Luxemburg, 24/04/2007 (Agence Europe) - On Tuesday 24 April, the Court of Justice delivered its judgment in case C-523/04. The matter having been referred by the Commission, the Court judged that 1957 and 1992 air transport agreements between the Netherlands and the United States infringed the right of establishment and the external competence of the Community in certain areas. However, with the recent development in the “Open Skies” agreement between the EU and the US, any contentious bilateral agreements will have been superseded.
The 1957 agreement in itself is tolerated by European law, because it dates from before the Treaties of Rome came into force in January 1958. The Court, however, judged that the amendments brought to this agreement through exchange of notes in 1992 created a new agreement, notably through the express inclusion of several new commitments and the review of the 1957 agreement as a whole. This being so, the terms of the 1992 exchange of notes had to comply with the arrangements in the EC Treaty. These terms could, in practice, harm competitors of Dutch airlines. An Italian company, for example, is not allowed to transport passengers to the United States from a Dutch airport, and this restriction constitutes a clear violation of freedom of establishment. Consequently, the Court judged the agreement incompatible with the EC Treaty.
In addition, the exchange of notes mentioned above was, according to the Court, carried out with no regard to the Community's exclusive competence in this area. Council regulation 2409/92 does not allow member states to conclude such agreements, in that they involve a commitment by a third country operator on tariffs on intra-Community routes.
This judgment confirms the joint cases of 2002 on the same issue. The Commission had taken several similar decisions with regard to the United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria and Germany. It was found that all these member states had infringed the freedom of establishment and all, except the United Kingdom, had infringed the Community's competence (Cases C-466/98 and others, see EUROPE 8334).
It should be noted that the recent “Open Skies” agreement between the EU and the United States, and approved by the appropriate ministers in all member states (including Dutch Transport Minister Caliel Eurlings) will overtake all these bilateral agreements as soon as it comes into force in March 2008 (see EUROPE 9392). As the spokesman for the transport commissioner, Michele Cercone, explained: “The Open Skies agreement replaces all the previous bilateral agreements with the United States”. The first steps towards reciprocal opening of air connections are modest, but this is only the start. “The agreement is a bit skewed, and the Europeans are not all that happy,” said Aimée Turner of the specialist magazine Flight International, who pointed out, however, that the second stage would include real opening of the US market to European operators. Whatever shape it takes, as long as this new European agreement remains in force, Court judgments will only be of symbolic importance. (cd)