61999CC0257_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
Introduction
1. The High Court of Justice of England and Wales, Queen's Bench Division (Divisional Court), has been called upon to rule on the appeals brought by two Czech nationals, Mr Barkoci and Mr Malik, against the refusal by the competent authorities of the United Kingdom of their application to enter the United Kingdom and remain there with a view to pursuing an activity as self-employed persons under the Europe Agreement of 4 October 1993 establishing an association between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part (hereinafter the Agreement).
2. At the time when the national court referred its questions, those two Czech nationals, who had landed in Dover in 1997, seeking asylum, were in the territory of the United Kingdom but under the threat that, should the actions which they had brought before the courts fail, a decision to remove them to the Czech Republic would be implemented.
3. That precarious sojourn in the United Kingdom came after a long journey which the national court sets out and the salient points of which it is useful to mention here, as described by the national court:
- neither of the applicants had sought to obtain in the Czech Republic prior entry clearance before travelling to the United Kingdom with a view to establishing themselves there, under the Agreement, as self-employed workers;
- the two applicants arrived in the United Kingdom after travelling through other Member States in which they could have sought asylum;
- the two applicants, however, made their first application for asylum within the European Union when they arrived at a port (Dover) in the United Kingdom;
- after their respective applications for asylum were refused, neither of the applicants initially sought to obtain permission to enter the United Kingdom on any other ground;
- the applications under the Agreement had been made while Mr Barkoci was released on bail pending his removal from the United Kingdom and Mr Malik was released on bail pending the final decision regarding the action brought against the refusal of his application for asylum;
- after his application under the Agreement was refused, Mr Barkoci was granted temporary admission;
- Mr Malik's application was rejected, although he had been granted temporary admission;
- however, at the time when the two applicants were beginning to exercise their right of establishment, the conditions for bail or their temporary admission did not prevent them from working as self-employed persons;
- the two applicants were dependent, to some extent, on public funding, while they were in the process of establishing themselves.
The Community legal framework
4. The relevant provisions of the Agreement with the Czech Republic for the purpose of determining how the establishment of Czech nationals in the Member States of the Community is regulated are to be found under Title IV entitled Movement of workers, establishment, supply of services.
5. The first chapter of that Title concerns Movement of workers.
6. Even though Mr Barkoci and Mr Malik are not claiming any rights under that title, I believe it is appropriate to quote Article 38 which is worded as follows:
1. Subject to the conditions and modalities applicable in each Member State:
- treatment accorded to workers of Czech Republic nationality, legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals,
- the legally resident spouse and children of a worker legally employed in the territory of a Member State, with the exception of seasonal workers and of workers coming under bilateral Agreements within the meaning of Article 42, unless otherwise provided by such Agreements, shall have access to the labour market of that Member State, during the period of that worker's authorised stay of employment.
2. The Czech Republic shall, subject to the conditions and modalities applicable in that country, accord the treatment referred to in paragraph 1 to workers who are nationals of a Member State and are legally employed in its territory as well as to their spouse and children who are legally resident in the said territory.
7. Chapter II, Establishment, contains, among others, the following provisions:
Article 45
...
3. Each Member State shall grant, from entry into force of this Agreement, a treatment no less favourable than that accorded to its own companies and nationals for the establishment of Czech Republic companies and nationals and shall grant in the operation of Czech Republic companies and nationals established in its territory a treatment no less favourable than that accorded to its own companies and nationals.
4. For the purposes of this Agreement:
(a) establishment shall mean:
(i) as regards nationals, the right to take up and pursue economic activities as self-employed persons and to set up and manage undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market of another Party.
The provisions of this chapter do not apply to those who are not exclusively self-employed.
...
Article 54
1. The provisions of this Chapter shall be applied subject to limitations justified on grounds of public policy, public security or public health.
2. They shall not apply to activities which in the territory of each Party are connected, even occasionally, with the exercise of official authority.
8. Chapter III concerns Supply of services between the Community and the Czech Republic.
9. Finally, Title IV of the Agreement concludes with Chapter IV entitled General provisions, which contains the following article:
Article 59
1. For the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons, and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. ...
...
10. Annexed to the final act are a number of declarations adopted by the plenipotentiaries, as well as exchanges of letters and unilateral declarations of which the plenipotentiaries have ... taken note. All those texts were published in the Official Journal of the European Communities. Among the joint declarations is one on Article 59 which is worded as follows:
The sole fact of requiring a visa for natural persons of certain Parties and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment.
The national legal framework
11. The national legislation on matters of entry and stay applied by the competent authorities of the United Kingdom to Mr Barkoci and Mr Malik are the Immigration Rules, HC 395, as amended in 1996.
12. Paragraphs 24 to 26 of HC 395 establish a general regime of prior entry clearance for certain categories of applicant and provide for mandatory refusal of authorisation to enter the territory of the United Kingdom if such entry clearance has not been obtained.
13. Paragraph 28 provides that an applicant for entry clearance must be outside the United Kingdom at the time of the application, and must apply to the designated post in his country of residence.
14. Paragraphs 211 to 223 of HC 395 concern persons intending to establish themselves in business under the provisions of an EC Association Agreement concluded by the Community. Paragraphs 211 to 216 on applications for leave to enter are set out as follows:
Requirements for leave to enter the United Kingdom as a person intending to establish himself in business under the provisions of an EC Association Agreement
211. For the purpose of paragraphs 212 to 223, a business means an enterprise as:
- a sole trader; or
- a partnership; or
- a company registered in the United Kingdom.
