated into the Austrian legal order by the EWR-Bundesverfassungsgesetz (EEA federal constitutional law), 13 providing rules on the incorporation of those EEA Joint Committee’s decisions that amend or complement national provisions, and on the implementation of EC Directives in Austria. 14
As a corollary to Austria’s accession to the EEA, the Austrian legislator had to implement the major part of the substantive law in the EU’s first pillar by 1994. All the EC secondary legislation relevant for the EEA is listed in the 22 Annexes to the EEA-Agreement as well as in a number of Protocols mentioned in Article 98 of the Agreement. These ‘acquis lists’ comprise 160 Regulations, 820 Directives, 120 Decisions and 300 non-binding legal acts, such as Communications and Recommendations of the Commission, ect. They can be divided into six major groups that will be dealt with in more detail below.
Apart from the legislation laid down in Annexes and Protocols, there was also the so-called ‘pipeline acquis’ which had to be implemented and applied in Austria from the day of the coming into force of the EEA-Agreement. This term is used for all EC secondary legislation of relevance to the EEA that was issued after the conclusion of EEA negotiations, but prior to the entering into force of the Agreement. EEA Contracting Parties are obliged to fully take over all the legal acts listed in the Annexes to the Agreement as well as all EC provisions referred to by the EEA Joint Committee. According to Article 7 (a and b) EEA, they are binding upon the Contracting Parties and comprise part of their internal legal order or have to be implemented as part of national law. Analogous to EC law, an act corresponding to an E(E)C Regulation shall as such be made part of the internal legal order, whereas an act corresponding to an E(E)C Directive shall leave to the authorities of the Contracting Parties a choice as to the form and method of implementation. With regard to the interpretation of the EEA-Agreement, it is provided for in Article 6 of the EEA-Agreement, that its provisions, in so far as they are identical in substance to corresponding rules of the ECT and to secondary legislation adopted in application of the ECT, shall be interpreted in conformity with the relevant rulings of the European Court of Justice (ECJ) given prior to the date of signature of the Agreement. Therefore, with the coming into force of the EEA-Agreement, the principle of the EC compatible interpretation of national law already applied to Austria as far as law identical to EC law was concerned. Furthermore, relevant EC law had to be continuously installed into the Austrian legal order following the procedure laid down in Article 98 of the EEA-Agreement, which provides rules for the take-over of newly-issued EC law into the EEA by decision of the EEA Joint Committee. 15
In the course of its EEA negotiations, Austria was granted transitional periods for implementation of EC legislation in a number of cases. For example, a transitional period of two years applied to modification of the state monopoly in the salt sector; the acquisition of land by foreign nationals had to be fully liberalised by 1996 only. 16 Those transitional periods applied solely to Austria’s participation in the EEA and were not applied as such to EU accession. At the date of conclusion of the EEA negotiations, it had not been possible to foresee that the entering into force of the EEA-Agreement would be delayed until the beginning of 1994 so that Austria, as an EFTA country, participated in the EEA for only one year. Concerning Austria’s membership in the EU, a number of transitional periods were re-negotiated. They will be dealt with below.
Preparation for Austria’s participation in the EEA involved amendments to or new enactment of about 140 laws and as many regulations at the federal level. As Austria is a federal state composed of nine Länder (provinces), further laws had to be amended or created at the Länder level in 70 fields of law and regulations in 30 areas. 17 The vast volume of amendments which had still to be carried out at that time is even more impressive considering that even before the start of the EEA negotiations, Austria had autonomously duplicated parts of EC law, mainly due to its close economic contacts with the E(E)C.
Free Movement of Goods
Trade in commercial and industrial goods between the EC and Austria had already been regulated in the free-trade agreement of 1972. By means of the EEA, this system was multilateralised, while the bulk of agriculture was kept excluded. Since the principle of the free movement of goods is one of the four freedoms essential for the functioning of the common market, all barriers to trade had to be removed across the EU and the EEA. Subsequently, inter alia, it was necessary to harmonise the rules on the protection of consumers, health and the environment. Therefore, within the framework of the EEA, technical barriers to trade were reduced and technical standards harmonised. Since then, goods bearing the EC certification mark have been free to circulate within the EEA as they underlie the principle of mutual recognition. Nevertheless, border controls had to be maintained since there is no such thing as a common customs tariff of the EEA Contracting Parties and rules of origin still had to be applied.
In Austria, the following areas were particularly in need of law reform in order to ensure the free movement of goods: Public procurement, 18 technical standards, the protection of computer programmes, as well as the foodstuffs and energy sectors.
Approximately 26 federal laws had to be amended such as e.g. the Preistransparenzgesetz (Price Transparency Act), the Verstaatlichungsgesetz (Act on Nationalisation), the Produktsicherheitsgesetz (Product Safety Act) and the Produkthaftungsgesetz (Product Liability Act). In addition, a large number of regulations had to be issued or amended in implementing Part II Chapter 4 of the EEA-Agreement (other rules relating to the free movement of goods), which mainly affected the labelling of foodstuffs, cosmetics, etc. 19
Not all legislative work in these legal fields proved to be high quality. In some cases, the expert opinions of the new bills, drafted in order to reach EC compatibility in national legislation, proved to be very critical. They stated a number of shortcomings both with regard to meeting the conditions required by EC law as well as regarding the homogeneity of the internal legal order. 20 In addition, the deadlines for implementing the relevant EC law were not always met. These shortcomings can be ascribed to various factors ranging from the ‘newcomer argument’ (the fact that, at the beginning, a majority of the Austrian administration was not yet familiar with EC law) through to the influence of the particular structures and traditions of the Austrian legal system.
Freedom to Provide Services
The principle of freedom to provide services, laid down in the ECT and taken over into the EEA-Agreement, 21 enables EU citizens as well as the nationals of all EEA Contracting Parties to provide services across national frontiers without any restrictions on the grounds of nationality. In this context, the term ‘services’ includes any services provided through self-employed, industrial, agricultural or professional activities.
In Austria, realisation of this principle required adjustments to such important fields of law as the insurance and banking laws. Besides, the telecommunications and energy sectors had to be subjected to a major reform. This led to the enactment of a number of new laws, such as amendments to the Börsegesetz (Stock Exchange Act) and the Rundfunkgesetz (Broadcasting Law) as well as amendments in the field of insurance contract law. The new Finanzmarktanpassungsgesetz (Law on the Adjustment of Financial Markets) as well as the new Fernmeldegesetz (Telecommunications Act) – both dating from 1993 – also form part of these implementing provisions. Last but not least, a number of professional rules had to be liberalised and adapted to the new requirements.
The EWR-Rechtsanwaltsgesetz 1992 (EEA Lawyers Act of 1992) is one of these adjustment measures in the field of the professions. 22 The first section of this act lays down rules for the provision of services by foreign lawyers in Austria. This act implements Council Directive 77/249/EEC 23 by laying down in § 1 that every lawyer established in the EEA is entitled to provide legal services in Austria on the same basis as any Austrian Rechtsanwalt admitted to the Austrian Bar Association (Rechtsanwaltskammer). He/she has the same rights and duties as an Austrian Rechtsanwalt regarding the representation and defence of clients before courts and authorities. However, he/she is exempt from the requirements to be enrolled with the Austrian Bar Association and to have chambers in Austria.
According to Directive 77/249/EEC, the representation and defence of clients before court can be made subject to certain conditions in order to ensure high-quality service. With regard to its internal conditions, every member-state is free to choose the most convenient measure from among the instruments proposed in Article 5 of the Directive. Austria decided in favour of introducing into the EWR-Rechtsanwaltsgesetz 1992 the requirement for foreign lawyers to act in conjunction with an Austrian Rechtsanwalt. This means that a foreign lawyer established in an EEA country is only allowed to act as a representative of a client in legal proceedings on the condition that he/she works in conjunction with an Austrian Rechtsanwalt, who practices before the judicial authority in question. In conformity with the case law of the ECJ, 24 this requirement is restricted to cases requiring mandatory representation by a lawyer under national law. 25 However, a foreign lawyer providing services in Austria is neither entitled to become enrolled with the Bar nor to open chambers in Austria. With these provisions, Austria followed the requirements of Directive 77/249/EEC.
By contrast, the case of transport services 26 provides an example of a sector that has so far not been subject to full legal adjustment in Austria. As far as transport by river, air, rail, and road is concerned, EC law had to be taken over and implemented to the full extent. However, in the area of road transit traffic, Austria succeeded in negotiating a bilateral extra regime due to related special national interests. The basic problem is that transit by road through the Austrian Alps has been increasing steadily over the last few decades, causing serious pollution and other inconveniences such as extreme noise pollution in some of the most heavily affected north-south valleys. Besides, this situation has been aggravated by the very restrictive transit policy of Switzerland, a third country and Austria’s Western neighbour, making many hauliers take the alternative route via Austria. In these circumstances, Austria insisted on a transitional period for the full realisation of free transit by road through its territory. In the scope of the EEA, this transitional period was laid down in Protocol No. 43 to the EEA in the context of a special transit regime for Austria and was limited to 12 years. The provisions of the Protocol abrogated within their field of application the more general provisions of the EEA-Agreement.
