(Reference for a preliminary ruling — Article 355(3) TFEU — Status of Gibraltar — Article 56 TFEU — Freedom to provide services — Purely internal situation — Inadmissibility)
SOURCE: Court of Justice of the European Union, Annual report 2017
On 13 June 2017, in the judgment in The Gibraltar Betting and Gaming Association, the Grand Chamber of the Court ruled on the interpretation of Articles 56 and 355(3) TFEU. This judgment was delivered in the context of proceedings in which a trade association of Gibraltar-based gambling operators had challenged the compatibility with EU law, particularly the provisions on the freedom to provide services, of a new tax regime adopted by the United Kingdom targeting, inter alia, remote gambling. In order to determine whether or not Article 56 TFEU could be relied on in this case, the Court was invited to determine whether the provision of gambling services by operators established in Gibraltar to customers in the United Kingdom concerned, under EU law, a ‘purely internal situation’.
The Court first of all pointed out that Gibraltar is a European territory for whose external relations a Member State is responsible, namely the United Kingdom. EU law applies to that territory under Article 355(3) TFEU, subject to the exclusions expressly provided for in the 1972 Act of Accession, which do not, however, cover freedom to provide services.
Next, the Court examined whether the provision of services at issue constitutes a ‘purely internal situation’, that is to say a situation which is confined in all respects within a single Member State. In that regard, it considered that although it is true that Gibraltar does not form part of the United Kingdom, that fact is not decisive in determining whether two territories must, for the purposes of the applicability of the provisions on the four freedoms, be treated as a single Member State. Furthermore, to treat trade between Gibraltar and the United Kingdom in the same way as trade between Member States would be tantamount to denying the connection, recognised in Article 355(3) TFEU, between that territory and that Member State. It follows, in the Court’s view, that the provision of services by operators established in Gibraltar to persons established in the United Kingdom constitutes, under EU law, a purely internal situation to which the provisions of the TFEU on freedom to provide services do not apply.
Lastly, the Court made clear that that interpretation of Article 355(3) TFEU, in conjunction with Article 56 TFEU, has no effect on the status of the territory of Gibraltar under international law and cannot, therefore, be understood as undermining the separate and distinct status of Gibraltar.