29 November 2019

The Rule of Law in a European Economic Area with National “Room for Manoeuvre”

The former president of the EFTA Court, Carl Baudenbacher, lashes out at more or less the entire Norwegian legal community in his attempt to explain how Norway’s social security authorities (“NAV”) have come to misinterpret Regulation 883/2004 on the coordination of social security systems for years, and how public prosecutors, defence lawyers, judges, academics and the EFTA Surveillance Authority all failed to reveal this. This reply challenges his narrative and attempts to explain how use of the “room for manoeuvre” that EU/EEA law leaves to the national legislator can very well be combined with loyal fulfilment of EEA law obligations in an EEA based on the rule of law.  

According to Mr. Baudenbacher, the failure of Norwegian authorities to recognize that the right to cash benefits under Norwegian social security law cannot be made conditional upon the recipients remaining at all times on Norwegian territory, is the result of a 25 year long campaign by Norwegian lawyers to obstruct the effect of EU/EEA law in Norway. In his narrative, this ‘collective defensive attitude of scholars, politicians, bureaucrats, and judges against EEA law’ sets Norway apart not only from the two other EFTA States in the EEA, Iceland and Liechtenstein, but also from all of the 28 EU Member States. In short, Norway is a “chauvinist”, anti-European and generally untrustworthy partner – the worst member of the entire EU/EEA club. All governments at least since 2008 have officially adopted a “Norway first”-policy that blatantly violates the principle that obligations flowing from international treaties are to be fulfilled in good faith. The courts have all somehow accepted this, so their apparent independence from the other branches of government must be only a smokescreen. The same is true for Norwegian lawyers who represent private parties in EEA-law cases against Norwegian authorities, as they neglect their clients’ interest in order to support the government’s anti-European strategy. As marionettes of the government, the academics at the law faculties are no better (with some very few exceptions). It is quite an outburst. If even close to correct, it is devastating to Norway’s rule of law credentials and standing as a credible partner of the EU.   

Countering the narrative

As Mr. Baudenbacher appears to count the EFTA Surveillance Authority among the institutions captured by the Norwegian government, references to the Authority’s assessment that Norway generally implements EU-law in a timely and correct way is unlikely to impress him. Nevertheless, others may be interested to know that in the Authority’s latest “Internal Market Scoreboard” (July 2019), Norway fared quite well – e.g. with a respectable 7th place in the all EU/EEA competition to transpose directives in time, and with a quite “normal” number of pending infringement proceedings. Furthermore, the independence of the EFTA Surveillance Authority vis-à-vis the EEA/EFTA States appear to be generally appreciated by the European Commission. As the two “watchdogs” cooperate closely (Article 109 EEA Agreement), there is hardly anyone better positioned to assess the work of the EFTA Surveillance Authority than the Commission. Thus far, the Commission has not sounded any alarm.

As to the current NAV scandal more specifically, the EFTA Surveillance Authority may well be criticised for not having discovered of its own motion that Norwegian authorities failed to give full effect to Article 21 of Regulation 883/2004 on the coordination of social security systems. However, thus far there is no evidence to suggest that the Authority was made aware of the matter and then decided to look another way. It is important to note that the implementation of the regulation into Norwegian law was technically correct, and that Norwegian authorities had assured the EFTA Surveillance Authority that the general rules of Norwegian social security law was to be set aside to the extent necessary to comply with EU/EEA law obligations. The problem was “only” that Norwegian authorities failed to recognize the reach of those obligations.  

If the assessment of the EFTA Surveillance Authority is deemed insufficient, the conclusions from the most recent meeting of EEA Council (November 2019) may be of interest. According to those, adopted jointly by the three EEA/EFTA States and the EU, the EEA Agreement generally works well as “a solid basis for a broad and strong relationship among the parties”. The recently released minutes from the previous meeting in May this year points in the same direction. As in previous meetings, the EU representatives certainly do not brush the challenges to the continued success of the EEA Agreement under the carpet, but Norway systematically undermining the effect of EEA law is not on the list. The same is true for the EU Council’s most recent conclusions on the Union’s relations with non-EU Western European countries (December 2018), where it is stressed that the “excellent” relationship between Norway and the EU is based on shared values, “notably respect for human rights and democratic principles”. If compared to recent EU assessments of the rule of law credentials of some of the EU’s own member states, one may question whether Norway really is the worst member of the entire family.