During the EU accession negotiations, this special regime was taken over in a modified way and laid down in Protocol No. 9 27 to the Act of Accession. 28 Although the transitional period was cut down by one year, the regime has gained more legal relevance due to the fact that it has become part of EC primary law in the form of a protocol. In the EEA it was merely an agreement between the EC and a third country, legally binding for the EC and its member-states by virtue of Article 228 (7) [300] of the ECT, but not part of primary law. During the new transitional period, composed of three 3-year periods, a 60 percent-reduction of pollution is to be achieved. The regime is based on the so-called ecopoints system in combination with quantitative restrictions on transit traffic through Austrian territory. 29 In conformity with the provisions of Protocol No. 9, the system was reviewed by the EC Commission after the lapse of the first 3-year period. The Commission came to the conclusion that the ecopoints system constituted an adequate and effective way of reducing pollution caused by the transit of goods by road through Austria and recommended the maintenance of the special regime for the next three-year period (European Commission 1998b:8). 30 Before the expiry of this second period, the Commission will undertake scientific studies in collaboration with the European Environment Agency in order to verify the extent of reduction of harmful substances achieved far. If the objective of a 60 percent-reduction has not been achieved on a sustainable basis, the EU Council can either enact EC legislation guaranteeing an equivalent degree of environmental protection, or the transit regime for Austria will be automatically prolonged for a final period of three years. After its expiry, i.e. by 1 January 2004, Austria will finally have to take over all EC provisions relating to the sector of transit traffic and the carriage of goods without further regard to particular circumstances.
Free Movement of Capital
The principle of the free movement of capital allows capital to move freely between countries and prohibits any discriminating treatment of capital on the grounds of its origin. The relevant provisions of the EEA-Agreement and the ECT (Articles 40-45 of the EEA-Agreement and Articles 73b-73g [65 - 60] of the ECT) are directed to creating a non-discriminating framework for the transfer of capital (loans, investments, etc.) from one member-state to another.
As regards implementation of this principle in Austria, inter alia, a new Kapitalmarktgesetz (Act on the Capital Market) was enacted, entering into force in January 1992, constituting a measure of autonomous adaptation to EC law. 31 On the one hand, this act was issued in preparation for future EEA and EU membership. On the other hand, it also had the positive short-term effect of facilitating participation of Austrian emitters in the European capital market.
In the context of the necessary adaptations within the banking sector, Austria came into conflict with the European Commission over the issue of anonymous savings books with Austrian banks, since Austria has consistently refused to abolish such types of anonymous savings accounts in spite of the respective reproaches by the Commission. This problem is dealt with in more detail below.
By contrast, the field of investments in real estate was exempted from full implementation of EC principles in the EEA. In this area, Austrian provisions have always been restrictive mainly due to fears of a sell-out of real estate to foreigners for their secondary residences. Austria was therefore granted a transitional period of three years for the complete liberalisation of national legislation on the acquisition of real estate. This special regulation was taken over in principle into Article 70 of the Act of Accession 32 and is directed to legislation on secondary residences at the level of the Länder. 33 According to this provision, the Republic of Austria may maintain its existing legislation regarding secondary residences for five years from the date of accession to the EU. This means that up until January 2000, the Austrian Länder, as the constitutionally competent bodies, 34 will have to adjust their rules on secondary residences to the requirements of EC law. 35 During the transitional period, the Länder are allowed to liberalise their legislation on secondary residences if they wish to do so. However, they are prohibited to issue more restrictive legislation than the laws existing at the date of EU accession.
Freedom of Movement for Persons
In principle, Austria already had to implement the whole bulk of EC legislation in the area of the free movement for persons in order to participate in the EEA. At that time, no less than 103 acts of EC secondary legislation had to be implemented in Austria in this field (Hummer 1992:372).
Freedom of movement for persons comprises both the free movement of workers 36 and the freedom of establishment for self-employed persons. 37 According to these principles, workers and self-employed persons from all countries participating in the EEA have the right to live and work in any other EEA country and to receive the welfare benefits available there on the same terms as local workers. Without prejudice to the derogations from the freedom of movement for persons laid down in the ECT, all discriminations on grounds of nationality in respect of employment, wages or other terms of employment are prohibited. Consequently, the right to establish themselves and to run a business or farm or to work in a self-employed capacity had to be guaranteed to the nationals of any EEA country throughout Austria. For this reason, Austria had to create the preconditions for recognising diplomas and vocational qualifications received in the EEA. It should be mentioned in this context that Austria was granted a transitional period of six years to implement the freedom of establishment of dentists and recognition of dentists’ diplomas in the EEA. This concept was taken over into the EU Act of Accession where an analogous special provision can be found in Annex XV. The deadline for full implementation of the freedom of establishment for dentists in Austria was 1 January 1999. In the meantime, the requirements of EC law have been implemented in the new Ärztegesetz 1998 (Medical Profession Act of 1998).
The free movement of persons has been implemented in Austria by the following items of legislation. In 1993, an amendment to the Ausländerbeschäftigungsgesetz (Act on the Employment of Foreigners) was issued, applying to the gainful employment of foreign nationals in Austria. In addition, a large volume of vocational legislation on self-employed activities had to be amended in order to conform with EC law, such as the legislation on trustees, patent agents, medical doctors, and lawyers. 38 In general, many parts of Austrian law were still characterised by protective measures against economic and professional activities of foreigners in Austria. This could be seen, inter alia, in the fact that an extremely high number of national laws provided for reservations on grounds of nationality (Potacs 1998:61). However, the workload of the national legislator in those areas was less than it might have seemed at first glance, since in many cases EC compatibility of national laws could be achieved by minor technical amendments. In a number of cases, it turned out to be sufficient to amend only those provisions providing reservations on the grounds of nationality. This means that the legal requirement of Austrian nationality as a precondition to enjoy certain rights, such as the right to apply for a licence to run a business, the right to set up undertakings or the right to apply for employment in the public sector, provided that the respective position is not connected with the exercise of official authority, was replaced by the requirement to have the nationality of any EEA country. An example of an act thus amended is the Austrian Gewerbeordnung 1973 (Industrial Code of 1973). The former condition of Austrian nationality in order to obtain a licence to carry on a trade or business under the Industrial Code was changed into the requirement of being a national of any EEA country.
With regard to the rules of professions providing for the acknowledgement of vocational training, diplomas and other qualifications obtained in any EEA country, in Austria these too had to be inserted into the national laws. Such amendments could have far reaching effects even on the rules regulating access to the respective profession for Austrian nationals.
An illustrative example in this context can be found in the national legislation on the legal profession, since here the fact that access to the profession had to be opened to nationals from all EEA countries also finally resulted in the need for major changes to those rules governing access to the profession for Austrian nationals in general. The second section of the EWR-Rechtsanwaltsgesetz 1992 (EEA Lawyers Act 1992) constitutes implementation of the Council Directive on the recognition of higher-education diplomas, 39 which was part of the acquis taken over into the EEA. The provisions of this Directive had to be taken into account, inter alia, in the national professional legislation on lawyers since the Directive requires to grant lawyers from all over the EEA the right to apply for recognition of their diplomas in any other participating state. In Austrian legislation, this fact has had a number of consequences.
First of all, the possibility to establish oneself as a lawyer in Austria had to be opened to any lawyer with the nationality of an EEA country. This was reached by an amendment of §1 (2) of the Rechtsanwaltsordnung (a federal statute regulating the profession). Moreover, any provisions entailing the hidden discrimination against foreign lawyers with regard to their establishment in Austria had to be identified and amended.
Therefore, the requirement to have passed a training period of four or five years with an Austrian Rechtsanwalt before being admitted to the bar examination could not be maintained with regard to citizens from EEA countries.
As the contents of lawyers’ professional education vary to a great extent among the EEA countries, Directive 89/48/EEC provides for certain instruments in order to even out the differences and to ensure sufficient knowledge of national law. Austria decided for the possibility to introduce an aptitude test for lawyers from the EEA, who apply for the recognition of diplomas (Article 4 (1/b) of Directive 89/48/EEC). The two other possibilities provided for in the Directive — providing evidence of professional experience and completion of an adaptation period, respectively — were regarded as less suitable. Here, Austria is standing in line with all EC member-states as they have also decided for the aptitude test (Jirovec and Stanger 1992).
However, the level of the aptitude test for foreign lawyers is different to the usual bar examination for Austrian nationals: According to Article 1 (g) of Directive 89/48/EEC, the aptitude test must take account of the fact that the applicant is already a qualified professional in his/her member-state of origin. Therefore, it was not possible to make foreign lawyers take the same exams Austrian nationals have to take as the last step of their training. 40 As a consequence, the Rechtsanwaltsprüfungsgesetz (Bar Examination Act) had to be amended with regard to these differing requirements.