212. The requirements to be met by a person seeking leave to enter the United Kingdom to establish himself in business are that:
(i) he satisfies the requirements of either paragraph 213 or paragraph 214; and
(ii) the money he is putting into the business is under his control and sufficient to establish himself in business in the United Kingdom; and
(iii) until his business provides him with an income he will have sufficient additional funds to maintain and accommodate himself and any dependants without recourse to employment (other than his work for the business) or to public funds; and
(iv) his share of the profits of the business will be sufficient to maintain and accommodate himself and any dependants without recourse to employment (other than his work for the business) or to public funds; and
(v) he does not intend to supplement his business activities by taking or seeking employment in the United Kingdom other than his work for the business; and
(vi) he holds a valid United Kingdom entry clearance for entry in this capacity.
213. Where a person intends to establish himself in a company in the United Kingdom which he effectively controls he will need, in addition to meeting the requirements at paragraph 212, to show:
(i) that he is a national of ... the Czech Republic ...; and
(ii) that he will have a controlling interest in the company; and
(iii) that he will be actively involved in the promotion and management of the company; and
(iv) that the company will be registered in the United Kingdom and be trading or providing services in the United Kingdom; and
(v) that the company will be the owner of the assets of the business; and
(vi) where he is taking over an existing company, a written statement of the terms on which he is to take over the business and the audited accounts for the business for the previous years.
214. Where a person intends to establish himself in self-employment or in partnership in the United Kingdom he will need, in addition to meeting the requirements at 212 above, to show:
(i) that he is a national of ... the Czech Republic; and
(ii) that he will be actively involved in trading or providing services on his own account or in partnership in the United Kingdom; and
(iii) that he, or he together with his partners, will be the owner of the assets of the business; and
(iv) in the case of a partnership, that his part in the business will not amount to disguised employment; and
(v) where he is taking over or joining an existing business a written statement of the terms on which he is to take over or join the business and audited accounts for the business for previous years.
Leave to enter the United Kingdom as a person seeking to establish himself in business under the provisions of an EC Association Agreement
215. A person seeking leave to enter the United Kingdom to establish himself in business may be admitted for a period not exceeding 12 months with a condition restricting his freedom to take employment provided he is able to produce to the Immigration Officer, on arrival, a valid United Kingdom entry clearance for entry in this capacity.
Refusal of leave to enter the United Kingdom as a person seeking to establish himself in business under the provisions of an EC Association Agreement
216. Leave to enter the United Kingdom as a person seeking to establish himself in business is to be refused if a valid United Kingdom entry clearance for entry in this capacity is not produced to the Immigration Officer on arrival.
The questions referred by the national court
15. The national court finds that it is faced with two diametrically opposed submissions. According to Mr Barkoci and Mr Malik, Article 45(3) of the Agreement confers rights on them on which they may rely before the United Kingdom authorities, which allegedly acted unlawfully by requiring of them that they be in possession of leave to enter and by refusing to take a decision acknowledging their right to remain in the United Kingdom as self-employed workers.
16. From their point of view, they cannot be required, in view of the fact that they are within the territory of the United Kingdom, to return abroad in order to apply for prior entry clearance.
17. According to the submission put forward by the United Kingdom, it is perfectly reasonable for the competent authorities to require an entry clearance enabling them to ascertain that the business which Mr Barkoci and Mr Malik wish to undertake meets the conditions laid down by the Immigration Rules.
18. Neither the fact that the persons concerned intend to avail themselves of the Agreement nor the fact that they are in the United Kingdom under the temporary admission system can lift the requirement for leave to enter.
19. It was rightly considered that the applicants, having failed to show that their application clearly and manifestly satisfied the substantive requirements for the granting of leave to enter with a view to establishing themselves as self-employed workers, could not be exonerated, by way of derogation from the immigration rules, from the entry clearance requirement.
20. In order to decide between those two submissions, the national court has referred to the Court a total of seven very long and detailed questions, as will be seen below, which interlock with each other, some of them only being raised depending on the reply to the preceding question and which may easily be grouped into two sets, as moreover the national court has done, the first set relating to the direct effect and the interpretation of the Agreement, and the second to the need to obtain prior leave before travelling.
A - Direct effect and interpretation of the Agreement
Under that heading, the national court raises three questions:
1. Does Article 45 of the Agreement have direct effect within the national legal systems of Member States, notwithstanding the provisions of Article 59 of the Agreement?
2. If the answer to Question 1 is "yes", how is the proviso in the penultimate sentence of Article 59(1) of the Agreement (and in particular the words "benefits accruing to any Party under the terms of a specific provision of this Agreement") to be interpreted; and, more generally, to what extent may a Member State apply its laws and regulations regarding entry, stay and establishment of natural persons to persons invoking Article 45 of the Agreement, without violating this proviso?
3. If the answer to Question 1 is "no", is a natural person who is a national of the Czech Republic none the less entitled, in domestic legal proceedings brought for the purposes of challenging a decision of the relevant national authorities to refuse him admission to establish himself in business pursuant to the Agreement, to invoke Article 45 of the Agreement in order to challenge the lawfulness of a Member State's laws and regulations regarding entry, stay and establishment of natural persons, and if so on what legal basis?
The first question
21. The first of those questions calls for immediate clarification on one point. In my view, the national court is not asking whether a Czech national who has leave to remain in the United Kingdom may rely on Article 45(3) before a United Kingdom court when objecting, as a self-employed worker, to being treated less favourably than United Kingdom nationals.