Further, if Mr. Baudenbacher’s narrative was correct, one should expect an influx of complaints against Norwegian authorities to the EFTA Surveillance Authority, to the Commission, to the European Court of Human Rights etc., at least from foreigners represented by non-Norwegian lawyers. However, no such development has been reported.

As to the national courts, it is true that their relationship to the EFTA Court has not always been the best. The lack of referrals from Norwegian courts to the EFTA Court has been criticized, even by some of us chauvinist professors, and this seems to have had some effect. Indeed, if due account is taken to the size of the country and the caseload of the Supreme Court, the number of referrals from the justices in Oslo in the last couple of years compare favourably with those of the highest court of several EU Member States. 

It is also true that there have been a few occasions on which Norwegian courts have disagreed with the interpretation of EEA law advocated by the EFTA Court in an advisory opinion, but only in cases where it could reasonably be argued that so would the CJEU if asked to rule on the same matter. It is important to stress here that the jurisdiction of the EFTA Court differs from that of the CJEU, as the EEA/EFTA States were only willing to let the EFTA Court answer questions from national courts by way of advisory opinions (with the EU accepting this). Opinions may well differ as to whether Norwegian courts or the EFTA Court “got it right” in these few cases of disagreement, but it cannot reasonably be considered a rule of law problem that a national court exercises its constitutional right to disagree with an advisory opinion. It may be added that the number of CJEU judgments diverging from interpretations of common EU/EEA rules previously advocated by the EFTA Court, easily exceeds those (very few) from Norwegian courts. The judicial architecture of the EEA is complicated and by no means perfect, but as long as all courts involved apply the same methodology and engage with each other in an open and constructive dialogue, any remaining disagreements will be well within the boundaries of the rule of law.

As to binding judgments from the EFTA Court, e.g. in infringement proceedings brought by the EFTA Surveillance Authority, they have always been complied with by Norway, albeit sometimes with little enthusiasm and on a few occasions rather late. A quick look at CJEU case-law reveals several similar cases from various EU member states, and also quite a few examples of rather more serious non-compliance. That is certainly no excuse for Norwegian authorities in the cases where they have taken too long to react, but it does considerable harm to the “worst in class”-narrative presented by Mr. Baudenbacher.

The same is true if one has a closer look at EEA law cases in Norwegian courts. The principle of State liability for violations of EEA law, one of the examples mentioned by Baudenbacher, was not only acknowledged unanimously by the full Supreme Court back in 2005 (HR-2005-01690-P); the majority also held the breach in question to be sufficiently serious, thus paving the way for an approach to later such cases that cannot in any way be describes as “State friendly”. The experiences with State liability cases in certain other EU/EEA member states appear to be more mixed, to say the least.

False equations and insufficient differentiation

As to the application of the EU/EEA law principle of proportionality, another category highlighted by Mr. Baudenbacher, it is true that Norwegian courts have sometimes struggled with its application. This, however, cannot justify a “worst in class” label. A comparison with the other Nordic EU/EEA member states reveals similar challenges, and it is hardly a bold claim that there are examples of national courts also in other parts of the EEA that have found the EU/EEA law principle of proportionality challenging.

Part of the reason for the characterization of the NAV case as a scandal, is that there is evidence to suggest that the social security authorities for quite some time decided not to appeal unfavourable decisions from the Social Security Tribunal in order to keep the disputed legal question out of the higher courts. If proven, it is indeed an affront to the rule of law which must have consequences for those responsible. It does not, however, fit Mr. Baudenbacher’s narrative of captured Norwegian courts. If the judges all adhere to a “Norway first” dogma, surely the authorities would have nothing to fear from letting the Court of Appeal rule on the matter?    