However, this was not the final word, since these amendments regarding the freedom of establishment had further consequences for the national law. It finally proved to be necessary to also adapt those provisions regulating the requirements for training and professional education of Austrian lawyers. On the one hand, the discrimination against Austrian nationals had to be prevented. Such kind of discrimination could have occurred if, due to the long training period after university graduation, it would have taken Austrian nationals longer to be able to practice as independent lawyers than foreign lawyers, who could have established themselves in Austria after having passed a shorter training period in their own countries of origin.
On the other hand, discriminatory treatment among Austrian nationals also had to be avoided, since this would have infringed the fundamental principle of equality in Article 7 of the Austrian Federal Constitution. Such discrimination would have occurred if Austrian nationals had undergone a professional education to become lawyers in an EEA country that provides for a shorter period of training and then afterwards exercised their profession in Austria after taking the aptitude test.
There is no doubt that all other countries participating in the EEA also had to make similar considerations. However, these problems were especially relevant in the case of Austria, since in Austria a practical training of a period of up to seven years after graduating from university was required before admission to the bar examination. This requirement was a lot more stringent in Austria than in any other EEA country. 41
As a consequence of all these considerations, the period of practical training that future lawyers in Austria have to undergo before being admitted to the bar examination was generally cut down to three years in the new § 2 (1) of the Rechtsanwaltsprüfungsgesetz.
However, in the meantime there have been further developments at the EC level. In 1998, a new piece of legislation 42 on the practice of the legal profession in the EU was enacted, which will have to be implemented by the member-states by March 2000. This means that, in the future, any lawyer from an EU member-state will have the right to practice the profession in any other member-state under his/her original professional name. By contrast to the present situation, this will not only apply to lawyers merely providing services in another member-state, but also to lawyers establishing themselves in another member-state. Moreover, it will be possible for a lawyer practising under his/her home-country professional title to gain admission to the profession of lawyer in the host member-state after having effectively and regularly pursued an activity in the host member-state in the law of that state for a period of at least three years (Article 10 (1) of Directive 98/5/EC). In this context, it will be necessary for new amendments to the national law in Austria, too.
Competition Law
In the field of competition law, Austria had to implement all substantive EC law 43 in the EEA (Articles 53-65 of the EEA-Agreement). As far as the procedures to enforce competition law are concerned, there are special rules, laid down in Article 55 of the EEA-Agreement, with regard to surveillance and monitoring bodies. These provisions regulate the interaction between the EC Commission and the EFTA Surveillance Authority.
In Austrian law, these rules were, inter alia, taken into account in the Kartellgesetz-Novelle 1993 (1993 Amendment to the Anti-Trust Act) and in the enactment of the EWR Wettbewerbsgesetz 1993 (EEA Competition Act of 1993). The EWR-Wettbewerbsgesetz mainly provided rules on the organisation of authorities as well as for provisions on conflicts between Austrian and EC competition law.
In the course of Austria’s EU accession, this law was amended with regard to the duties of national authorities interacting with the EC Commission in competition proceedings according to the ECT and was renamed EU-Wettbewerbsgesetz (EU Competition Act). 44 In the context of competition policy, it should also be mentioned that Austria was granted transitional periods in two cases. Under Article 71 of the Act of Accession, Austria was granted a transitional period of three years from the date of accession to progressively adjust its monopoly of manufactured tobacco. However, the adjustments undertaken by Austria in the meantime have been regarded as inadequate by the EC Commission. Therefore, the Commission has started an infringement procedure under Article 169 [226] of the ECT and directed a reasoned opinion to the Republic of Austria in May 1997 (European Commission 1997:1).
The second transitional regime referred to customs duties and licensing arrangements applied to spirit beverages and undenatured ethyl alcohol (Article 72 of the Act of Accession). According to this provision, the Republic of Austria was allowed to maintain, with respect to other member-states, those customs duties and licensing arrangements which it had applied to such products on the date of accession. Since this special regulation expired on 1 January 1996, Austria at the time abolished its customs duties and licensing arrangements with respect to intra-Community trade.
Other Policies
Apart from the four freedoms and competition policy, the EEA-Agreement also provided for common rules with regard to the so-called horizontal or accompanying policies of the EC. 45 Legal fields respected in the EEA-Agreement were e.g. social policy, consumer protection, environmental policy, company law and co-operation in technology and research as well as general, professional, and vocational education. Implementation of the respective provisions led to the enactment of important legal acts within Austrian law. Inter alia, these acts concerned consumer protection law, company law, 46 genetic engineering and environmental law. 47 One of the implementing measures in the field of environmental provisions, the Umweltverträglichkeitsprüfungsgesetz — UVP-G 48 (Act on Environmental Impact Assessment of 1993) will be mentioned here in particular (for a overview, see Petek 1994). This act implements Council Directive 85/337/EEC, 49 taking over part of the EC legislation into the EEA and introducing a novel kind of administrative procedure for granting development approval for certain public or private projects which are likely to have significant effects on the environment due to their nature, size or location.
Directive 85/337/EEC is based on the idea that environmental policy is most effective when preventing the creation of pollution or nuisances directly at source rather than when subsequently trying to counteract their effects. Therefore, a project’s effects on the environment shall be taken into account at the earliest possible stage in all technical planning and decision-making processes, a fact which shall be ensured by laying down a common framework of procedures for the evaluation of such effects ( ibid., Preamble).
In implementing this Directive, a novel approach to assessing environmental effects was introduced into Austrian law. Prior to the UVP-G, the responsibilities to assess the effects of construction works, installations or interventions in the natural surroundings and landscape on certain sectors of the environment ( e.g., water, air, etc.) had been divided between a number of different authorities at the Federal as well as Länder levels. Therefore, for the development of a project, applicants had to turn to a number of different authorities in order to have the effects of their projects assessed with regard to every relevant sector. In principle, those authorities acted independently of each other in accordance with their specific responsibilities.
By contrast, the environmental impact assessment laid down in the UVP-G entails the integral recording and assessment by administrative authorities of all possible environmental effects of the project in question. This is realised by concentrating all administrative procedures for the granting of approval in only one authority, i.e. the respective Landesregierung (Provincial Government). Furthermore, the new model strengthens the public’s position in participating in the proceedings (Articles 6 and 9 of the Council Directive 85/337/EEC). As an example, for the first time so-called Bürgerinitiativen 50 (citizens’ action groups) have been granted the status of legal parties in administrative proceedings on an environmental impact assessment. This means that such a group of citizens has the right to participate in those administrative proceedings as a legal party, which gives them the opportunity to express their opinion in a legally relevant way. Now they can lay claim to the observance of legal provisions on environmental protection as their subjective right. Under the old system, the concept of which parties were allowed to act in such administrative proceedings was far more restricted.
Apart from these reforms, in the course of implementing Directive 85/337/EEC a long-lasting dispute between Federal and Länder authorities concerning the modalities of concentrating administrative proceedings and the (re)-distribution of powers with regard to the granting of development approval for large-scale projects has finally come to an end. 51 As far as the area of environmental law in general is concerned, the applicant-countries Austria, Finland and Sweden had adopted most of the relevant acquis in the EEA, albeit the EEA Contracting Parties were allowed to maintain or introduce more stringent protective measures compatible with the EEA-Agreement (Article 75). 52 In the course of the negotiations on EU accession, differences between EU legislation and the legislation of the applicant-countries had to be addressed. The environment and health became very important and sensitive issues due to the high level of protection in the three candidate-countries. They succeeded in negotiating a new type of special regulation with regard to health and environmental legislation. The special feature of this regulation lies in the fact that traditional transitional periods in favour of new member-states were combined with an undertaking on part of the EU to review its relevant acquis with regard to strengthening the standards of environmental protection. This undertaking is unique in the history of the EC/EU and commits the EU to carrying out the review, but does not give any guarantees on the timing or substance of the outcome.
For Austria, this special regulation was codified in Article 69 of the Act on Accession. According to this article, the provisions referred to in Annex VIII of the Act on Accession did not apply to Austria for a period of four years from the date of accession. The EU’s undertaking to review those provisions within that period in accordance with EC procedures is prescribed in Article 69 (2).
At the end of the transitional period, Austria will have to take over the EC acquis regarding the environment under the same conditions as the old member-states, notwithstanding the outcome of the review process.