22. If that had been the question, the answer would have been simple because, as a non-discrimination clause, Article 45(3) is a clear and precise provision which is not subject to the adoption of provisions designed to implement it. Its aim and function is therefore, according to the case-law of the Court, to give rise to rights for individuals which may be relied on before the competent courts.
23. However it is very clear, given the context of the case before it, that what the national court wishes to know is whether a Czech national may claim the right under Article 45(3) to enter the United Kingdom and remain there, in order to carry on business as a self-employed worker, without having obtained to that end the entry clearance and the leave to remain provided for by HC 395.
24. That is indeed why it refers to Article 59 of the Agreement, which makes the proviso that only national rules concerning entry and stay are to be applied.
25. In setting out their case with regard to the answers called for by the first three questions, Mr Barkoci and Mr Malik first of all state that Article 45(3) is not substantially different to the wording of Article 52 of the EC Treaty (now, after amendment, Article 43 EC), so that the freedom of establishment accorded to Czech nationals cannot be conceived in restrictive terms and depart substantially from the same freedom accorded to nationals of the Member States.
26. They do not deny that the content of the concept of establishment is more specifically defined in Article 45(4) of the Agreement than in the EC Treaty, in particular in the sense that Czech nationals benefitting from freedom of establishment may not seek to work as an employee, but they contend that this cannot result in giving Article 45(3) an interpretation which is wholly independent from that which has been accorded to Article 52 of the Treaty.
27. This leads them to state that, like Article 52 of the Treaty, Article 45(3) of the Agreement must be understood as having been intended to confer directly on Czech nationals a right to enter and stay for the purpose of carrying on business as self-employed persons.
28. Still basing themselves on the assertion that Article 45(3) should be interpreted along the same lines as Article 52, they contend that recognition of the right attaching to freedom of establishment cannot be made subject to a requirement of minimum income from the business pursued or to the absence of recourse to public funds in order to supplement such income.
29. The argument based on the actual wording of Article 45(3) is supplemented, according to Mr Barkoci and Mr Malik, by arguments that can be derived from the nature and purpose of the Agreement, which is intended to create conditions propitious to the rapid accession of the Czech Republic to the Community.
30. The applicants in the main proceedings then state that Article 59(1) of the Agreement cannot be interpreted as putting in question their analysis of Article 45(3). In their submission, to permit a Member State to rely on Article 59(1) in order to deprive a Czech national from being able to exercise his right of freedom of establishment, by refusing him admission into its territory and the right to remain therein, would render the entire chapter on establishment devoid of meaning. It would also run counter to what has been agreed within the World Trade Organisation (WTO), since what is concerned is a clause in an agreement which, like Article 59, prohibits the benefits accruing to any Party under the terms of a specific provision thereof from being nullified or impaired, the fact that reference is made to the rights of the parties to the Agreement, and not to those of its nationals, being, in the applicants' submission, entirely irrelevant.
31. Mr Barkoci and Mr Malik submit, finally, with regard to the third question, but in the alternative, since, in view of the reply which they contend is called for by the first two questions, there is no need to reply to it, that, in any event, national courts are required to rule on the legality of national rules on immigration in the light of the obligations which Article 45(3) imposes on the Member States and of the correlative rights conferred on Czech nationals by that article.
32. The United Kingdom Government, for its part, contends that Article 45(3) of the Agreement is not directly effective within the legal systems of the Member States.
33. Its analysis is based on a comparison between the objectives of the Agreement and those of the EC Treaty, on the case-law of the Court of Justice, according to which the similarity between the wording of an article of the EC Treaty and that of an article of an agreement concluded by the Community does not in any way demand an identical interpretation, and on the presence in the Agreement of Article 59.
34. Since Article 45(3) is not endowed with direct effect, it cannot serve as a legal basis for the challenge made by Mr Barkoci and Mr Malik to the lawfulness of the United Kingdom rules on immigration before the national courts.
35. So far as concerns the condition laid down in the second part of the first sentence of Article 59, the United Kingdom Government is not sure, in view of its wording, that it could be relied upon by an individual. It submits that in any event it can impose on Member States only obligations relating to the manner in which they apply their immigration legislation; it cannot call in question the existence of such legislation.
36. The United Kingdom Government points out that it had specifically amended its legislation in order to take account of the provisions of the Agreement with the Czech Republic and other similar agreements.
37. Of the other Governments which have submitted observations, none supports the argument put forward by the applicants in the main proceedings. Although their analysis does not exactly espouse that of the United Kingdom, they all come to the conclusion that Mr Barkoci and Mr Malik cannot base themselves on Article 45(3) in order to avoid the application by the United Kingdom of its rules on entry and stay.
38. What are the answers called for by the first group of questions referred by the national court?
39. It is true, on the one hand, that Article 45(3) of the Agreement, taken in isolation, may, at first sight, give the impression that it confers on Czech nationals a right of establishment and, on the other, that where it has had to interpret Article 52 of the Treaty, the Court of Justice has ruled that the right of establishment implies a right to enter and stay. That observation cannot however constitute anything more than a starting point for the reasoning.
40. A provision must not, in fact, be taken in isolation; it must necessarily be placed in its context, that is to say, the object and purpose pursued by the text in which it is inserted and the other provisions of that text with which it is logically linked must all be examined together.
41. Moreover, the fact that Article 52 of the Treaty has received a certain interpretation does not mean anything in itself as regards the meaning to be read into Article 45(3) of the Agreement, a provision which is moreover worded differently and appears in a different instrument.