The fundamental flaw with Mr. Baudenbacher’s outburst is that he believes the so-called “room for manoeuvre” policy to be a legal concept. As professor Hans Petter Graver tries to explain in his comment to Baudenbacher’s post, it is not. No Norwegian government have ever claimed that a wish to protect the Norwegian legislator’s “room for manoeuvre” is in itself a valid legal argument of relevance to the interpretation of EEA law, nor have any Norwegian court considered it as such. General references to the EU law principle of subsidiarity may perhaps have been made, but that can hardly be characterised as chauvinist.

Contrary to Mr. Baudenbacher’s claim, Norwegian authorities’ desire to protect the room for national policies that EU/EEA law leaves to the Member States, is very much in line with the rule of law. In fact, much more so than the alternative, which would be to introduce a kind of “safety margin” in all EEA-related matters, to the detriment of the democratically elected legislator.

The name of the policy, in particular in the English translation, is perhaps not the best, as it can be misunderstood to be more than it is: An advice to parliament to 1) enact the laws parliament wants to enact, as long as parliament itself (with the help of the experts in the ministries) sincerely believe those laws to be in line with Norway’s EEA law obligations, and to 2) defend such laws in the courts.   

Mr. Baudenbacher’s claim that no other EU/EEA member state does the same is quite simply wrong. Anyone following the case-law of the CJEU will be able to come up with numerous cases where various EU member states have enacted, and then defended, national rules that the Commission and/or private parties consider to violate EU law. A comparison of the positions defended by the Norwegian government before the EFTA Court (or before national courts) and those defended by the governments of various EU member states before the CJEU, does not in any way support a claim that Norway is a particularly stubborn defendant that wastes the courts’ time with attempts to save national rules that clearly violate EU/EEA law (and that therefore should never have been enacted in the first place). It may well be, however, that no other government has felt the need to give this approach to EU/EEA law a particular name. After all, it is no more than a combination of the principles of democracy and legality in an EEA based on the rule of law.

Focusing on the actual problems

Still, as pointed out by professor Graver in his post on the NAV scandal, application of national laws that test the reach of EU/EEA law does raise questions of legal certainty and effective judicial protection for the individuals involved. This calls for transparency, guidance of private parties and affordable access to the courts, in particular in cases involving ordinary citizens. It also calls for an understanding of the courts as the authorities’ best friends in a common mission to honour the obligations that flow from the EEA Agreement. Thus, in the NAV case, rather than trying to avoid the courts, the social security authorities should from the very beginning have informed persons wishing to travel abroad whilst receiving cash benefits from NAV that the interpretation of the EEA rule in question was not obvious, provided legal aid in a test case and then seized the opportunity to let the courts decide the matter. If the government were to clarify that this is the approach to follow in the future, parliament’s “room for manoeuvre” can very well be combined with loyal fulfilment of EEA law obligations in an EEA based on the rule of law.


SUGGESTED CITATION  Fredriksen, Halvard Haukeland: The Rule of Law in a European Economic Area with National “Room for Manoeuvre”, VerfBlog, 2019/11/29, https://verfassungsblog.de/the-rule-of-law-in-a-european-economic-area-with-national-room-for-manoeuvre/, DOI: 10.17176/20191129-181006-0.

10 Comments

  1. skuli magnusson Sa 30 Nov 2019 at 01:14 - Reply

    In 2011 I (at the time Registar of the EFTA Court) felt compelled to answer Halvard Haukeland Fredrikssen´s direct and indirect encouragement to Norwegian judges (and quasi-judicial bodies) in Aftenposten not to refer cases to the EFTA-Court. My answer is attched for those interested. However, Halvard´s view only echoed the views of certain other Norwegians jurists, in particular those of Finn Arnesen and Fredrik Sejersted (who was entrusted to compile the formidable 2011 NOU Inside/Outside Report).It is good to see that the tide seems to be turning in Norway and there is growing understanding for sound cooperation within the EEA/EFTA, inter alia with regard to Norwegian referrals to the EFTA Court: Better late than never!