However, even after the expiry of the transitional period, the member-state will, in principle, still have the possibility to make use of special clauses of the ECT in favour of higher environmental standards. Concerning the EC’s environmental legislation relevant to the Internal Market, 53 the member-states have the possibility to invoke the safeguard clause of Article 100a (4) [Article 95 (4-6)] of the ECT, which enables them to maintain more stringent national legislation justified on grounds of important environmental requirements in the case of the adoption of harmonising EC measures with a qualified majority in the Council. With the coming into force of the Treaty of Amsterdam, the safeguard procedure of Article 100a (4) of the ECT will be modified to the effect that, as soon as the Commission authorises a member-state to maintain deviating national provisions, the EC will be obliged to review the relevant EC legislation (Article 95 (7 and 8) of the ECT in the Amsterdam version).
The field of environmental norms and standards is thus an example of an area where Austria was not only granted a transitional period to adjust its national law, but where for the first time the EU also undertook to assess the need to adjust its own standards.
In the meantime, the four-year transitional period regarding the environment has elapsed and the review of relevant EC legislation has led to the revision of a number of EC legislative acts (European Commission 1998a). During the review process, the Commission approached the relevant issues on a case-by-case basis in order to find adequate solutions to each problem. Throughout the whole process, there was close co-operation with the member-states. A series of High-Level Co-ordination Meetings with representatives of the three new member-states were held in order to discuss the best ways of proceeding and to assess progress in the process.
In several cases, new Directives were tabled by the Commission that provided higher standards than before. Of special interest to Austria is a new Directive 54 provided for the Auto Oil Programme and concerning new obligatory standards for the benzene content of petrol. This Directive allows only 1 percent of benzene in petrol throughout the EU and will therefore not only go beyond the current EU standard of a maximum value of 5 percent, but also beyond the present Austrian limit value of 3 percent. Until the entry into force of the new limit in January 2000, a special provision of the new Directive allows Austria to maintain its own limit value (European Commission 1998a:12, 3.2.7.).
Another result of the review process is that the Austrian maximum content of 0.1 percent for sulphur in gasoil will become applicable by 1 January 2008 throughout the EU by virtue of a new Directive. Austria will be allowed to maintain its stricter standards throughout the whole period. The Commission tabled its proposal for the new Directive back in 1997, 55 with adoption by the Council and Parliament being expected in early 1999. 56 In other cases, such as regarding the cadmium content of fertilisers, restrictions are set on the national level in the three new member-states and the review process has not led to any definite conclusions yet (European Commission 1998a:11, 3.2.5.). Here, therefore, the Commission proposed a Directive 57 that will enable all three new member-states to keep their standards until December 2001. This Directive was adopted in late 1998. 58 A significant part of the review process concerned different requirements for classifying and labelling over 100 dangerous substances in Austria and Sweden (Euroepan Commission 1998a:7, 3.2.1.). The expert discussions on the criteria for classification led to new agreements on those criteria that were incorporated into Council Directive 67/548/EEC together with the revised classifications. 59 The amendment 60 to the Directive will be adopted in spring 1999. 61 In general it can be said that the review process did in fact lead to a strengthening of EU environmental protection standards. Where this has not been realised, the new member-states will keep their standards for a longer period of time which will be used to continue the review and find EU-wide solutions. It seems that the review clause, as a new instrument used in the context of accession negotiations as well as in the context of legal adjustments, has proved successful for all parties concerned.
The above examples of legal reform in Austria initiated by the take-over of the acquis stand in a long line of further legal measures. Their depiction would, however, go beyond the scope of this article. Nevertheless, the mentioned amendments in Austrian law were meant to illustrate that even in a country like Austria, with its long-standing legal tradition and relationship with the legal orders of other states in continental Europe, the adjustment of national law to the requirements of the acquis may reveal the need for far-reaching reforms in entire areas of law. Besides, the necessary legal reforms were promoted due to such external pressure. The attainment of constructive results could be expedited in some cases where this has been neglected too long due to diverging particular interests.
It is true that by virtue of EU membership the national legislator is deprived of the right to autonomously regulate those areas of law falling within exclusive EC competence. On the other hand, in the course of implementing EC Directives that by definition grant a certain leeway to a member-state, constant action on behalf of the legislator is required. In all those cases, the responsibility to create measures that not only meet EC requirements but also guarantee the greatest possible coherence within national law remains in any case with the national legislator.
Technical Aspects of Legal Adjustment in Austria
After having considered some examples of legal adjustment measures in Austria, we will now deal with the practical approach taken by Austria’s authorities and legislative bodies to the challenge of legal adaptation. 62
Austria’s particular approach towards legal adjustment has mainly been determined by the state’s federal structure. The federal concept entails that there is not only one central legislative body responsible for the enactment of the required adjustment measures, but there are, in addition, the legislative bodies of each of the nine Länder; according to their constitutional responsibilities these bodies have to take the respective measures. Thus, in Austria, be it as a Contracting Party of the EEA or as an EU member-state, the responsibility for implementation of EC law lies with the particular — federal or provincial — legislative body responsible for the respective field of law by virtue of the constitutional distribution of powers. 63 This means that, in the course of the adjustment process, not only the Verfassungsdienst (Constitutional Service) of the Federal Chancellery and the Federal Ministries were entrusted with both the review of national law with regard to its EC conformity and the elaboration of respective adjustment measures. In addition, the Offices of each Provincial Government also had to deal with these demands. The administration was confronted with difficult tasks, particularly due to the fact that significant parts of these offices were not very familiar at the time with EC law.
The approach of the Federal Chancellery Verfassungsdienst in Vienna served as an example for many other authorities. In addition, a number of measures were taken in order to provide assistance to the responsible authorities and to render work more effective. Thus, meetings of legal experts of the Länder were organised at the Verbindungsstelle der österreichischen Bundesländer in Vienna, an institution promoting contacts and co-operation among the Länder. Furthermore, the Ständiger Integrationsausschuß der Länder (Standing Integration Committee of the Länder) was established by the Decision of the Landeshauptmännerkonferenz (Conference of the Governors of the Länder) in 1990. The Committee also served as a platform for consultations on questions of legal adjustment during the integration process.
However, this was not the first initiative in that respect. Since 1987, the Austrian Government had subjected all draft legislation to an assessment concerning its compatibility with EC law. In 1987, the Arbeitsgruppe EG-Föderalismus (Working Group on EC and Federalism) had been created at the federal level. Its particular task was to deal with questions of the European integration of federal states. Furthermore, by virtue of a Decision of the Federal Government the Projektgruppe ‘Rechtsreform’ (Project Group on Legal Reform) was established in the same year. This group had the important task to constantly supervise the EEA legal reform with regard to legal issues and to co-ordinate and monitor the timetable included.
At the Länder level, a convention was concluded based on a Decision of the Standing Integration Committee. This convention provided for a particular way to divide up tasks among the Länder in the drafting of adjustment and implementation measures. Thus, every Land was entrusted with the elaboration of EC-compatible draft legislation for a certain range of subjects that were later exchanged between the Länder. That way of acting was, inter alia, directed towards increasing the coherence of different national adjustment measures in those areas falling within the legislative powers of the Länder.
Adjustment Problems and Infringement Proceedings against Austria
In spite of the efforts undertaken to promote implementation of EC law in Austria, it is a fact that Austria’s implementation record of EC directives has been disappointing compared to that of other member-states.
In 1995, the first year of Austrian membership, Austria had only notified 84.2 percent of the necessary implementation measures with regard to EC Directives (European Commission 1995:12); in 1996 this figure improved to 88.28 percent, while for example Sweden then ranked close to the top with 93.80 percent (European Commission 1996:14). Due to those figures, Austria was in penultimate place among all member-states in both years. In 1997, Austria improved its implementation rate to 94.3 percent (European Commission 1997:9).
The precise reasons for these shortcomings have not yet been ascertained. They can, however, be explained in part by the state’s federal structure, which implies that in certain fields of law, for example in public procurement matters, not only the Federation, but also each of the nine Länder has legislative constitutional powers. In such cases, consequently, in Austria a single EC Directive has to be implemented by nine or even ten legislative bodies. Austria is now planning to follow the successful example of Germany, also a federal state, to encourage competition among the Länder with regard to their legislative responsibilities under EC law (Hausmaninger 1998:88).
Apart from this, the fact that under Article 18 of the Austrian Federal Constitution all administration must be based on statutory law (so-called principle of legality) has contributed to the delays in implementation. Owing to this constitutional principle, in most cases Community law has to be implemented in the form of statutory law rather than by the generally less time-consuming enactment of regulations by administrative authorities. 64
Last but not least, as with other countries, Austria is also facing the problem that the areas of jurisdiction of the different ministries and offices do not always correspond to the scheme under EC law. The result is that the drafting of implementing laws for a single EC Directive has to be carried out by a number of different ministries which, in turn, have to harmonise their respective measures. Another consequence of the division of responsibilities is that the workload was unevenly distributed between the authorities so that those burdened with too much work had to establish their priorities and had to accept shortcomings in other areas. 65 During preparations for EEA and EU membership, the situation was further aggravated by the fact that since the early nineties the Austrian public administration sector — responsible for drafting of most of the bills in the legislative process — has been affected by strong reductions in staff due to budgetary reasons. This has led to an additional strain on the relevant bodies and offices and seems to have contributed to the delays (Potacs 1998:62).
