WRITTEN QUESTION E-1794/02 by Erik Meijer (GUE/NGL) to the Commission. Obstacles placed in the way of protection measures for public authorities in largely privatised companies as a result of a judicial ruling.
Date: 2002-06-24
Institutions: European Parliament, Provisional data
Subjects: civil law, free movement of capital, intervention policy, privatisation, public sector, services of general interest

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Return issues are also discussed within the context of this dialogue, and the third High level consultations
on fighting illegal migration and trafficking in human beings took place on 19 July 2002 in Brussels. On
that occasion, concrete steps for closer cooperation to improve return practices have been envisaged.

In the conclusion No 40 of the Laeken European Council of 15 December 2001, it was called for the
integration of the policy of migratory flows into the Union’s foreign policy. It was decided in particular
that European readmission agreements must be concluded with the countries concerned on the basis of a
new list of priorities and a clear action plan. Building upon these guidelines the Council identified, at its
meeting on 25 April 2002, four new priority countries for further Community readmission agreements,
among them China, and asked the Commission to submit to it draft negotiating directives as soon as
possible. So far the Council formally authorised the Commission to negotiate Community readmission
agreements with Morocco, Sri Lanka, Russia, Pakistan, Hong Kong, Macao and Ukraine. The Commission
has successfully completed negotiations with Hong Kong and Sri Lanka (final texts initialled in November
2001 and May 2002 respectively) and negotiations with Macao are well advanced and expected to be
completed soon. Regarding the other negotiations, however, it is not yet possible to indicate a date for
their completion.

However, it should be noted that the fact that Community readmission agreements are negotiated does not
justify the assumption that the countries concerned have refused to co-operate. The willingness to enter
into negotiations on such agreements is rather the opposite signal and is highly appreciated.

The European Council of Seville of 21 and 22 June 2002 addressed the issue of co-operation with third
countries in fighting illegal migration.
It was concluded that it would be necessary to carry out a
systematic assessment of relations with third countries, which do not co-operate in fighting illegal
migration. At the level of the Community, co-operation with countries of origin and transit on preventing
and fighting illegal migration has started relatively recently. First experiences with countries such as
Albania and other Balkans countries, Morocco, Sri Lanka, and Turkey are rather encouraging. In line with
the conclusions of the European Council of Seville, the Commission will submit to the Council a report on
the financial resources available at Community level for repatriation of migrants and rejected asylum
seekers, for management of external borders and to promote co-operation with third countries in the field
of asylum and migration, including illegal immigration.

Regarding the visa requirement for nationals of the Balkans States, it should be mentioned that, according
to Council Regulation EC No 539/2001 of 15 March 2001, listing third countries whose nationals must be
in possession of visas when crossing the external borders and those whose nationals are exempt from that
requirement (1),
the FRY and the Former Republic of
Macedonia (FYROM) need a visa to enter the Union.

the nationals of Albania, Bosnia-Herzegovina,

(1) OJ L 81, 21.3.2001.

(2003/C 161 E/011)

WRITTEN QUESTION E-1794/02

by Erik Meijer (GUE/NGL) to the Commission

(24 June 2002)

Subject: Obstacles placed in the way of protection measures for public authorities in largely privatised

companies as a result of a judicial ruling

Does the Commission recall that objections to the privatisation of public enterprises were refuted in
1.
the past by the argument, inter alia, that although private capital would be attracted, the public authorities
would still retain a large measure of control
thanks to protection mechanisms such as minority
participation combined with the right of veto, over location, type of production, number of employees,
mergers with, or takeover of, other companies and the role of the company in the context of social and
environmental needs?

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2. What are the consequences of the ruling by the Court of Justice on the ‘golden shares’ of the French
and Portuguese States, which it deems not to be in the public interest and to violate the principle of free
movement of capital within the European Union?

Can the Commission confirm that it considers the similar participation of the Belgian authorities in
3.
Distrigaz and of the Netherlands authorities in the postal company TPG and the telecom provider KPN to
be of major public benefit? In what way do the Netherlands and Belgian protection mechanisms differ
from the French and Portuguese ones?

Now that the ruling referred to in question 2 has been delivered, can the national authorities of the
4.
Member States continue to protect what they consider to be vital interests in the areas of energy provision,
water supplies, postal services, telecommunications and public transport, as well as the environment and
employment, while not holding a majority of shares?

If question 4 is answered in the affirmative, in what way and under what circumstances can this

5.
protection take place?

6.
If question 4 is answered in the negative, does this mean that the protection sought can only be
given if the entire company or, at least, a majority of its shares remains in public ownership or if the
majority of the shares are reacquired?

(Source: De Volkskrant and Metro, Netherlands edition, 5 June 2002)

Answer given by Mr Solbes Mira on behalf of the Commission

(9 August 2002)

1.
Article 295 of the EC Treaty reads as follows: ‘This Treaty shall in no way prejudice the rules in
Member States governing the system of property ownership.’ According to these provisions, Member States
are free with regard to the regime of property since the EC Treaty neither imposes nor introduces in the
Community legal order a new conception or regulation of property. Therefore, Member States have the
right either to nationalise or to privatise. However, according to Court of Justice jurisprudence, the
implementation of a privatisation decision (for instance) has to abide by the principles of Community law,
in particular the freedom of capital movements.