    Skuli Magnusson

    https://www.aftenposten.no/meninger/kronikk/i/EW0wA/forklare-ikke-avskrekke

  2. Professor Mads Andenas Sa 30 Nov 2019 at 08:00 - Reply

    As one in the “Norwegian Legal community, I am with Baudenbacher and Magnussen.

    The Prime Minister last week ordered her ministers to report on compliance with EEA law in their respective fields. That is a more adequate response.

    I have voiced much the same criticism of the peculiar “room of manoeuvre” doctrine and practice and the lack of references to the EFTA Court.

  3. Diana Torrens Sa 30 Nov 2019 at 17:11 - Reply

    I am not a conspiracy theorist. In my view, it is simply a matter of getting EEA law thinking more integrated into the mainstream of Norwegian thinking, legal and general. This can be addressed in part by integrating EEA law into all law courses at the universities and through better training of officials applying those laws. I agree with Professor Fredriksen that ‚room to manoeuvre‘ is an unfortunate translation.

  4. Carl Baudenbacher So 1 Dez 2019 at 09:13 - Reply

    Professor Dr Dr Mads Andenæs has, together with Professor Dr Dr Eirik Bjørge and Andreas Motzfeldt Kravik (today a high civil servant in the Norwegian Ministry of Foreign Affairs) warned of the consequences of “Room for Manoeuvre” long before the NAV scandal broke. In 2015, these farsighted authors wrote: “The last thing the Norwegian authorities should do is to move towards a lower limit. In practice, balancing on the outer edge of the treaty obligations will bring Norway into frequent breach of treaties, and also encourage others to do the same. The line Sejersted (sc. today Norway’s State Attorney, arguably the inventor ‘RFM’) recommends is contrary to the principles on which the rule of law and international law are based.” (“Det siste norske myndigheter bør gjøre, er å legge seg mot en nedre grense. Balansering på traktatforpliktelsenes ytterkant vil i praksis bringe Norge i hyppige traktatbrudd, og dessuten oppfordre andre til å gjøre det samme. Den linje Sejersted tilrår, er i strid med prinsippene som rettsstaten og folkeretten bygger på.” My translation.) (Mads Andenæs, Andreas Motzfeldt Kravik og Eirik Bjørge, ‘Menneskerettsspørsmål for Høyesterett som EMD ikke har tatt stilling til’, Lov og Rett 06/2015).

    The essay’s main topic is the European Convention on Human Rights. But that is not decisive. What matters is that the authors directly addressed Mr. Sejersted’s strategy of expanding the national Norwegian margin of manoeuvre by challenging the European courts and the limits of EEA and EU law. In the end, they explained how some Norwegian authorities’ approach to human rights is relevant to their violations of the EEA Agreement.It is ludicrous to assert that RFM is a good thing in itself, but unfortunately it went wrong in the NAV case.

    In EEA law, RFM can best be exploited if the EFTA Court doesn’t stand in the way. That’s why the RFM freaks have been drumming against references all the time. And lo and behold, in the NAV case they were successful, over many years, if not decades. It is indeed remarkable that a Norwegian professor, who for years has systematically urged Norwegian courts to refrain from referrals to the EFTA Court, is now, as politicians realise the scale of the disaster, sitting on his high horse. On the other hand, Judge Skúli Magnússon, arguably one of the best registrars in the history of the EFTA Court, has understood that EEA law cannot be dealt with by means of stubborn orthodox dualism. There is not only black and white in real life, even if it may seem so to some of those who are living in an ivory tower.

    Post scriptum: With regard to the European Convention on Human Rights, the failure of RFM has recently been confirmed by Norway’s crushing defeat in the Strand Lobben case (judgment of the Grand Chamber of the European Court of Human Rights, application no. 37283/13). State Attorney Fredrik Sejersted himself pleaded this case for the Norwegian Government. Anyone who watches the webcast of the hearing on that court’s website (https://www.echr.coe.int/Pages/home.aspx?p=hearings&w=3728313_17102018&language=en) understands without further ado why Mr. Sejersted’s performance went down like a lead balloon. As usual, his intervention was less marked by legal arguments than by political preaching how the Human Rights Court should keep out of Norwegian affairs. If that ever worked, it does not do so anymore. At least not before European courts.