The shortcomings in Austrian implementation efforts had their consequences at the European level. During 1997, the European Commission 66 addressed 93 letters of formal notice and 38 reasoned opinions under Article 169 [226] of the ECT to the Republic of Austria on the grounds of infringement of ECT provisions. 67 Further, at that time the first proceedings had already been instituted against Austria before the ECJ. These proceedings deal with an alleged breach of EC Directives in the field of public procurement in the course of the construction of a new government and cultural district in the city of St. Pölten, the capital of Lower Austria. 68 Not all of the said complaints of the Commission concern the issue of shortcomings in legal adjustment in the narrower sense. In 1997, Austria was reproached for non-compliance of national implementing measures with respective EC Directives in only five cases. In 10 cases, Austria had to take the responsibility for infringements of ECT provisions, Regulations and Decisions; in 15 cases implementing measures had been inadequately applied. As many as 68 of the letters of formal notice and 33 of the reasoned opinions were based on the simple fact that Austria had not (or not in due time) notified its implementing measures to the European Commission (1997:88ff.).
In the meantime, a number of proceedings against the Republic of Austria have entered the judicial stage since no agreement has been reached between the Commission and Austria. One of these claims against Austria finding a lot of resonance in Austrian media is directed against the repeated increase of tolls on the motorway over the Brenner ( Brennerautobahn), an important north-south connection through the Tyrolean Alps from Germany to Italy. The Brenner-motorway is strongly frequented by heavy goods vehicles in transit. This situation is aggravated by the fact that the Brenner-motorway constitutes an alternative to the passage through Switzerland, which charges high tolls on heavy goods vehicles. Austria has, inter alia, been complaining about ecological damage and excessive noise levels along the Brenner route. In July 1995 and February 1996, Austria decided to increase the toll for using the Brenner-motorway. It is of the opinion that these measures are compatible with EC law. 69 However, the European Commission criticised this increase as constituting an infringement of Council Directive 93/89/EEC of 1993. 70 After lengthy negotiations during informal proceedings, the Commission finally raised the claim before the ECJ on 29 May 1998. 71 Strictly speaking, however, the main issue of this case, as well as of case C-328/96 mentioned above, is not a reproach of inadequate legal adjustment. The latter case deals rather with non-respect of EC public procurement provisions in the course of particular procurement proceedings, while the Brenner case deals with subsequent unilateral measures in deviation from EC law.
By contrast, the Commission has raised another claim against Austria, which is of interest in the framework of assessing legal adjustment. This case deals with the Commission’s reproach of an infringement of Council Directive 91/308/EEC 72 on the prevention of money laundering by the Republic of Austria. The claim of the Commission is directed against the maintenance of anonymous savings accounts 73 with Austrian banks. 74 Such anonymity had originally also existed for securities accounts with Austrian banks, but was removed by an amendment of the Bankwesengesetz (Banking Act) in 1996. 75 In the EEA, Austria had undertaken to implement Directive 91/308/EEC in its entirety. 76 However, the Bankwesengesetz implementing this Directive does not seem to comply with Article 3 (1) of the said Directive. This provision provides that when entering into business relations credit and financial institutions must require identification of their customers by means of supporting evidence, particularly when they open savings accounts. In clear contrast to this provision, § 40 (1) of the Bankwesengesetz expressly exempts the opening of savings accounts from this general duty of identification. Austria refuses to amend this and certain other provisions of the Bankwesengesetz as well as the Strafgesetzbuch (Penal Code) contested in this context. It points out that, in its opinion, the Austrian savings accounts, due to their legal conception, are not suitable for the purposes of money laundering. Therefore, the aims of Directive 91/308/EEC, to prevent anonymity from being misused in money laundering, would also be met if the anonymity of savings accounts was maintained in Austria. In other words, in Austria’s opinion all legal adjustment measures necessary in order to realise the aim of the Directive have already been taken. 77
The problem is, however, that Directive 91/308/EEC prescribes in clear wording the duty of identification in general for entering into any kind of business relation with credit and financial institutions, which definitely also includes the opening of savings accounts. Thus, it will be decisive for the ECJ’s decision in this matter whether the meaning of the provisions of the Directive is derived from their clear wording or from their aims. Given that the ECJ, in the sense of the so-called acte clair doctrine, 78 sometimes abstains from any other method of interpretation when confronted with a clearly worded provision, it appears that Austria’s chances of success here are not too high (Hausmaninger 1996).
If no agreement is reached in these matters between the Commission and Austria, that would be the first time since Austria entered the EU that the ECJ will directly decide on the compatibility of Austrian national law with EC law.
The Position of the Individual in the New Legal Framework
When considering such new interlinkages between national and EC law, the important role the individual plays in the legal system should also be mentioned.
In fact, the incorporation of EC law into the Austrian legal order also implied new possibilities for the legal protection of individuals. It must be emphasised that a large number of informal proceedings as well as infringement proceedings against Austria were instituted by the Commission after individuals or interest groups had referred complaints to the Commission (Potacs 1998:65).
Moreover, according to the ECT, different kinds of formal claims and proceedings are also available to the individual. Apart from applications for annulment under Article 173 [230] of the ECT, which can be made by natural or judicial persons under particular circumstances in order to directly contest the laws of EC bodies, the preliminary proceedings under Article 177 [234] of the ECT open a way to the ECJ for individuals. The purpose of these proceedings is to enable national courts to refer to the ECJ questions on the interpretation of Community law and questions on the validity of EC secondary legislation with which they are confronted in the course of pending proceedings. National courts of last resort are even under the obligation to refer such questions to the ECJ. The Austrian courts can be commended for having been active in referring questions to the ECJ for preliminary rulings. In 1997, the Commission counted 35 preliminary proceedings of Austrian origin, 19 thereof stemming from High Courts (European Commission 1997:195). While only six preliminary references came from Austria in 1996, this number has now increased rapidly. So far, about 50 preliminary proceedings of Austrian origin have been initiated, due to doubts regarding interpretation of EC law. Most of these interpretation problems were observed in the fields of public procurement, free movement of goods, consumer protection, brand protection, rules on the acqui sition of real estate, free movement of workers, social policy and tax law. 79
Generally, it can be stated that both the High Courts 80 and lower courts as well as certain authorities qualifying as ‘tribunals’ within the meaning of Article 177 [234] of the ECT 81 have fully accepted the co-operation with EC institutions and made references to the ECJ. These courts and authorities have contributed substantially to the integration of EC law into the Austrian legal order by asking the ECJ for an accurate interpretation of EC provisions that are to be applied in the course of national proceedings and by thereupon ruling in line with the ECJ’s binding judgement. This integration has been further promoted by the fact that all the Austrian High Courts have expressly acknowledged the basic principles of EC law, i.e. the principles of direct effects and of the primacy of EC law as well as the principle of EC-compatible interpretation of national law (Potacs 1998:66).
Concluding Remarks
In the course of an overall assessment of the impacts of Austria’s membership in the EEA and in the EU on its own internal legal order, it becomes clear that the respective challenges have led to profound changes in several fields of law.
Participation in the Common Market has not only required wide-ranging reforms of the economic structure. It has also led to a distinct liberalisation of the rules on employment and self-employed activities which before had rather been characterised as being cut off from foreign activities. In business law as well as company law, important structural adjustments were made due to European influence. In addition, with regard to administrative reforms, the requirements of legal adjustment have also accelerated overdue reforms.
On the other hand, however, it is evident that Austria has not set a perfect example in fulfilling its obligations under EC law. The performance in the implementation of EC Directives was not satisfying during the first years of Austria’s EU membership. Here, Austria will have to prove that it is able to improve its position in a sustainable way. In any case, it can be considered a positive sign that Austria’s courts have given a positive example with regard to respect of EC law and co-operation with European institutions.
May 1999
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Endnotes
*: Ulrike Hiebler is Assistant at the Research Institute of European Law, University of Graz.
The author would like to thank Prof. Hubert Isak for his helpful comments on earlier drafts of this article. Back.
