Brev | Dato: 02.07.2013 | Finansdepartementet
- EFTA Surveillance Authority
- Rue Belliard 35
- 1040 Brussels, Belgium
- Att: Case Handler: Rakel Jensdottir
Case No: 72962, Event No: 669028
Vår referanse: 12/5208 MarB/KR
Brev til EFTA Surveillance Authority
Reference is made to the letter from the EFTA Surveillance Authority of 15 May 2013, in which the Authority invites the Ministry of Finance to provide information and comments regarding principles of state liability.
First, the Authority requests a clarification as to whether there exists domestic state liability rules that are more beneficial to complainants than the EEA state liability doctrine and, if so, whether such domestic rules would be applied in cases concerning infringements of EEA law. Second, the Norwegian authorities are invited to inform the Authority whether the EEA principle of state liability is “regularly [applied]… as an exhaustive principle or are there any examples of administrative/judicial practice where they allow the full application of the principle of equivalence”?
The Authority requests comments and information by 31 July 2013.
The Ministry of Finance acknowledges that the Authority finds our previous comments in the letter of 22 March 2013 inexhaustive and welcomes the opportunity to clarify these issues. An elaboration and clarification of the previous answers may address the concerns raised in the Authority’s letter and may also serve to explain why some of the others aspects touched upon are disputed.
2.1 Edquist and other case law
The Ministry recalls at the outset that the Supreme Court acknowledged the principles of effectiveness and equivalence in Edquist (consonant with general case law). This is explicitly stated in paragraph 65 in connection with restitution of unlawful taxes and levies:
“I add for the sake of completeness that the states in accordance with EEA-law are obliged to have rules which give the citizens a right of restitution of taxes or levies that have been collected in violation of the EEA-agreement. The detailed drafting of such rules is left to the national parliamentary authorities, but EEA-law imposes minimum requirements. Amongst others must the conditions of judicial review, herein provisions concerning time limits, ensure that effective enforcement of the rules is not prevented (principle of effectiveness). Nor is it legitimate to impose specific conditions of judicial review which makes it more burdensome to enforce infringements of the EEA-agreement than others errors pertaining to the tax (principle of equivalence).”
Regarding the issue of state liability, it will be recalled that the complainants in Edquist argued that the state should be held liable on the basic of domestic tort law as well the EEA doctrine of state liability. The complainants claimed, first, that the state was liable on the grounds that the tax decisions were incompatible with EEA law and, second, that the tax legislation was incompatible with EEA law.
As for the first claim, the Supreme Court dismissed these pleas on the grounds that the procedural time limits had not been respected (paragraph 60). These time limits apply equally to tax decisions which are challenged on the grounds of domestic law (in the strict sense), see e.g. LB-2003-20732 X Marine Ltd. It may be added, for the sake of completeness, that domestic tort law does not recognise strict liability for unlawful exercise of public authority, see Rt 2010 p. 291 Vangen Eiendom paragraph 33:
“On the basis of the existing case law, it must be concluded that there is no general principle of strict liability for unlawful exercise of public authority.”
This principle has been followed in subsequent case law of the Courts of Appeal, see e.g. LB-2009-136211 Iso+, LB-2010-12206 Hval Sjokoladefabrikk and LF-2010-108453 Marinebreed.
The second claim in Edquist was, as mentioned, that the state should be held liable on the grounds that the tax legislation was incompatible with the main part of the EEA agreement. However, there is no domestic liability regime governing conflicts between acts of Parliament, which is the situation equivalent to the facts of Edquist. The Supreme Court therefore dismissed the complainants’ assertions and noted that in this context there was no “room for a ‘domestic’ liability doctrine which shall supplement the EEA liability doctrine” (paragraph 62).
The situation was largely the same in Finanger II, which likewise concerned the legality of an act of Parliament, albeit this time in conflict with a directive and not the main part of the EEA agreement. In that judgment the Supreme Court noted likewise that there was no domestic liability regime applicable to such Parliamentary errors and the EEA state liability regime therefore exhaustively regulated the legislature’s responsibility for incorrect or erroneous implementation of a directive (paragraphs 105-106).
Hence, there are no grounds for asserting that the principle of equivalence was not acknowledged or respected in Edquist (or Finanger).
2.2 Drawing the lines together
Against this background, the Ministry would like to reaffirm three points which may not have been sufficiently clear in our previous letter.
First of all, the Norwegian authorities, including the Supreme Court, acknowledge the principles of effectiveness and equivalence inherent in the EEA-agreement. General statements to this effect are explicitly stated in Edquist.
Second, there are no domestic rules governing state liability in the case of conflicts between domestic laws and therefore the principle of equivalence was not applicable in Edquist and mutatis mutandis Finanger II.
Third, there is no general principle of strict liability for unlawful exercise of public authority. Hence, even if the case law concerning state liability for unlawful exercise of public authority were to be transposed to acts of Parliament and conflicts between national laws – which would seem to go beyond the proper application of the principle of equivalence – this would not provide more beneficial grounds for complainants than the EEA principle of state liability.
The last two points serve to explain why, in so far as the Ministry is aware, there is hardly any case law except Finanger II and Edquist concerning the issue of state liability and the principle of equivalence. The reason is not, as have been pointed out above, that national authorities do not acknowledge these principles, but that in the field of state liability domestic law either does not provide an alternative remedy (conflicts between laws) or does not provide a more beneficial remedy (conflict between laws and decisions). The Ministry should add that tort law encompasses a wide field and a significant body of case law, and therefore cautions against providing too general and abstract guidance. But the overview set out above is, to the Ministry’s best knowledge, representative of the current state of law.
Deputy Director General
Senior Tax Adviser