    • Jonathan Sumpton So 21 Mrz 2021 at 07:43 - Reply

      The author states „No Norwegian government have ever claimed that a wish to protect the Norwegian legislator’s “room for manoeuvre” is in itself a valid legal argument of relevance to the interpretation of EEA law, nor have any Norwegian court considered it as such.“

      This seems to presume Norwegian governments always „claim“ all they wish for and everything Norwegian courts „consider“ is expressed.

      Regarding use of the phrase „Room For Manoeuvre“, that was used by Norway’s Ministry of Labour as early as 2013

      „Jeg mener det er viktig at vi finner en løsning som er i tråd med EUs trygdeforordning, samtidig som vi utnytter det handlingsrommet vi har, sier arbeidsministeren til egne nettsider.“

      6 years later, the Norwegian government is holding a press conference confessing it has implemented EEA law incorrectly failing to uphold its treaty obligations

      Now, Arbeid og Velferds / ASD are claiming EU nationals, forced to pay trygdeavgift since 1997, denied residence permits by UDI, told by NAV that following Sections 2-1 and 2-14 paragraph 4 of the National Insurance Act, because they were not registered as legally resident in Norway, they could not be members of Folketrygden and receive benefits including free healthcare actually HAVE been members of Folketrygden all the time but NAV staff have made no mistakes thus, no compensation will be paid.

      I believe I am not alone in possessing an email from UDI informing me it was illegal for me to live in Norway without a residence permit

      Skatteetaten’s web site carried the text

      „Persons who are resident in Norway are as a rule obliged to be members of the Norwegian National Insurance Scheme, cf. the National Insurance Act section 2-1.
      A person is deemed to be resident if his/her stay in Norway is intended or has lasted for at least 12 months. It is a condition that the person in question has a residence permit in Norway. Membership applies irrespective of the employee’s citizenship and the employer’s nationality“

      With Norway declaring as resident in Norway „for tax purposes“ EU nationals not meeting the criteria to live legally or be registered as living in Norway adding trygdeavgift to their tax assessments, it would seem Norway has (following ECtHR / EMD case law gaygusuz vs Austria September 1996) failed to uphold Article 1, Protocol 1 of the ECHR denying thousands of EU nationals peaceful enjoyment of their possessions (11.2% of their income or benefits in return) for at least 25 years

      All this before we even consider the damage the EU has tolerated Norway doing to „fundamental rights“ throughout the EEA

      So „room for manoeuvre“ means Section 2-1 of the National Insurance Act actually states individuals do not have to be resident in Norway to be members of folketrygden and all those receiving tax demands from Norway containing trygdeavgift sent to addresses outside of Norway have been illegally denied benefits by NAV? Has NAV misinterpreted EU law AND Norwegian law?

  5. Halvard Haukeland Fredriksen So 1 Dez 2019 at 22:36 - Reply

    Many thanks for the comments.

    I certainly agree with Skúli Magnusson that the increase in referrals from Norwegian courts to the EFTA Court in recent years is a positive one; with Mads Andenæs that the Norwegian Prime Minister’s request to her ministers to report on compliance with EEA law in their respective fields is to be welcomed and with Diana Torrens that EEA law ought to be better integrated into the different law courses that are taught at Norwegian universities.

    As to the lengthy comment from Mr. Baudenbacher, its prime target appears to be the Attorney General of Norway. I thus limit myself to reiterate that the rule of law cannot compel EU or EEA member states to refrain from enacting laws which their national parliaments believe to be within the “room for manoeuvre” that EU/EEA leaves them, just because the legal assessment is uncertain. What the rule of law do require, however, is for the authorities to facilitate affected citizens’ access to independent courts with jurisdiction to settle the matter, and thereafter to comply with the judgment.

    As to the accusation that I have “directly and indirectly” (Magnusson) or “systematically” (Baudenbacher) urged Norwegian courts to refrain from making referrals to the EFTA Court, the short answer is quite simply that it is unfounded.