Note 1: After the end of the allied occupation of Austria in 1955, Austria adopted the status of so-called everlasting neutrality following the pattern of Swiss neutrality. In national law, Austria’s neutrality is based on the Bundesverfassungsgesetz über die Neutralität Österreichs (Federal Constitutional Law on the Neutral Status of Austria) of 26 October 1955, Bundesgesetzblatt (BGBl) (Federal Legal Gazette) 1955/211. In international law, it is based on the respective notifications of 14 November 1955 to all the states that had diplomatic relations with Austria. The legal undertakings connected with Austrian neutrality are of a purely military character: Article I (2) of the Bundesverfassungsgesetz über die Neutralität Österreichs stipulates as the only explicit undertakings that Austria will not become a member of any military alliances and will not accept any military bases of other countries in its territory. According to the prevalent interpretation of Austrian neutrality in public international law, however, there are also political aspects of neutrality that shall be respected even in times of peace. The concrete content of such political aspects or undertakings has been subject to various changes in interpretation over the last few decades. Up to the 1970s, Austria interpreted the political aspects of neutrality as being directed towards an independent position in terms of its economy and foreign trade. As a consequence, it seemed unacceptable to accede to an economic community with a common customs policy and a common policy of foreign trade, particularly considering the possibility of being required to participate in economic embargoes against third countries. This interpretation of Austrian neutrality used to be very much supported by the Soviet Union, since they were opposed to closer connections between Austria and Western Europe. During the 1970s and particularly in the 1980s, Austria gradually adapted its interpretation of political neutrality as a reaction to geopolitical developments, such as the end of the East-West conflict. In the context of the Gulf War against Iraq at the beginning of the 1990s, the view that participation in sanctions adopted by the UN Security Council in no way conflict with Austrian neutrality was finally accepted. Today, the concept of neutrality is more or less reduced to the legal core elements of neutrality in the military field. For more information on the issue of neutrality and EC membership, see European Commission (1992:19-21); Hummer (1996:11-46); Zemanek (1989:59-72). An overview of Austrian foreign affairs since the 1960s and the process of Austria’s accession to the EU can be found in Hausmaninger (1998:13-6, 84-6). Back.
Note 2: For more information on Austria’s membership in the EFTA and on the relationship between the EC and the EFTA, see Hummer (1994; 1992); Schweitzer and Hummer (1996:217-20); Thun-Hohenstein and Cede (1996/1995:22-30); Woschnagg (1996a). Back.
Note 3: These agreements were based on Article 113 [133] E(E)C Treaty (ECT). There was no bilateral agreement concluded between Austria and the European Atomic Community (EURATOM) due to the fact that no nuclear industry has ever been established in Austria. This rejection of nuclear energy use was mainly based on considerations of technical security and ecological aspects, since the country is rich in hydroelectric power.
When Austria became an EU member in 1995, it consequently also had to accede to the EURATOM. Austria as well as the other member-states that do not have nuclear industries of their own now fully take part in the legislative bodies as well as in the financing of the EURATOM. However, EURATOM membership does not affect the general national policies regarding nuclear energy. For further information on the substantive law of the EURATOM as well as Austria’s membership, see Schweitzer and Hummer (1996:527-41). Back.
Note 4: The numbers in brackets indicate the new numbering of the Treaty of Amsterdam. Back.
Note 5: According to Article 238 [310] of the ECT, the EC can conclude association agreements with one or more third countries, or international organisations, involving mutual rights and duties, common proceedings and common procedures. A third country entering into an association with the EC approaches the process of integration within the EC, without, however, becoming a member-state or being represented in the European institutions. Nevertheless, such a relationship between the EC and (a) third country is frequently called ‘associated or affiliated membership’. For implementation of the association agreement, proper joint institutions are created composed of representatives of the contracting parties on equal terms. In general, three different types of association agreements based on Article 238 [310] of the ECT can be distinguished:
Note 6: Austria’s decision to apply for EC membership in 1989 can be looked at from different angles. In terms of world politics, it is a fact that the decline of the communist bloc and of the Soviet Union led to increased political leeway for Austria, since the Soviet Union in particular had always been sceptical of Austrian participation in European integration. In any case, one of the main reasons for the Austrian decision to finally apply for full membership was the fact that Austria feared the effects of the strengthening of the internal market as traced out in the European Commission’s White Paper on the Completion of the Internal Market of 1985 (COM(85) 310 final) and confirmed in the Single European Act (SEA) of 1985. This EC policy of concentrating on integration and liberalisation within the EC rather than extending its relations with the EFTA countries convinced the Austrian government that applying for EC membership was the only way to reach Austria’s objective to fully participate in the internal market (Hummer 1996:22-4). Back.
Note 7: The question whether the EEA could constitute a real alternative to EC membership is dealt with further in Mederer (1990:393-409). Back.
Note 8: These are e.g. social policy, consumer protection, environmental control. Back.
Note 9: In this context, it should be mentioned that Austria had been striving for EC conformity of national law as far as possible already before that date. For this reason, in 1987 a project group on legal reform was established by the Austrian Government. Back.
Note 10: For an overview of the EU accession negotiations, in particular giving information on the structure of the negotiations, see Woschnagg (1996b:129-42). Back.
Note 11: Bundesverfassungsgesetz über den Beitritt Österreichs zur Europäischen Union ( BGBl 1994/744). The new legal framework was codified in Austrian constitutional law by the so-called EU-Begleit-BVG ( BGBl 1994/1013), which introduced a new section headed “European Union” into the Austrian Federal Constitution. Back.
Note 12: Treaty on the Accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the European Union of 24 June 1994. OJ 1994 C 241/9. Back.
Note 13: EWR-Bundesverfassungsgesetz ( BGBl 1993/115). Back.
Note 14: The technique of the incorporating EEA Joint Committee’s decisions into the national legal order is dealt with in Hummer (1994:9). Back.
Note 15: The complex procedures of decision-making in the EEA Joint Committee are dealt with in detail in Hummer (1992:369). Back.
Note 16: An extensive list of the Austrian transitional periods within the EEA can be found in Rack (1992:373-4). Back.
Note 17: The national constitutional structure of competencies is left untouched by EC law. Therefore, in principle, it is always the national body competent according to the national Constitution that is responsible for implementation of EC law.
For the figures indicated in this text, see Österreichische Bundesregierung (1992). Back.
Note 18: The field of public procurement law required major amendments in view of future membership in the EEA/EU. For further reading on this subject, see Gutknecht (1991), Korinek (1991) and Holoubek (1991). For an overview of the results of the reform of public procurement law in Austria, see Grussmann (1994). Back.
Note 19: A good overview of the Austrian implementation measures in preparation for participation in the EEA can be found in Stadler (1995:VI.27). For particular references to the Austrian legal acts mentioned in this article, see Hiebler (1999). Back.
Note 20: It would go beyond the scope of this article to deal with such examples in detail. The case of the amendment to the Product Liability Act of 1993, undertaken as part of preparations for participation in the EEA, is critically appraised by Posch (1992), who listed a number of serious shortcomings in the amendment bill. Back.
Note 21: The relevant treaty provisions are Articles 36-39 of the EEA-A and Articles 59-66 [49-55] of the ECT. Back.
Note 22: By contrast to other European systems, e.g. the English legal system which draws a difference between barristers and solicitors, in Austria there is only one type of lawyer ( Rechtsanwalt). The Rechtsanwalt enjoys a monopoly in professional legal representation before all courts and administrative authorities. Back.
Note 23: Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services. OJ 1977 L 78/17. Back.
Note 24: Case 427/85, Commission vs. Federal Republic of Germany ( ECR 1988, 1123). Back.
Note 25: In Austria, in principle, in proceedings not going exceeding a certain amount of money it is not necessary to be represented by a lawyer. Back.
Note 26: Transport services are regulated in Articles 47-52 of the EEA-A. Back.
Note 27: Protocol No. 9 on road, rail and combined transport in Austria ( OJ 1994 C 241/361). Back.
Note 28: Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded ( OJ 1994 C 241). Back.
Note 29: Basically, every member-state holds a certain contingent of transits of goods by road through Austria in combination with a certain amount of ‘ecopoints’. A certain number of ecopoints is consumed for each transit. The actual number of ecopoints consumed depends on the technical equipment of the vehicle used and on the extent of pollution caused by it. Better equipped and less polluting vehicles consume a smaller amount of ecopoints for each transit and can therefore do more transits through Austrian territory until the complete amount of ecopoints is exhausted. Back.
Note 30: This report also contains an analysis of the way the ecopoints system functions. Back.
Note 31: The Act on the Capital Market was modelled on the Council Directive 89/298/EEC of 17 April 1989, co-ordinating the requirements for the drawing-up, scrutiny and distribution of a prospectus to be published when transferable securities are offered to the public ( OJ 1989 L 124/8). Back.
Note 32: Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded ( OJ 1994 C 241/35). In the context of Article 70 of the Act of Accession, it must be pointed to the fact that this provision is of wider scope than its predecessor in the EEA. It not only contains a transitional period for the adaptation of Austrian law on secondary residences with regard to the provisions on the free movement of capital, but also with regard to the free movement of persons and the freedom to provide services. For a discussion on the consequences of this extension of the special regulation, see Lienbacher (1998:327-8). Back.
Note 33: Today the powers for regulating real estate acquisition lie with the Austrian Länder (provinces) and not with the Federation. For more information on the distribution of powers and competencies with regard to legislation on real estate acquisition, see Herbst (1993) as well as Walzel von Wiesentreu (1993). Back.