42. Thus, the principles laid down in the Royer judgment, cited above, passages of which have been referred to by the applicants in the main proceedings, cannot be applied in the present case.
43. In that case, the Court started from the observation that Article 48 of the EC Treaty (now, after amendment, Article 39 EC) provides that freedom of movement for workers is to be secured within the Community, and that entails the right, according to paragraph (3) of that article, to enter the territory of Member States, to move freely there, to stay there for the purpose of employment and to remain there after the end of this employment. The Court then went on to find that the articles on freedom of establishment and the freedom to provide services were based on the same principles in so far as they concern entry into and residence of nationals of the other Member States in their territory, and that they were to be construed as prohibiting Member States from setting up restrictions or obstacles in that regard.
44. However, it is common ground that the agreement in question here does not at all have the same characteristics, starting with the fact - undisputed in these proceedings - that it specifically refrained from establishing a right of free movement for workers (see Articles 38 and 59, cited above).
45. In the Royer case, the Court, moreover, pointed out that its interpretation of the provisions of the Treaty on freedom of movement for persons was recognised by all the measures of secondary law adopted for the purpose of implementing the abovementioned provisions of the Treaty, and it mentions, to that end, among others, Council Directive No 73/148/EEC of 21 May 1973 concerning the removal of restrictions on the movement and residence of nationals of the Member States within the Community for establishment and provision of services.
46. That directive contains the following essential provisions:
Article 1
1. The Member States shall, acting as provided in this Directive, abolish restrictions on the movement and residence of:
(a) nationals of a Member State who are established or who wish to establish themselves in another Member State in order to pursue activities as self-employed persons, or who wish to provide services in that State;
...
Article 3
1. Member States shall grant to the persons referred to in Article 1 right to enter their territory merely on production of a valid identity card or passport.
2. No entry visa or equivalent requirement may be demanded save in respect of members of the family who do not have the nationality of a Member State. Member States shall afford to such persons every facility for obtaining any necessary visas.
47. Given that such a directive was deemed necessary in order to specify the modalities of the rights of nationals of the Member States, a conclusion is called for at this point: if the contracting parties to the Agreement had wished Czech nationals to enjoy the same regime as Community nationals, they would have taken steps to do so, for example by declaring that that directive was applicable to them, or by annexing an identical text to the Agreement.
48. Moreover, the contrast between Article 1 of the directive and Article 59 of the Agreement is obvious. Whereas, in the former provision, the Council claims to wish to abolish restrictions on the movement and residence of Community nationals, the contracting parties state, in Article 59, that [f]or the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons, and supply of services ....
49. It is therefore not possible to conclude that Czech nationals have, in the Member States, a right of entry and residence identical with that of Community nationals once they manifest the intention of carrying on business there as self-employed persons and are in possession of a valid passport.
50. That interpretation is wholly confirmed by the coexistence, within the Agreement, of Article 45(3) and Article 59(1). The coexistence of those two provisions makes it impossible to take the view that by means of Article 45(3) the contracting parties had intended to lay down for the benefit of Czech nationals a rule prohibiting discrimination and at the same time to regulate their right of entry and residence. It is clear that they intended to separate those two matters.
51. At the hearing, the applicants in the main proceedings further argued that the judgment in Rush Portuguesa shows that, in the context of a single agreement, the nationals of one of the contracting parties may indeed enjoy the right of freedom to provide services in all its fullness, while, at the same time, restrictions are kept in place so far as concerns freedom of movement for workers, and that the same must therefore be true of freedom of establishment for Czech nationals. They fail, however, to take account of the fact that that judgment concerned the interpretation of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties and not of an agreement concluded by the European Communities with a non-member State. By that Act, the Portuguese Republic became a full member of the Community, subject to a temporary derogation from the principle of freedom of movement for workers.
52. However, as rightly pointed out by the Governments which submitted observations and also by the Commission, the object and purpose pursued by the Agreement, as expressed in the preamble thereto and in Article 1, in no way justify the conclusion that the contracting parties intended to create a common market in which goods, persons, services and capital move freely, such as that intended by the authors of the Treaty.
53. Confirmation that the Agreement does not seek simply to transpose, in the context of the Agreement, the regime in the matter of establishment laid down in the Treaty is also to be found from a reading of Article 59(2) of the Agreement.
54. According to that provision, [t]he provisions of Chapters II, III and IV of Title IV shall be adjusted by decision of the Association Council in the light of the result of the negotiations on services taking place in the Uruguay Round and in particular to ensure that under any provision of this Agreement a Party grants to the other Party a treatment no less favourable than that accorded under the provisions of a future General Agreement on Trade and Services (GATS).
55. If the parties contemplated that the agreements being negotiated in the context of the General Agreement on Tariffs and Trade (GATT) might possibly go beyond what is provided in the Agreement so far as concerns freedom of establishment, it was because they were perfectly aware that the Agreement gave that freedom only a limited scope, with no relation to the scope it has in the context of the Treaty.
56. The impossibility of transposing the case-law of the Court of Justice with regard to Article 52 of the Treaty, at least so far as concerns matters of the right of entry and residence, to the context of the Agreement is equally evident when one examines the limited scope which Article 45(4) of the Agreement gives to the concept of establishment. It states that the chapter on establishment does not apply to persons who are not exclusively self-employed and that self-employment and business undertakings by nationals does not extend to seeking or taking employment in the labour market of another party.