  6. Vaslav Smith Do 6 Feb 2020 at 05:01 - Reply

    Norway’s failures to correctly apply EU law extend far beyond Article 21 of Regulation 883/2004. This provides yet more ammunition for those who seek to undermine the EU and see its demise. I am unsure at the moment if the lack of official statements on „NAV Skandalen“ from EFTA, the EU Commission, the Council of Europe, the EU Parliament is a sign they are not interested or following events closely or too angry to speak. If EU citizens affected by the Art 21 883/2004 catastrophy feel the EU doesn’t care, the EU loses support so it is going to have to be seen to respond to the treatment of citizens it encourages to exercise their „four freedoms“ by working around the EEA. Put simply, the EU does not expect their citizens to be treated like this and neither do the citizens or their families and friends, many of whom will have been supporting EU citizens who worked in Norway since 1994. The EU may decide, under pressure from affected individuals and their campaigns raising awareness about „NAV Skandalen“ for years into the future, Norway cannot be trusted not to discriminate against EU citizens and take measures to protect or warn EU citizens to protect themselves.

    The backlash against Norway on social medial will remain there forever soiling Norway’s good reputation

    Ultimately, it is the EU which will decide if the EEA Agreement should continue.

    If Norway is going to inspire EU members like the UK to leave the bloc and then undermine the „four principles“ or freedoms, I would expect the EU to contract into a more federal and protectionist, self-sustaining and contained entity the exclusion from which will harm Norway in terms of trade and the migration of necessary workers.

    Pressure for change will come from states from which Norway accepted the largest numbers of migrant workers against whom Norway has discriminated.

    If the EU is not seen to be all about people, why would it find widespread support?

    I also suspect Norway will ultimately withdraw from the European Convention on Human Rights realising it has itself vacated the moral high ground it once occupied.

    This is regrettable.

  7. Jonathn Sumpton Sa 22 Feb 2020 at 07:36 - Reply

    I believe the text „However, thus far there is no evidence to suggest that the Authority was made aware of the matter and then decided to look another way“

    The ESA has removed access to minutes of the „college meetings“

    http://www.eftasurv.int/press-publications/minutes-of-college-meetings/2019

    I have copies of at least one.

    How does the author know which cases the Authority has opened and closed and why?

  8. Jonathn Sumpton Sa 22 Feb 2020 at 07:56 - Reply

    From the November 2013 college meeting minutes

    „Case 71453: Complaint case against Norway concerning residence permit and
    related social security rights
    Decision 775083
    The College adopted a decision_.1q_qlele a complaint case arising from an alleged
    failure by Norway to comply with Articles 28 and 29 of the EEA Agreement by
    applyrng a different interpretation of the concept of „residence“ in terms of
    taxation, immigration and social security to the detriment of an EEA citizen, as
    Decision No. 451/15 I COL“

  9. Jonathan Sumpton Sa 22 Feb 2020 at 11:30 - Reply

    The author writes

    “ others may be interested to know that in the Authority’s latest “Internal Market Scoreboard” (July 2019), Norway fared quite well – e.g. with a respectable 7th place in the all EU/EEA competition to transpose directives in time, and with a quite “normal” number of pending infringement proceedings. “

    I believe Norway can happily implement EU directives and regulations on the growing of figs, oranges, olives, dates, apricots and „anything that only happens down there“ whilst, on the other hand, Norway was declaring as resident in Norway „for tax purposes“ EEA nationals who, under Norwegian law, could not be granted the right of permanent residence in Norway until 2008. So, we have a period of at least 14 years after the signing by Norway of the EEA Agreement where EEA nationals, paying Trygdeavgift to Norway could not be registered as living in Norway and, on the grounds they were not registered as living in Norway (on the folkeregister), they were denied cash benefits, free medical care and other services. Some of those affected will almost certainly have died, perhaps prematurely as a result of being rendered destitute by Norway’s failure to correctly apply Articles 28 and 29 of the EEA Agreement as well as Article 21 of regulation 883/2004

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