European Commission v Hungary.
Date: 2020-10-06
45


As regards, in the first place, the arguments relating to the allegedly excessively short time limits for reply which the Commission imposed on Hungary, it must be borne in mind that the purpose of the pre-litigation procedure is to give the Member State concerned an opportunity to comply with its obligations under EU law or to avail itself of its right to defend itself against the complaints made by the Commission (judgment of 26 October 2006, Commission v Italy, C‑371/04, EU:C:2006:668, paragraph 9). The proper conduct of that procedure constitutes an essential guarantee required by the FEU Treaty, not only in order to protect the rights of the Member State concerned, but also so as to ensure that any contentious procedure will have a clearly defined dispute as its subject matter (judgment of 2 April 2020, Commission v Poland, Hungary and Czech Republic (Temporary mechanism for the relocation of applicants for international protection), C‑715/17, C‑718/17 and C‑719/17, EU:C:2020:257, paragraph 91 and the case-law cited).
46


Those objectives require the Commission to grant the Member States concerned a reasonable period to reply to letters of formal notice and to comply with reasoned opinions, or, where appropriate, to prepare their defence. In order to determine whether the period allowed is reasonable, account must be taken of all the circumstances of the case (see, to that effect, judgment of 2 April 2020, Commission v Poland, Hungary and Czech Republic (Temporary mechanism for the relocation of applicants for international protection), C‑715/17, C‑718/17 and C‑719/17, EU:C:2020:257, paragraph 92 and the case-law cited).
47


The Court has thus held that a short period may be justified in particular circumstances, especially where there is an urgent need to remedy an infringement or where the Member State concerned is fully aware of the Commission’s views long before the procedure starts (judgment of 2 April 2020, Commission v Poland, Hungary and Czech Republic (Temporary mechanism for the relocation of applicants for international protection), C‑715/17, C‑718/17 and C‑719/17, EU:C:2020:257, paragraph 92).
52


In any event, as is apparent from the case-law of the Court, the fact that the Commission makes the pre-litigation procedure subject to short time limits is not in itself capable of leading to the inadmissibility of the subsequent action for failure to fulfil obligations. Such a finding of inadmissibility is only to be made where the Commission’s conduct prevented the Member State concerned from availing itself of its right to defend itself against complaints made by the Commission and thus infringed the rights of the defence, which it is for that Member State to prove (see, to that effect, judgment of 18 June 2020, Commission v Hungary (Transparency of associations), C‑78/18, EU:C:2020:476, paragraph 30 and the case-law cited).
56


As regards, in the second place, Hungary’s assertion that the Commission allegedly initiated the present infringement procedure with the sole aim of protecting the interests of the CEU and that it did so for purely political purposes, it must be recalled that the objective of the procedure provided for in Article 258 TFEU is an objective finding that a Member State has failed to fulfil its obligations under EU law (see, to that effect, judgment of 27 March 2019, Commission v Germany, C‑620/16, EU:C:2019:256, paragraph 40 and the case-law cited). According to settled case-law, in the context of such proceedings, the Commission enjoys a discretion as to whether or not to commence such proceedings, which is not for review by the Court (see, to that effect, judgment of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 49 and the case-law cited).
61


In Hungary’s submission, it is apparent from the case-law of the Court (judgment of 10 September 1996, Commission v Germany, C‑61/94, EU:C:1996:313, paragraphs 15 and 16) that the Commission is competent to examine the implementation of a WTO agreement which has become an integral part of EU law in the context of relations between Member States and the EU institutions, but not in the context of relations between a Member State and a third country.
65


In the second place, in the Commission’s submission, in accordance with Article 216(2) TFEU, international agreements concluded by the Union are binding on the Member States. Consequently, as is apparent from the case-law of the Court (judgment of 10 September 1996, Commission v Germany, C‑61/94, EU:C:1996:313, paragraph 15), non-compliance with those agreements by the Member States falls within EU law and constitutes a failure to fulfil obligations that is capable of being the subject matter of an action under Article 258 TFEU.
68


As a preliminary point, it must be borne in mind that, in accordance with Article 258 TFEU, an action for failure to fulfil obligations can have as its subject only the finding of a failure to comply with obligations under EU law (see, to that effect, judgment of 19 March 2002, Commission v Ireland, C‑13/00, EU:C:2002:184, paragraph 13).
69


