Italy: Ryanair fined for failing to assist passengers in volcanic ash crisis

Italy has fined Irish low-cost airline Ryanair 3 millon EUR for failing to help passengers after cancelling their flights during the volcanic ash crisis. Italy's civil aviation authority said it knew of 178 cases of passengers who did not receive mandatory assistance, such as food, between 17 and 22 April. Ryanair denies the allegations.

Source: BBC News; find article here>>.

European court of Justice: Sardinian regional tax on touristic stopovers infringes Community law

Legislation adopted by the Region of Sardinia introduced, as from 2006, a regional tax on stopovers for tourist purposes by aircraft used for the private transport of persons or by pleasure boats over fourteen metres in length. The tax is payable by natural or legal persons who have their tax domicile outside the territory of the region. With regard to the pleasure boats, the tax applies to undertakings which carry out transport operations for remuneration or free of charge. With regard to the aircraft, on the other hand, the tax is payable only by undertakings which carry out air transport operations free of charge, for reasons connected with their business activities.

In the course of two actions brought against that law by the Italian President of the Council of Ministers, the Italian Constitutional Court made its first reference to the Court of Justice for a preliminary ruling.

In his judgment in Case C-169/08 the Court considered that the difference between residents and non-residents constituted a restriction on freedom of movement since there was no objective difference in their situations which could justify the difference in treatment as between the various categories of taxpayer.

The fact that taxpayers in Sardinia contribute, through income tax, to the activities of the region, even those for the protection of the environment, was irrelevant since the tax on stopovers was not of the same nature and did not pursue the same objectives as the other taxes paid by Sardinian taxpayers.

According to the Court, it is common ground that the tax concerns trade between Member States (since it applies to services provided in connection with stopovers by aircraft and recreational craft and concerns intra-Community trade) and it may distort competition (since it grants an economic advantage to operators established in Sardinia). In addition, the regional tax law which grants certain undertakings exclusion from the obligation to pay the tax in question involves a renunciation by the region of tax revenue which it would normally have received. Lastly, the tax confers a selective fiscal advantage only on enterprises established on the territory of the region, as compared with undertakings which do not have their tax domicile there, since those two categories of undertaking are in a comparable factual and legal situation when they receive stopover services in Sardinia.

Source: ECJ press release 101/09 of Nov. 17, 2009

Action against Italy (ECJ Case C-121/09) re Art 7 PTD

Form of order sought a declaration that the Italian Republic has failed to fulfil its obligations under Article 7 of the ptd

Pleas in law and main arguments

1. By fixing a period of three months from the foreseen date of the end of travel for the purpose of making an application for action by the Guarantee Fund for package travel consumers, the Italian Republic has failed to fulfil its obligations under Article 7 of Directive 90/314.

2. Article 7 of Directive 90/314 provides that the organiser and/or retailer party to the contract is to provide sufficient evidence of security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency. According to the interpretation given in Community case-law, that provision imposes an obligation of result on the Member States, which entails affording the purchaser of package travel the right to effective protection against the risks of the organisers' insolvency and, in particular, the refunding of sums paid over and repatriation.

3. Next, Article 8 allows Member States to adopt more stringent provisions, but only if the latter offer greater consumer protection.

4. In the instant case, the object of the Italian legislation in question, according to information sent by the national authorities during the infringement procedure, is to ensure that the State budget has the opportunity of recovering sums paid to consumers and so of preserving the State's financial interests instead of ensuring greater protection for the purchasers of package travel.

5. Although the Commission understands that Italy has an interest in ensuring the proper balanced running of the Guarantee Fund, making it easier for the latter to bring an action for indemnity against the tour operator, it takes the view that such a measure, by imposing an absolute limit on the presentation of the application for action by the Fund, introduces a condition capable of depriving the consumer of the rights guaranteed by Directive 90/314.