Note 34: See Article 10 (1/6) B-VG (Bundesverfassungsgesetz — Federal Constitution). Back.
Note 35: Currently in EC law, both trade and investments in real estate are not yet regulated in a comprehensive and easy-to-survey manner. The Commission announced in 1990 that it was planning to draft a Directive on the issue of secondary residences ( OJ 1990 C 9/25); this draft, however, has not yet been published. Nevertheless, it is the ECT provisions on free movement of workers, freedom of establishment, freedom to provide services and free movement of capital that are relevant to the issue of trade in real estate and the acquisition of land by EU as well as EEA citizens in another member-state. The provisions on free movement of persons, inter alia, comprise the right to take residence in the host member-state, to buy housing and to acquire land as far as necessary for the exercise of the freedom. Free movement of capital also comprises the right to invest in real estate in other member-states. For a comprehensive overview of all EC legislation with a bearing on trade in real estate as well as for detailed considerations in the context of each freedom, see Hörtenhuber (1995:221-8). Hörtenhuber also points out that, by contrast to the situation under Council Directive 88/361/EEC of 24 June 1988 for implementation of Article 67 of the Treaty ( OJ 1988 L 178/5), which exempted the issue of secondary residences from the field of application of the Directive (Article 6 (4) of Directive 88/361/EEC), the revised ECT provisions on the free movement of capital (Article 73ff [56] of the ECT), that override the ‘older’ Directive are now also applicable to investments in secondary residences (Hörtenhuber 1995:226).
The right to acquire housing respectively land is further laid down in secondary legislation such as in Council Regulation 1612/68/EEC of 15 October 1968 on freedom of movement for workers within the Community ( OJ 1968 L 257/2; latest amendment by Council Regulation 2434/92/EEC of 27 July 1992 amending Part II of Regulation 1612/68, OJ 1992 L 245/1), Council Directive 90/364/EEC of 28 June 1990 on the right of residence ( OJ 1990 L 180/26), and Council Directive 90/365/EEC of 28 June 1990 on the right of residence for employees and self-employed persons who have ceased their occupational activity ( OJ 1990 L 180/28). The two last mentioned Directives, however, only imply the right to acquire land for primary, but not for secondary, residence in the host member-state (see the respective provision in Article 2 of both Directives).
As far as the present legislation on secondary residences of the Austrian Länder is concerned, in most of the Länder the acquisition of real estate for the purpose of a secondary residence was made subject to an authorising procedure. In such cases, for example, it is only possible to acquire real estate and to invest in real estate for a secondary residence on the condition that the applicant presently either has his/her primary residence in Austria or has had his/her primary residence in Austria for a certain period of time ( e.g. for at least five years) at any time prior to the application. In a declaration, applicants have to state the intended use of the real estate they want to acquire. They render themselves liable to prosecution if misrepresentations are given in their declarations. The requirements of having a primary residence in Austria or of having lived for a certain period of time in Austria before applying for the acquisition of a secondary residence in their effect discriminate against citizens of other member-states, since in most cases they will not be able to fulfil such conditions easily. Therefore, the Länder provisions laying down such requirements may only be upheld during the transitional period. From January 2000 onwards, EU and EEA citizens must be guaranteed non-discriminatory treatment in the context of secondary residences, which means that those provisions also non-discriminatory in law, but still discriminatory in fact will have to be abolished.
For the sake of completeness, however, it should be emphasised that, according to the Joint Declaration on secondary residences in the Act of Accession ( OJ 1994 C 241/382), there is the possibility to take national measures on secondary residences even after the expiry of the transitional period, provided that they are necessary for land-use planning and environmental protection and apply in a non-discriminatory way to nationals of the member-states in conformity with the acquis.
For information on the issue of Länder rules on a primary residence that are incompatible with EC law and constitute an infringement of the ECT, since they are not covered by the special regulation, see Lienbacher (1998:328-30). The issue of trade in real estate in the context of EC law was dealt with further in Eilmansberger (1993:5-9), and in Berka (1994:289-98). Back.
Note 36: Articles 28-30 of the EEA-A and Articles 48-51 [39-42] of the ECT. Back.
Note 37: Articles 31-35 of the EEA-A and Articles 52-58 [43-48] of the ECT. Back.
Note 38: A comprehensive list of the legislative acts involved is contained in Stadler (1995:VI.27). Back.
Note 39: Council Directive 89/48/EEC of 21 December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years’ duration ( OJ 1989 L 19/16). Back.
Note 40: The legal basis for the bar examination is the Austrian Rechtsanwaltsprüfungsgesetz (Bar Examination Act). Back.
Note 41: In all other countries, postgraduate periods of formation and training take less than four years. Back.
Note 42: Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate the practice of the legal profession on a permanent basis in a member-state other than that in which the qualification was obtained ( OJ 1998 L 77/36). Back.
Note 43: This means Articles 85-89 [81-85] of the ECT and the secondary law derived from these provisions. Back.
Note 44: An extensive analysis of adjustment measures in Austrian competition law due to participation in the EEA can be found in Hanreich (1993a) and Hanreich (1993b). Back.
Note 45: See Articles 66 and 78 of the EEA-A. Accompanying policies are such EC policies that were not originally provided for in the ECT, and had thus to be based on Article 235 [308] of the ECT. In the case of sectoral policies, by contrast, the ECT contains special legislative provisions, e.g. agricultural policy. In the course of the treaty amendments carried out during the last decade, a number of accompanying policies was regulated in the ECT itself, so that today they comprise part of the sectoral policies.
If a sectoral policy contains a cross-section provision, i.e. a provision of the ECT determining that the requirements of the respective policy also have to be respected in all other EC policies, it constitutes a so-called horizontal policy. Some examples of such horizontal policies are environmental policy (Article 130r (2) [174] ECT), cultural policy (Article 128 (4) [151] of the ECT), health policy (Article 129 (1/3) [152] of the ECT) and industrial policy (Article 130 (3/1) [157] of the ECT). Back.
Note 46: In the field of company law, major amendments were introduced into Austrian law due to the effects of European integration. The Gesellschaftsrechtsänderungsgesetz 1993 (Company Law Amendment Act of 1993) and the EU-Gesellschaftsrechtsänderungsgesetz 1996 (EU-Company Law Amendment Act of 1996) mainly led to important amendments of the provisions applicable to joint-stock companies, but they also introduced a number of amendments into the banking sector. The reason for the enactment of these acts was the need to adjust Austrian company law to the requirements of the twelve Council Company Law Directives of the EC. The EU-Company Law Amendment Act of 1996 entails the hitherto most important amendment of the Austrian Aktiengesetz (Stocks Act), which is due to the fact that the entire issue of transfer of enterprises or assets has been newly regulated in a unified entity. It came into force on 1 July 1996 and is applicable to the financial years beginning not earlier than that date. Back.
Note 47: Verbraucherschutz-Novelle 1993 (1993 Amendment of the Consumer Protection Act), Verbraucherkreditverordnung (Regulation on Consumer Credits 1994), Gentechnikgesetz (Act on Genetic Engineering 1994), Gesellschaftsrechtsänderungsgesetz (Act on the Amendment to the Company Law of 1993), Umweltinformationsgesetz (Environmental Information Act of 1993) and the Umweltverträglichkeitsprüfungsgesetz UVP-G (Act on Environmental Impact Assessment of 1993). Back.
Note 48: The UVP-G entered into force on 1 July 1994. Back.
Note 49: Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public or private projects on the environment ( OJ 1985 L 175/40). This Directive was amended by Council Directive 97/11/EC of 3 March 1997 amending Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment ( OJ 1997 L 73/5). By virtue of this amendment, the rules on the assessment procedure were supplemented and more precisely defined. Back.
Note 50: A citizens’ action group is a group of a minimum 200 citizens of the municipality in which the project shall be placed or of a directly adjacent Municipality, that are entitled to vote and that make a joint submission (statement) to the authority in the environmental impact assessment proceedings. Back.
Note 51: Problems that occurred in the context of implementation of Council Directive 85/337/EEC are considered in Schmelz (1995:931-45). Back.
Note 52: A good overview of the relevance of EC environmental law for the EEA is given in Scherer (1993:140-63). Scherer also considers the issue of the scope left to the Contracting Parties for national environmental action in the general framework of the EEA, however, not particularly focusing on Article 75 of the EEA-A. Back.
Note 53: The wording refers to such legislation based on Article 100a [95] of the ECT. Back.
Note 54: Directive 98/70/EC of 13 October 1998 of the European Parliament and of the Council relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC ( OJ 1998 L 350/58). This Directive repeals Council Directive 85/210/EEC on the approximation of laws of the member-state concerning the lead content of petrol ( OJ 1985 L 96/25). Back.