57. That means that it is not enough that a Czech national should undertake self-employment in a Member State in order to be able to claim the benefit of Article 45(3) of the Agreement. He must be able to prove that he is not excluded by the effect of Article 45(4), which means that he must accept a certain form of monitoring by the national authorities of the Member State in which he intends to establish himself. The very existence of such monitoring is not reconcilable with the recognition of a right of entry and residence directly conferred on him by the Agreement.
58. Mr Barkoci and Mr Malik also rely on the judgment in Kaefer and Procacci, in which, called upon to interpret Article 176 of Council Decision 86/283/EEC of 30 June 1986 on the association of the overseas countries and territories with the European Economic Community, the Court stated that the right of entry and residence is a prerequisite for the right of establishment granted under certain conditions to a national of a Member State who intends to carry on an activity as a self-employed person or provide services in overseas countries or territories of another Member State.
59. It need merely be observed in that connection that, apart from the fact that what was concerned was a right conferred on Community nationals in order to open the way to an activity in a part of the territory under the sovereignty of another Member State, and not on nationals of non-member States, the abovementioned Council decision, like the Treaty itself, does not contain any provision comparable with Article 59(1) of the Agreement, so that there is nothing of relevance to be gleaned from that judgment for the purpose of replying to the questions referred to the Court by the national court.
60. The applicants in the main proceedings attempt to find support for their case in the fact that, in the context of the EEC-Turkey Association Agreement, the Court has developed a line of case-law to the effect that conferment, by a decision of the Association Council, of a right on Turkish workers to take up an employment of their choice in a Member State necessarily entails acknowledgement of a right of residence, provided that certain conditions, which it specifies, are met.
61. However, that line of authority does not help their case at all. It concerns, as the Court has again recently pointed out in Savas, only Turkish workers who are already members of the legal labour force in a Member State, and does not in any way concern Turkish nationals who intend to accede for the first time to the labour market in a Member State and establish themselves there. In the case of such nationals, the Member State retains full freedom so far as concerns the granting of a right of entry and residence. In that respect, the Court, at paragraph 65 of the Savas judgment, expressed itself as follows:
... a Turkish national's first admission to the territory of a Member State is governed exclusively by that State's own domestic law, and the person concerned may claim certain rights under Community law in relation to holding employment or exercising self-employed activity, and, correlatively, in relation to residence, only in so far as his position in the Member State concerned is regular.
62. So far as concerns the argument which the applicants in the main proceedings claim to derive from WTO practice, it need merely be observed that, since it has been established that Article 45(3) of the Agreement does not regulate the matter of right of entry and residence, the argument fails because a refusal in that respect with regard to a Czech national cannot constitute an infringement of that provision, and this renders otiose any discussion on whether or not a conferred advantage has been withdrawn.
63. Finally, with regard to the rules on the interpretation of Treaties worked out by customary international law and set out in synthesis in the Vienna Convention on the Law of Treaties, it is sufficient to note that, since those rules require that the common intention of the parties be taken into account, it is difficult to see how, since the parties to the Agreement have acknowledged that the visa requirement could not be regarded as nullifying or impairing benefits accruing to any party under the terms of a specific provision of the Agreement, it could be claimed that those same parties had, by means of the wording employed in Article 45(3) of the Agreement, conferred on Czech nationals wishing to exercise their freedom of establishment a right of entry and residence capable of being relied on as against the national authorities of the Member State in which they have chosen to establish themselves.
64. Since, accordingly, I find that both the wording of Articles 45(3) and 59(1) of the Agreement and the context in which they are set, and also the principles to which the Court refers when interpreting provisions of Community law, lead to the same result, I find it inconceivable that the applicants in the main proceedings derive from Article 45(3) any right to enter and reside in a Member State.
65. Having arrived at those conclusions, I do not, in principle, need to answer the second question, since it is only referred to the Court in the event that the first question is answered in the affirmative, and I could move directly to the third question.
66. It seems to me, however, that the second and third questions concern the same problem - namely what are the inferences to be drawn from the proviso in the first sentence in fine of Article 59(1) of the Agreement, according to which the application by the parties of their laws and regulations regarding entry, stay and establishment of natural persons must not nullify or impair the benefits accruing to any party under the terms of a specific provision of the Agreement. Does that part of the provision open the door to judicial review of decisions of national authorities in this area?
The second and third questions
67. I would observe at the outset that, by referring to the parties to the Agreement and not to their nationals, Article 59(1) of the Agreement may give the impression, as the German and United Kingdom Governments have remarked, that only a party to the Agreement may criticise the manner in which another party has acted when approached for the grant of a right of entry and residence.
68. However I would at once point out that merely because a provision of Community law does not confer directly a right on individuals that a national court seised of an action directed against a national measure adopted in implementation of that measure is dispensed from taking that measure into account.
69. On the contrary, it is for that court to interpret and apply the national measure, in so far as possible, in conformity with the Community provision. That is moreover what the two Governments mentioned above implicitly acknowledge in stating that Article 59 of the Agreement must be interpreted as meaning that a Member State is free to apply its legislation governing entry, stay and establishment of natural persons to persons invoking Article 45(3), on condition that it does not do so in a manner which makes it impossible or very difficult for a Czech national effectively to exercise his right to freedom of establishment. Accordingly, when challenging before a national tribunal, as Mr Barkoci and Mr Malik are doing, a refusal of admission and residence, a Czech national claiming to exercise the freedom of establishment provided for in Article 45(3) may submit to that tribunal arguments alleging that the measure taken in his regard is incompatible with the proviso in the first sentence in fine of Article 59(1) of the Agreement.