6. It is true, as the Italian authorities maintain, that consumers may make their application for action by the Fund as soon as they are aware of circumstances that threaten to prevent the performance of the contract. However, in order to avail themselves of that opportunity they must be aware of those circumstances. Excluding those cases in which the travel organiser's insolvency is obvious, by reason of a declaration of insolvency, in most cases consumers do not know the exact financial situation of the operator. It is therefore reasonable that they should in the first place turn to the operator to obtain repayment of sums paid, sending it a letter, perhaps a reminder, and finally an order to pay. In that manner there is a risk that the period of three months fixed by Article 5 of Ministerial Decree No 349/1999 may already have long elapsed when the application is made for action by the Fund, with the result that consumers are deprived of the right to obtain the refund of the sums paid.

7. To remedy the infringement alleged in these proceedings, the Italian authorities declared, first, that they wished to extend from three to 12 months the period in which the application may be made and then that they intended to abolish it.

8. In addition, they published in the Official Gazette of the Italian Republic a communication informing potentially interested persons that, pending abolition of the period in question, for the purposes of ensuring consumer protection applications may be made to the Guarantee Fund at any time.

9. The Commission considers that such measures, while a laudable attempt to make good the consequences of the infringement complained of, do not do enough to eliminate the risk that purchasers of package travel may be deprived of their right to effective protection in the event of the organiser's insolvency.

European Court of Justice: Costs of disposing of waste from a sinking oil tanker from coastline and beaches to be imposed on producer

The Italian company ENEL concluded a contract with Total International Ltd for the supply of heavy fuel oil from Dunkirk (France) to Milazzo (Italy). To carry out the contract, Total raffinage distribution, now Total France SA, sold the heavy fuel oil to Total International Ltd, which chartered the oil tanker Erika, flying the Maltese flag. On 12 December 1999 the Erika sank off the coast of Brittany (Finistère, France), spilling part of her cargo and oil from her bunkers into the sea and causing pollution of the Atlantic coastline of France.
The municipality of Mesquer brought proceedings against the companies in the Total group for reimbursement of the cost of cleaning and anti-pollution operations on its coastal territory, relying on the Waste Directive. The municipality claimed that the hydrocarbons accidentally spilled at sea constituted waste within the meaning of the directive, so that the companies Total International Ltd and Total France should be liable for the cost of disposal, in their capacity as ‘previous holders’ or ‘producer of the product from which the waste came’ respectively.
The Court considers that the heavy fuel oil carried by the ship is not ‘waste’, as it is exploited or marketed on economically advantageous terms and is capable of actually being used as a fuel without requiring prior processing. However, such hydrocarbons spilled in connection with a shipwreck, mixed with water and sediment and drifting along the coastline of a Member State until being washed up on shore, must be regarded as substances which their holder did not intend to produce and which he discards, albeit involuntarily, while they are being transported, so that they must be classified as waste within the meaning of the directive.
The Court recalls that the Waste Directive provides, in accordance with the ‘polluter pays’ principle, that that cost must be borne by the ‘previous holders’ or the ‘producer of the product from which the waste came’. The shipowner may be regarded as having produced the waste and on that basis be classified as a ‘holder’ within the meaning of the directive. However, the national court may consider that the seller of hydrocarbons and charterer of the ship carrying them has ‘produced’ waste if it finds that the seller-charterer contributed to the risk that the pollution caused by the shipwreck would occur. If, however,the national law of a Member State, including the law derived from international agreements, prevents that cost from being borne by the shipowner and the charterer, even though they are to be regarded as ‘holders’, such a national law will then have to make provision for that cost to be borne by the ‘producer of the product from which the waste came’, if he has contributed by his conduct to the risk that the pollution caused by the shipwreck will occur.

Source: ECJ press realease>>.

"State aid: Commission launches in-depth investigation into €300 million loan granted to Alitalia by the Italian State"

According to the E.U. Press Room, "The European Commission has decided to launch an in-depth investigation to ascertain whether the loan granted to Alitalia by the Italian State is compatible with the Community rules on state aid. At this stage, the Commission believes that the loan - which the Italian company has the option of incorporating into its equity capital- could constitute aid that is incompatible with the common market. The investigation will give all the interested parties the opportunity to submit their comments."

