EU tax law WEB United Kingdom v Council - C-656/11

18.2.2012   

EN

Official Journal of the European Union

C 49/20

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annul the Council Decision of 16 December 2011 (1) on the position to be taken by the European Union in the Joint Committee established under the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, as regards the replacement of Annex II on the coordination of social security schemes;

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order the Council of the European Union to pay the costs of the proceedings.

1.

By an action brought under Article 263 TFEU, the United Kingdom of Great Britain and Northern Ireland is seeking the annulment, pursuant to Article 264 TFEU, of the Council Decision of 16 December 2011 on the position to be taken by the Union in the Joint Committee established under the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, as regards the replacement of Annex II on the coordination of social security schemes.

2.

Article 48 TFEU is the sole substantive legal basis specified in the Decision.

3.

The Decision relates to the amendment of Annex II to the Agreement of 21 June 1999 between the European Union and its Member States, of the one part, and the Swiss Confederation, of the other part, on the free movement of persons. Annex II to the Agreement is exclusively concerned with the coordination, as between the EU and Switzerland, of social security systems. The purpose of the amendments to Annex II that the disputed Decision would introduce is to reflect changes in the EU machinery of social security coordination. One effect of the contemplated changes to Annex II would be to extend to Swiss nationals who are neither themselves economically active nor members of the family of a person who is so active (‘non-actives’), rights that they do not derive from the present Annex II regime.

4.

In the contention of the United Kingdom, Article 48 TFEU cannot serve as the sole substantive legal basis of a measure intended to have such consequences. It is a provision designed to facilitate freedom of movement (a) within the Union, not between the Union and third countries; and (b) by persons who are economically active or their families, not by non-actives. The correct legal basis is Article 79 (2) (b) TFEU. This confers competence for the adoption of measures in the area of ‘the definition of the rights of third country nationals residing legally in a Member State, including the conditions governing freedom of movement and of residence in other Member States’.

5.

Article 79 (2) (b) TFEU is found in Title V of Part Three of the Treaty. Pursuant to Protocol 21 to the Treaties, measures adopted under Title V do not apply to the United Kingdom (or Ireland) unless it signals its willingness to ‘opt into’ them. By its erroneous choice of Article 48 TFEU, instead of Article 79 (2) (b) TFEU, as the substantive legal basis of the Decision, the Council refused to recognise the right of the United Kingdom to choose not to participate in the Decision and be bound by it.

6.

The annulment of the Council Decision of 16 December 2011 is, therefore, sought on the ground that it was adopted on the wrong legal basis, with the consequence that the rights of the United Kingdom under Protocol 21 were not recognised.