Note 55: Proposal for a Council Directive relating to a reduction of the sulphur content in certain liquid fuels and amending Directive 93/12/EEC. COM (97) 88 of 12 March 1997, OJ 1997 C 190/9. This proposal was amended by document COM (98) 385 final of 18 August 1998, OJ 1998 C 259/5. Back.
Note 56: At the time of writing, this Directive had not yet been adopted. Back.
Note 57: COM (98) 44 final, OJ 1998 C 108/83. Back.
Note 58: Directive 98/97/EC of the EP and of the Council of 22 December 1998 amending Directive 76/116/EEC on approximation of the laws of the member-states relating to fertilisers, as regards marketing in Austria, Finland and in Sweden of fertilisers containing cadmium ( OJ 1999 L 18/60). Back.
Note 59: Council Directive 67/548/EEC on the approximation of laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances ( OJ 1967 L 196/1), as amended by Directive 96/56/EEC of the European Parliament and the Council of 3 September 1996 ( OJ 1996 L 236/35). The last adaptation to technical progress had been made by Commission Directive 97/69/EEC of 5 December 1997 adapting to technical progress for the 23rd time Council Directive 67/548/EEC ( OJ 1997 L 343/19). Back.
Note 60: Proposal for a Directive of the European Parliament and Council amending Council Directive 67/548/EEC as regards the labelling of certain dangerous substances in Austria and Sweden. COM (98) 561 of 30 October 1998, OJ 1998 C 374/15. Back.
Note 61: At the time of writing, this Directive had not yet been adopted. Back.
Note 62: This topic has, inter alia, been dealt with in Rack (1992:373-9). In particular, this article also deals with the experiences of the Austrian Länder with legal reform in the context of EEA/EU membership. Back.
Note 63: The basic distribution of legislative and executive powers between the Federation and the Länder is laid down in Articles 10 to 15 of the Bundesverfassungsgesetz (B-VG) (Federal Constitution) of 1920. The B-VG-Novelle 1994 (1994 amendment to the Federal Constitution) introduced a new chapter on European integration into the Constitution. Article 23d (5) B-VG, part of this new chapter, leaves the traditional distribution of powers untouched, but stipulates that in the case of a provincial legislator’s default regarding implementation of EC law, the respective legislative powers temporarily pass to the federal legislator. The reason for this provision lies with the fact that EC law addresses and binds the member-states as such and does not take the particular internal distribution of powers in the member-states into account. It is therefore the member-state as such that has to face the consequences of its provinces’ default in the EC context, e.g. infringement proceedings on the grounds of non-implementation of EC Directives in due time against the member-state. Back.
Note 64: Article 18 (1) of the Federal Constitution stipulates in very brief terms that all state administration may be exercised exclusively on the basis of statutory law. The consequence of this provision is twofold: firstly, all administrative bodies and authorities can only act on the condition that they are authorised to act by law. This aspect of the provision is of democratic interest, since it implies the subordination of all other state institutions under the legislation (the Federal Parliament as well as the Länder parliaments). Secondly, the legislation is obliged to determine administrative action in a sufficiently clear and precise manner. This aspect of the provision is directed to binding the administration by firm rules in order to make administrative action predictable for the citizen. Compliance with these rules that are inherent in Article 18 of the Federal Constitution is monitored by the Constitutional Court and the Administrative Court. The Constitutional Court even has the power to repeal a national law on the grounds of non-compliance with the principle of legality.
With respect to the legal instrument of regulations (in the sense of normative acts with general application issued by administrative bodies), Article 18 (2) of the Federal Constitution authorises all administrative bodies to enact such regulations within their respective fields of competence, however, only under the condition that these regulations can be based on a statutory law (enacted by the legislation). The strict principle of legality applies to all kind of administrative action connected with the exercise of official authority in Austria.
For detailed information on the Austrian principle of legality, see Öhlinger (1997:150, 232-9). Back.
Note 65: Particularly in the context of the legal adjustment process for participation in the EEA, some commentators came to the conclusion that insecurity as to the realisation of the EEA project, which was mainly due to the need for a referendum in Switzerland, had negative effects on the swift progress of the reform. See Rack (1993:276). Concerning the topic of difficulties with legal reform in Austria, see also Potacs (1998:60). Back.
Note 66: Under Article 155 [211] (1) of the ECT, the Commission is entrusted with monitoring the observance of EC law. As part of this task, it also controls the application of primary and secondary legislation by the member-states. The figures given in this chapter were published in: European Commission (1997: Annex I and II). Back.
Note 67: Infringement proceedings under Article 169 [226] of the ECT are divided into several stages. After a stage of informal proceedings, the first stage of formal proceedings is initiated by a letter of formal notice of the Commission addressed to the member-state concerned. In what follows, the member-state is called upon to explain its legal opinion or to submit to the Commission’s opinion. If no agreement is reached on the question, the Commission delivers a ‘reasoned opinion’ to the member-state. Only if the member-state does not comply with the reasoned opinion in due time is the Commission entitled to bring an action against the member-state before the ECJ. This constitutes the beginning of the judicial stage of the infringement procedure. For more information on the infringement procedure, see e.g. Schweitzer and Hummer (1996:143-5); Chalmers (1998:336-63). Back.
Note 68: Case C-328/96, Commission vs. Austria. The Commission’s claim against Austria was registered at the ECJ on 7 October 1996. See OJ 1996 C 354/21. The opinion of the Advocate General, in this case suggesting the conviction of Austria on grounds of infringement of EC legislation, was presented to the ECJ in its session of 19 January 1999. Back.
Note 69: These measures do not fall within the special regime applying to transport services through Austria dealt with previously in this article. Austria instead tries to justify these measures on the grounds that the increased tolls would correspond to the cost of maintenance of the relevant section of the motorway. Back.
Note 70: Council Directive 93/89/EEC of 25 October 1993 on the application by member-states of taxes on certain vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures ( OJ 1993 L 279/32). Back.
Note 71: Case C-205/98, Commission vs. Austria. See OJ 1998 C 234/20. Back.
Note 72: Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering ( OJ 1991 L 166/77). Back.
Note 73: In Austria, the term ‘savings books’ is frequently used when talking about savings accounts, although in the strict sense of the word the saving book is only the document relating to the account. Back.
Note 74: Case C-290/98, OJ 1998 C 299/18. The claim was referred to the ECJ on 28 July 1998, accusing Austria of infringing Articles 2 and 3 (1, 5 and 6) of Directive 91/308/EEC. Back.
Note 75: Anonymity of securities accounts was not only contrary to Directive 91/308/EEC, but also to Council Directive 89/592/EEC of 13 November 1989 co-ordinating regulations on insider dealing ( OJ 1989 L 334/30). As far as the compatibility of the amendment with Directive 91/308/EEC is concerned, the Commission is not yet entirely satisfied with the Austrian solution. Back.
Note 76: The respective provisions are Article 36 (2) and Annex IX Number 23 of the EEA-A. Back.
Note 77: The Austrian point of view is certainly also based on the facts that anonymous saving accounts are traditionally very popular among the Austrian population and that Austrian banks have great interest in their maintenance. See Potacs (1998:64). Back.
Note 78: The acte clair doctrine originally refers to the context of preliminary proceedings under Article 177 [234] of the ECT. It deals with the question of whether a national court is obliged to refer a question on the interpretation of EC law it has to apply in concrete proceedings to the ECJ, even when the meaning of the respective provision seems clear to the national court. In the judgement of 6 October 1982 in the case 238/81 (CILFIT, ECR 1982, 3415), the ECJ settled this question by saying that a national court can, inter alia, abstain from a reference to the ECJ when the proper application of the provision in question is manifest, so that there cannot be any reasonable doubts about the proper construction (CILFIT, ECR 1982, 3415, par. 21). See also Everling (1998:19-21); Schima (1997:35). In a similar sense, the concept of this doctrine can also apply to the interpretation of EC law by the ECJ itself. This means that in such cases where the wording of a provision the ECJ has to interpret is very clear in the sense of the above-mentioned criteria, the ECJ sometimes abstains from any other considerations, such as the teleological argument of the purpose of the provision. See Thun-Hohenstein and Cede (1996:83). Back.
Note 79: See Stix-Hackl (1998). The Austrian perspective on preliminary proceedings under Article 177 [234] of the ECT is reflected in Reichelt (1998). Back.
Note 80: The three Austrian High Courts comprise the Oberster Gerichtshof (Supreme Court) as the court of last resort in civil and criminal matters, the Verfassungsgerichtshof (Constitutional Court) and the Verwaltungsgerichtshof (Administrative Court). Back.
Note 81: In Austria e.g. the Bundesvergabeamt, an independent authority dealing with infringements of public procurement law was established as part of implementation of Council Directive 89/665/EEC of 21 December 1989 on the co-ordination of the laws, regulations and administrative provisions relating to the application of review procedures to awards of public supply and public works contracts ( OJ 1989 L 395/33). Questions have already been referred to the ECJ by this authority. Back.