70. There could be such incompatibility, as the two Governments acknowledge, if the admission or residence envisaged for the purpose of establishment were refused on the ground that the person concerned is a Czech national or is resident in the Czech Republic, or because under the national system a general restriction on immigration is imposed or where the right to engage in an economic activity in a self-employed capacity is conditional on a finding that there is a need justified in the light of economic considerations or labour-market requirements, as provided in Point A(5) of Council Resolution of 30 November 1994 relating to the limitations on the admission of third-country nationals to the territory of the Member States for the purpose of pursuing activities as self-employed persons, to which the German Government refers in its observations, but whose application to Czech nationals is precluded under Point B.
71. The possibility of applying in a totally discretionary manner national rules on immigration to a Czech national wishing to establish himself in order to carry on an activity as a self-employed person is likewise precluded by the French and Netherlands Governments.
72. It was, moreover, in order not to attract criticism in that respect that the United Kingdom Government, as it states in its observations, inserted into HC 395 provisions covering specifically nationals of third countries which had concluded association agreements of the type concluded with the Czech Republic, nationals on whom, by the United Kingdom's own admission, certain requirements which are enforceable in respect of nationals of other third countries may not be imposed.
73. The question whether a national court which finds that the application of national immigration rules to a Czech national wishing to establish himself leads to a result incompatible with the Agreement must declare those rules unlawful, or merely disapply them for the benefit of the applicant, is not a matter for the Court to decide.
74. I therefore propose that the Court should answer the first three questions as follows:
- Article 45(3) of the Agreement has direct effect in so far as it prohibits Czech nationals who have lawfully entered a Member State in order to pursue activities as self-employed persons there from being accorded by that Member State a treatment less favourable than that accorded by it to its own nationals.
Czech nationals cannot, however, derive any right of entry and residence from that provision.
- Czech nationals cannot rely on Article 45(3) and the first sentence in fine of Article 59(1) of the Agreement in order to challenge the lawfulness of a Member State's laws and regulations regarding entry, stay and establishment of natural persons, unless those laws and regulations are worded or applied in a manner which would make it generally impossible or very difficult for Czech nationals to establish themselves in the Member State concerned, to the point of rendering Article 45(3) of that Agreement ineffective.
B - The need to obtain prior entry clearance before travelling
75. In view of the fact that I have acknowledged that the third question could, in certain extreme cases, be answered in the affirmative, I must now examine the second set of questions, which consists of the fourth to the seventh questions. These are formulated as follows:
4. If the answer to Question 1 or Question 3 is "yes", do Articles 45 and/or 59 of the Agreement permit a Member State to require a person who wishes to travel to a Member State purely to establish himself as a self-employed person under the Agreement to apply for and obtain prior "entry clearance" (that is, prior permission to travel to that State for that specific purpose)?
5. If the answer to Question 4 is "yes":
(a) is a Member State entitled to make the grant of such prior entry clearance conditional upon satisfying substantive requirements relating to establishment such as those contained in paragraph 212 of HC 395; and
(b) may a Member State refuse admission into its territory to a person seeking to establish himself as a self-employed person under the Agreement on the sole ground that such prior entry clearance has not been obtained?
6. Where such a person has not been granted permission to enter the territory of the Member State on any other basis, is the answer to Question 5 affected (and if so how) by any of the following factors:
(a) the fact that, on initial arrival at the border of the Member State, the person did not seek admission pursuant to the Agreement but on some other basis, which was subsequently rejected;
(b) the length of time which has elapsed between the applicant's initial arrival at the border of the Member State and the date of his subsequent application for establishment as a self-employed person pursuant to the Agreement;
(c) the extent of any restrictions placed on the applicant by the national authorities during that time, pursuant to powers contained in national immigration law, as to his liberty or employment/occupation;
(d) the fact that the applicant has had access to the social welfare system of the Member State and has depended upon it financially whilst establishing himself as a self-employed person?
7. If a Member State is not entitled to refuse entry to a person seeking to establish himself under the Agreement on the sole basis that prior entry clearance has not been obtained, is it legitimate for the competent authorities to grant such a person leave to enter only if his application clearly and manifestly satisfies the same substantive criteria as would have been applied had he sought prior entry clearance?
The fourth question
76. The reply to the fourth question is easy to give, inasmuch as it is framed in general terms, unlike the fifth question, which refers expressly to the conditions laid down by law in the United Kingdom for granting leave to enter as provided for.
77. Once it is accepted that Articles 45(3) and 59(1) of the Agreement must be read together and that Czech nationals cannot claim a right of access and residence based on Article 45, it follows logically that a Member State is entitled to require of applicants that they seek and obtain prior entry clearance before travelling to that Member State with a view to establishing themselves there as self-employed persons, whatever form that permission may take.
Question 5(a)
78. By that question, the Court is asked to consider whether the substantive conditions which United Kingdom legislation lays down for the grant of the prior entry clearance which it requires are permissible having regard to Articles 45(3) and 59(1) of the Agreement.
79. Those conditions, set down in paragraphs 212 and 216 of HC 395, reproduced above, seem to me to be reasonable, in so far as they merely give concrete expression to the requirements which flow from the definition of establishment as set out in Article 45(4) of the Agreement.
80. It is for the Czech applicant to provide to the United Kingdom immigration authorities information to enable them to assess whether the planned business does indeed fall within the parameters set by Article 45(4) of the Agreement.
81. It is true that Mr Barkoci and Mr Malik claim that the requirement that they should be able to maintain and accommodate themselves and any dependants goes beyond what is provided in the Agreement and is radically different to what is provided for in the Treaty, as interpreted by the Court, in respect of Community nationals intending to make use of the freedom of establishment.
