The re‐entry paradox: Abuse of EU law

Published date01 November 2018
Date01 November 2018
The reentry paradox: Abuse of EU law
Roman Guski*
Abuse of law is a fundamental paradox: It is necessary to consider legal acts as illegal acts. The dis-
tinction legal/illegal is applied to itself. The article shows that the notion of abuse in the European
context is closely related to the antinomy of the Internal Market which describes itself as a
borderless area with internal borders. A closer look at the case law reveals that actors can make
use of the fundamental freedoms in the form of selfcontradictory arrangements (prototype: U
Turns). Put more generally, autonomy is taken seriously and subjective rights are not covered by
law when they are exercised in a tautological or paradoxical way.
A spectre is haunting Europe: Abuse of law. Jurisprudence has been using the concept for decades but there is no
usable definition to this day. Abusive, it is said, are artificial arrangements without economic reality
as if law
based plans and avoidance strategies were not economically very real and as if one could somehow innocently deal
with the mechanisms of law. So judicial rhetoric has switched from artificialto purely artificialarrangements.
noone knows what this purely artificial term is supposed to mean.
In addition to this conceptual embarrassment, contradictions arise. In company law the European Court of Justice
(ECJ) is known to tolerate circumventions of corporate rules under the flag of free establishment; by contrast, the
avoidance of tax burdens is increasingly being fought.
It seems like, among crucial common goods, some are consid-
ered more crucial than others.
It is also unclear whether an abuse of law is not covered by the right in question or
whether abuse only justifies national countermeasures. Furthermore, the scope of abuse remains cloudy: While the
discussion focuses mostly on market freedoms, there are plenty of decisions that consider arrangements abusive in
Freie Universität Berlin, Berlin, Germany.
ECJ, judgment of 14 December 2000, C110/99, EmslandStärke, ECR I11569, para. 39 ff., 43; judgment of 18 July 2007, C231/05,
Oy AA, ECR I6393, para. 62; AG Kokott, opinion of 10 September 2009, C311/08, SGI, ECR I487, para. 61. The legislator uses the
same formula, see e.g. Art. 4 (3) Regulation 2988/95 and Regulation (EC) no. 1782/2003 of 29 September 2003 , recital no. 21.
EuGH, judgment of 12 September 2006, C196/04, Cadbury Schweppes, ECR I7995; judgment of 13 March 2007, C 524/04, Test
Claimants in the Thin Cap Litigation, ECR I2107, para. 74; judgment of 6 April 2006, C456/04, Agip Petroli, ECR I3410, Rn. 22; judg-
ment of 23 September 2003, C109/01, Akrich, ECR I9665.
Cf. EuGH, judgment of 9 March 1999, C212/97, Centros, ECR I1459, and, on the other hand, judgment of 12 September 2006, C
196/04, Cadbury Schweppes, ECR I7995, para. 68.
It is possible, of course, to develop different arguments for different common goods. For example, in matters of creditor protection,
the ECJ emphasises the individual responsibility of creditors to protect themselves. But then, the question of abuse is shifted to the
justification leveland remains unresolved here.
Received: 17 May 2018 Accepted: 14 August 2018
DOI: 10.1111/eulj.12297
422 © 2018 John Wiley & Sons Ltd. Eur Law J. 2018;

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