The Court has repeatedly held that an international agreement entered into by the Union is, from its entry into force, an integral part of EU law (see, in particular, judgments of 30 April 1974, Haegeman, 181/73, EU:C:1974:41, paragraphs 5 and 6; of 21 December 2011, Air Transport Association of America and Others, C‑366/10, EU:C:2011:864, paragraph 73; and Opinion 1/17 (EU-Canada CET Agreement) of 30 April 2019, EU:C:2019:341, paragraph 117).
78


Until now, the Court has ruled either in the context of the assessment of the validity of an act of EU secondary law on grounds of the incompatibility of EU law with WTO law (see, in particular, judgment of 1 March 2005, Van Parys, C‑377/02, EU:C:2005:121, paragraphs 1 and 39 and the case-law cited), or in the context of the possible non-contractual liability of the Union and the exercise of the right to compensation for damage suffered (see, in particular, judgment of 9 September 2008, FIAMM and Others v Council and Commission, C‑120/06 P and C‑121/06 P, EU:C:2008:476, paragraphs 1 and 107).
87


It should also be recalled that, in accordance with settled case-law, the Union is bound, when exercising its powers, to observe international law in its entirety, including not only the provisions of international conventions that are binding on it, but also the rules and principles of general customary international law (see, to that effect, judgment of 27 February 2018, Western Sahara Campaign UK, C‑266/16, EU:C:2018:118, paragraph 47 and the case-law cited).
160


It must first of all be noted in that regard that the Court has ruled that the provision for remuneration of higher education courses is an economic activity falling within Chapter 2 when that activity is carried on by a national of one Member State in another Member State on a stable and continuous basis from a principal or secondary establishment in the latter Member State (judgment of 13 November 2003, Neri, C‑153/02, EU:C:2003:614, paragraph 39).
162


Next, the Court has ruled that freedom of establishment extends to a situation in which a company formed in accordance with the legislation of one Member State, where it has its registered office, wishes to set up a branch in another Member State, even where that company was formed, in the first Member State, solely for the purpose of establishing itself in the second, where its main, or indeed entire, business is to be conducted (judgment of 25 October 2017, Polbud – Wykonawstwo, C‑106/16, EU:C:2017:804, paragraph 38).
167


In accordance with the case-law of the Court, any measure which prohibits, impedes or renders less attractive the exercise of the freedom of establishment must be regarded as a restriction on that freedom (judgment of 6 September 2012, Commission v Portugal, C‑38/10, EU:C:2012:521, paragraph 26).
178


As the Court has consistently held, a restriction on the freedom of establishment is permissible only if, in the first place, it is justified by an overriding reason in the public interest and, in the second place, it observes the principle of proportionality, which means that it is suitable for securing, in a consistent and systematic manner, the attainment of the objective pursued and does not go beyond what is necessary in order to attain it (judgment of 23 February 2016, Commission v Hungary, C‑179/14, EU:C:2016:108, paragraph 166).
179


Moreover, it is for the Member State concerned to demonstrate that those cumulative conditions are met (judgment of 18 June 2020, Commission v Hungary (Transparency of associations), C‑78/18, EU:C:2020:476, paragraph 77).
181


It must be borne in mind first of all in that regard that, in the context of the fundamental freedoms guaranteed by the Treaties, reasons of public policy may be relied on only if there is a genuine, present and sufficiently serious threat to a fundamental interest of society (judgment of 19 June 2008, Commission v Luxembourg, C‑319/06, EU:C:2008:350, paragraph 50).
187


In the third place, the objective, invoked by Hungary, of ensuring high standards in the quality of higher education is indeed capable of justifying restrictions on the freedom of establishment (see, to that effect, judgment of 13 November 2003, Neri, C‑153/02, EU:C:2003:614, paragraph 46).
214


Second, where a Member State argues that a measure of which it is the author and which restricts a fundamental freedom guaranteed by the FEU Treaty is justified by an overriding reason in the public interest recognised by EU law, such a measure must be regarded as implementing EU law within the meaning of Article 51(1) of the Charter, such that it must comply with the fundamental rights enshrined in the Charter (judgment of 18 June 2020Commission v Hungary (Transparency of associations), C‑78/18, EU:C:2020:476, paragraph 101 and the case-law cited). The same applies with respect to Article 16 of Directive 2006/123.