82. On that latter aspect, I need merely refer to what I have said with regard to the first question.
83. So far as concerns the first aspect, I must admit that receipt of sufficient income in order not to have to depend on public funds is not prescribed as such by the Agreement.
84. However, I do not think that it is contrary to the rules laid down by the Agreement for, if Member States may refuse to extend freedom of establishment to a Czech national who intends to combine self-employment with paid employment, that is to say to require that self-employment does not serve to circumvent the absence of a right of freedom of movement for Czech workers, I cannot see how they can be prohibited from precluding establishment in the form of a business producing such little income that recourse to social assistance is necessary for the survival of the applicant and his family.
85. Common sense dictates that the Czech national's activity must not only be in the nature of self-employment, in the sense that it is not a disguise for paid employment, but must also ensure for that person genuine material independence.
86. The point raised by the applicants in the main proceedings in objection to this, namely that the United Kingdom authorities cannot deny to British nationals the right to pursue a self-employed activity on the ground that it is not sufficiently lucrative is futile, since, in the case of such nationals, the pursuit of such an activity is not, so far as I know, circumscribed by provisions similar or comparable to those of Article 45(4) of the Agreement.
Question 5(b)
87. Still in the context of the fifth question, I must now consider whether the fact that a Czech national is not in possession, on arrival at the border, of the entry clearance required by the immigration rules in force in the United Kingdom may justify refusing access.
88. In my view, the reply is self-evident. How could it be possible to consider that a Member State has, in light of the provisions of the Agreement, the right to require an entry clearance and, at the same time, to prohibit it from penalising failure to comply with that rule?
89. Strangely enough, however, the Commission, in its observations, submits that the lack of such clearance cannot justify refusing admission.
90. In its submission, such a sanction, which would result in the Czech national, on arriving at the border, having no other option but to retrace his steps in order to lodge a proper application in his own country, is manifestly excessive, since what is concerned is that a mere formality that has not been completed, and cannot claim to be compatible with Articles 45(3) and 59(1) of the Agreement.
91. It seems to me that, in arguing in this way, the Commission is confusing the regime applicable in the case of the Treaty with that established by the Agreement. It transposes, wrongly, in my view, to the context of the Agreement the case-law of the Court according to which Community nationals travelling to another Member State in order to seek employment there, provide services or establish themselves there are merely exercising a right which they hold directly under the Treaty, so that the fact that they have not gone through all the administrative formalities which Community law still permits cannot attract penalties the severity of which is tantamount to a denial of the right which they are exercising.
92. In the context of the Agreement, the issuing of an entry clearance is not a mere formality. On the contrary, it confers on the Czech national a right of entry which he did not previously possess. It is an entitling, not a merely declaratory, act, with the consequence, of course, that non-possession of such clearance entails refusal of admission into the territory of the Member State in question, a refusal which does not constitute the denial of any right, since the creation of the right is specifically dependent upon entry clearance being issued.
93. In that context, it may moreover be observed that the provisions of the Treaty and of secondary law concerning visas establish, very clearly, that non-possession of a visa entails, by definition, the absence of a right to cross the border.
94. Thus Article 110c of the EC Treaty entrusts the Council with the task of determin[ing] the third countries whose nationals must be in possession of a visa when crossing the external borders of the Member States.
95. Article 5 of Council Regulation (EC) No 574/1999 of 12 March 1999, adopted on the basis of Article 100c of the Treaty, provides:
For the purposes of this Regulation, "visa" shall mean an authorisation given or a decision taken by a Member State which is required for entry into its territory ....
96. That provision also shows that, in the eyes of the Community legislature, visa is to be understood in the broad sense. It may therefore be considered that an authorisation such as the United Kingdom entry clearance falls within the category of visas.
97. Regulation No 574/1999 is not, admittedly, applicable to the present case because the Czech Republic is not included in the list appended thereto and it only refers to short-term visas. However, according to Article 2 of that regulation, Member States shall determine the visa requirements for nationals of third countries not on the common list. The United Kingdom would therefore be perfectly entitled to require an entry clearance even for short-term visits. It is all the more entitled to do so where the border is crossed with a view to establishment of indeterminate duration.
98. Finally, Community law provides that, for those countries in respect of which a visa is required even for mere airport transit, such a visa is to be issued by the consular services of the Member States which must ascertain that there is no security risk or risk of illegal immigration.
99. Since a visa giving access to an airport cannot, by definition, be issued at the airport itself, one cannot draw a general inference from that text. However, in my opinion, there is no provision of Community law which prevents a Member State from requiring that visas or entry clearances should, in all cases, be issued by its consular services in the applicant's country of origin, and to turn back at the border anyone not already in possession of one.
100. That would not constitute a breach of the principle of proportionality. First, the capacity for temporary accommodation in the vicinity of the ports and airports of the Member States is not unlimited.
101. Secondly, applications for establishment require detailed examination which can take a certain amount of time. The authorities must be in a position to check whether the person in question has acquired the financial resources he claims to have as a result of drug-trafficking or other criminal activities, or whether he finds himself in one of the circumstances in which even a Community national could be refused establishment in another Member State (for example drug addiction or affliction by certain diseases).