2.
According to Article 228.1. of the EC Treaty, ‘If the Court of Justice finds that a Member State has
failed to fulfil an obligation under this Treaty, the State shall be required to take the necessary measures to
comply with the judgement of the Court of Justice’. In the present case, Portugal and France have now to
amend, respectively, the framework law on privatisations (and related decree-laws) and the decree vesting
in the State a ‘golden share’
they comply with Community
in Elf-Aquitaine in such a way that
requirements in the field of capital movements. In order to verify the satisfactory character of the planned
amendments, the Commission will request from both Member States a description of the measures which
they intend to take for that purpose, as well as a timetable for adoption.

3.
As ruled by the Court of Justice, certain concerns may justify the retention by Member States of a
degree of influence within undertakings that were initially public and subsequently privatised, where those
undertakings are active in fields involving the provision of services in the public interest or strategic
services. However, the free movement of capital, as a fundamental principle of the EC Treaty, may be
restricted only by national rules which are justified by reasons referred to in Article 58 of the EC Treaty
(e.g. public policy or public security) or by overriding requirements of the general interest and which are
applicable to all persons and undertakings pursuing an activity in the territory of the host Member States.
Furthermore, in order to be so justified, the national legislation must be suitable for securing the objective
which it pursues and must not go beyond what is necessary in order to attain it, so as to accord with the
principle of proportionality.

As far as the Belgian protection mechanism is concerned, the Court of Justice has ruled that, first, the
regime in issue is one of opposition (no prior approval is required). Furthermore, the regime is limited to
certain decisions concerning the strategic assets of the companies in question (including in particular the
energy supply networks) and to such specific management decisions relating to those assets as may be
called in question in any given case. Finally, the Minister may intervene pursuant to the Royal Decree
vesting a ‘golden share’ in the State only where there is a threat that the objectives of the energy policy
may be compromised. Therefore, the scheme enables the Member State concerned to intervene with a view

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to ensuring, in a given situation, compliance with the public service obligations incumbent on Distrigaz,
whilst at the same time observing the requirements of legal certainty. As to the participation of the Dutch
authorities in TPG and KPN is concerned, the Commission decided to send a letter of formal notice to the
Dutch authorities, which was responded to. The arguments presented by the Dutch authorities to justify
the special rights attached to the ‘golden shares’ existing in both companies involved are being analysed by
the Commission, in particular in the light of the above Court of Justice ruling of 4 June 2002.

4.
As mentioned in the reply to question 3, Member States may retain a certain degree of influence
within privatised undertakings active in fields involving the provision of services in the public interest or
strategic services. However, restrictions to the free movement of capital have to be justified either by
reasons referred to in Article 58 of the EC Treaty or by overriding requirements of the general interest.
Furthermore, in order to be so justified, the national legislation must be suitable for securing the objective
which it pursues and must not go beyond what is necessary in order to attain it, so as to accord with the
principle of proportionality.

Moreover,
it might be recalled that the existing Community framework governing a number of areas
referred to in the question generally contains provisions aiming at safeguarding the public interest or
establishes policies designed to guarantee it whilst respecting the rules of the internal market.

5.
The means through which and the circumstances under which restrictions to capital movements may
be established in order to protect the general interest in conformity with Community requirements have
been presented in the replies to questions 3 and 4.

6.

The question has been answered in the affirmative.

(2003/C 161 E/012)

WRITTEN QUESTION E-2050/02

by Olivier Dupuis (NI) to the Commission

(10 July 2002)

Subject: Tibetans arrested in Nepal

According to the Nepalese Immigration Department, twelve Tibetans (including Choeyang Dorje, 30 years
of age, Palden Gyatso, 32, Tenzin Yangzom and her four-month-old baby, and the monks Sonam Lama
and Sechya Lama) are being held in Dili Bazaar prison, and a thirteenth Tibetan (the monk Heruka) in the
Khar prison in Kathmandu, where he is apparently serving a ten-year sentence for being in Nepal illegally.

It would appear that these arrests are due to the fact that the unwritten arrangement between the Nepalese
Government and the Office of the United Nations High Commissioner for Refugees guarantees safe transit
through Nepal to India for Tibetans leaving China, but does not apply to Tibetans travelling in the
opposite direction, i.e. wishing to return to Tibet. The ban affects some 3 000 Tibetans who wish to travel
back to Tibet, having completed their studies in India.

The 13 detainees face fines ranging from USD 1 584 to USD 2 666. They could avoid prison if they paid
the fines. However, the amounts of these fines, which are far in excess of the money normally available to
the detainees, quite clearly reflect a hardening of the attitude of the Nepalese authorities.

Is the Commission aware of these arrests and of the Nepalese authorities’ decision to deal in this way with
the situation of Tibetan exiles travelling through Nepal on their way back to Chinese-occupied Tibet?

If so, what steps has the Commission taken to help the 13 Tibetans out of prison and, more generally, to
ensure that no further action is taken to prevent Tibetans from travelling through Nepal?