102. It is therefore not open to argue that, so far as concerns nationals of a State linked to the Community by an agreement of the type at issue here, the grant of a visa of the entry clearance type is a mere formality, and that, once a Czech national shows that he has the intellectual and financial ability to establish himself as a self-employed person, entry into the national territory can no longer be refused. Quite the contrary, possession of an entry clearance constitutes in fact a distinct and additional condition, and failure to be in possession of one on disembarking constitutes a ground for the national authorities to send the applicant back to his country of origin.
103. I consider therefore that the two parts of the fifth question must both be answered in the affirmative.
The sixth question
104. In view of the reasons for which I consider that the United Kingdom is entitled to refuse admission to anyone not in possession of a entry clearance, I find no difficulty in answering the sixth question.
105. The various factors rehearsed by the national court in its sixth question are in no way capable of affecting the answer to the fifth question. First, there is nothing to oblige the United Kingdom to provide that, in certain cases, lack of an entry clearance will not result in automatic refusal of admission, since the national who does not have one in his possession cannot claim any right of entry or residence.
106. Secondly, the case-law of the Court on the right of residence of Turkish nationals in the Member States is wholly unequivocal. A person who has pursued an activity in the territory of a Member State while his situation is not in conformity with the rules of that Member State on the right of entry and residence cannot claim to derive any right by virtue of that activity.
107. Similarly, a person who has been able to maintain himself in the territory of a Member State with that State's authorisation, but whose situation is altogether precarious, in particular pending a decision by the courts regarding the lawfulness of a refusal to grant a right of residence or of a deportation order, cannot claim any right whatsoever under Community law on the basis of a presence which is merely tolerated.
108. The fact that a Member State does not in fact put up barriers, for reasons which might be termed humanitarian, to the presence in its territory of a foreigner in respect of whom it has never recognised a right of residence, nor was obliged so to do, cannot rebound against it; otherwise, a veritable bonus for illegal immigration would be established.
109. Similarly, a person who, while temporarily admitted, has been able to pursue a self-employed activity, perhaps because the competent authorities have, in the exercise of a discretion which no one could dispute that they possess, deemed it more judicious to allow the person concerned to earn his living rather than to have him become a burden on the social welfare system, cannot claim that he has established himself under the Agreement and claim the benefit of the non-discrimination rule laid down by Article 45(3).
The seventh question
110. The seventh question does not in principle call for an answer, in view of the answer given to the fifth question, but it does none the less provide me with an opportunity to make a number of observations.
111. If a Member State, in the exercise of a discretion which belongs to it in its own right, vouchsafes, as the United Kingdom Government does, a fact confirmed during the hearing, to contemplate the possibility of granting a right of entry and residence to a Czech national who intends to avail himself of the non-discrimination rule laid down in the Agreement, despite the fact that he has not fulfilled the obligation laid down in the immigration legislation to apply for entry clearance prior to arrival at the border, and although there is nothing that would prevent the competent authorities from deciding to turn him back, it is perfectly entitled to make any decision to admit him conditional upon the clear and manifest fulfilment of the substantive requirements for the grant of a right of access and residence for the purposes of establishment.
112. A Czech national who arrives at the border of the United Kingdom without an entry clearance may properly, under the United Kingdom rules, be turned back and has no right to have his situation with regard to establishment examined in exactly the same way as it would have been if he had complied with the prescribed procedure.
113. Examination of such an application is in itself a privilege, not to say a consent to queue-jumping, granted by the United Kingdom authorities to the person concerned and it would be quite improper to discuss the conditions and procedures for granting it.
114. The second series of questions from the national court accordingly call for the following answers:
- Articles 45 and 59 of the Agreement authorise a Member State to require of a person who wishes to enter its territory with the exclusive aim of establishing himself as a self-employed person under the Agreement that he apply for and obtain prior entry clearance (that is to say prior permission to travel to that State for that specific purpose).
- A Member State is entitled, in any event, to refuse admission to its territory to a person wishing to establish himself as a self-employed worker under the Agreement on the sole ground that such prior entry clearance has not been obtained.
- A Member State is entitled to require, for the purposes of granting prior entry clearance, that substantive requirements relating to establishment such as those described by the national court be satisfied.
Conclusion
115. Having reached the conclusion of my Opinion, I would propose that the Court of Justice answer the questions referred by the High Court of Justice of England and Wales, Queen's Bench Division, (Divisional Court) as follows:
- Article 45(3) of the Europe Agreement of 4 October 1993 establishing an association between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, is of direct effect in so far as it prohibits Czech nationals who have lawfully entered a Member State in order to pursue activities as self-employed persons there from being accorded by that Member State a treatment less favourable than that accorded by it to its own nationals.
Czech nationals cannot, however, derive any right of entry and residence from that provision.
- Czech nationals cannot rely on Article 45(3) and the first sentence in fine of Article 59(1) of the Agreement in order to challenge the lawfulness of a Member State's laws and regulations regarding entry, stay and establishment of natural persons, unless those laws and regulations are worded or applied in a manner which would make it generally impossible or very difficult for Czech nationals to establish themselves in the Member State concerned, to the point of rendering Article 45(3) of that Agreement ineffective.
- Articles 45 and 59 of the Agreement authorise a Member State to require of a person who wishes to enter its territory with the exclusive aim of establishing himself as a self-employed person under that Agreement that he apply for and obtain prior entry clearance (that is to say prior permission to travel to that State for that specific purpose).
- A Member State is entitled, in any event, to refuse admission to its territory to a person wishing to establish himself as a self-employed worker under the Agreement on the sole ground that such prior entry clearance has not been obtained.
- A Member State is entitled to require, for the purposes of granting prior entry clearance, that substantive requirements relating to establishment such as those described by the national court be satisfied.