This Press Release is available in full text.

Italy: significant decrease in night train travelers

As reservations for sleeping cars went down more than 45 percent from 2001 to 2007, Italian railway company "Trenitalia" announced to cease overnight railway services on the lines from Rome and Venice to Nice. However, consumer associations claim the enormous decrease at some extent was caused by bad quality of service: sleeping cars were often uncomfortable and sometimes even dangerous. The railway company by contrast blames low cost carriers for the trend.

Source: "Il Giornale"

"VAT: Commission takes steps against 8 Member States as regards the application of the travel agents' scheme"

As just stated by the EU Press Room, "The European Commission has formally requested Poland, the Netherlands, Portugal, France, Italy, Finland, Greece and the Czech Republic to amend their legislation with regard to the application of the special VAT 'margin' scheme for travel agents. The request is in the form of a reasoned opinion which is the second stage of the infringement proceedings provided for in Article 226 of the Treaty. If these Member States fail to comply with the reasoned opinion within two months, the Commission may refer the matter to the Court of Justice of the European Communities."

This Press Release is available in full text.

"State aid: European Commission opens investigation into support to Alghero airport, Italy"

As stated by the EU Press Room, "The European Commission has decided to launch a formal investigation into support that would have been granted by the Sardinia Region and SOGEAAL SpA, the publicly owned company operating Alghero airport, to various air carriers, and by the Sardinia Region to SOGEAAL SpA. The investigation will allow the Commission to assess whether such support falls afoul of EU State aid rules.
The Commission's investigation will focus around three separate aspects. Firstly, the Commission will investigate agreements between SOGEAAL and Irish air carrier Ryanair concerning marketing support and other contributions. In this regard, one of the main aspects of the Commission's in-depth inquiry will be to assess whether the support provided could have been granted by a market economy investor, in which case such support would not fall under EU State aid rules.
Secondly, the Commission will investigate a number of handling fee rebates which are apparently granted to low-cost air carriers at Alghero airport.
Finally, the Commission considers that financial support and compensation granted to SOGEAAL SpA for its operating losses and capital increase might constitute State aid in favour of the airport operator.
Should the formal investigation lead to the conclusion that one or several of these measures constitute State aid, the Commission will need to assess whether they can be declared as 'compatible State aid'.
The Commission has launched this formal investigation following a complaint from a competing airline."

Italy Scraps Tourist Tax Proposal

A proposal to introduce a levy on tourists visiting Italy has been scrapped by the coalition government, much to the relief of the country's tourism industry. The draft government budget for 2007 had originally contained a measure that would have allowed local authorities to put in place an EUR5 (US$6.40) charge per tourist per day to help them meet the growing costs of maintaining historic monuments. However, the measure received widespread opposition from parties within the governing coalition, including from the Prime Minister's own governing centre-left party, which acknowledged the tourist industry's fears that the tax would deter people from spending holidays in Italy.

Source: http://www.tax-news.com

"The Commission opens a formal enquiry into restrictions to air services to Sardinia"

According to the EU Press Room, "The Commission has decided to open a formal investigation into the rules imposed by Italy on 2 May 2006 on 16 air routes between three Sardinian airports and important airports on the Italian mainland. The Commission has serious doubts as to the conformity of the Italian public service obligations with the aviation market rules and considers that they may close the market to Sardinia. Italy has to react within two months upon receiving the Commission's notice.
'This possible abuse threatens the principle of public services that I strongly support. The European Commission must ensure that public services are not used to close a profitable market from competition', said Jacques Barrot, Vice-President of the European Commission in charge of transport. 'This is what the European Commission must check in this case'."

This Press Release is available in full text.

New Consumer's Code

It has been approved the Code of the Consumption, a complex job, by the precious contribution of the Commission of study presided from prof. Guido Alpa and other experts of the matter, with the collaboration of the mainly representative consumer’s associations. With the decree legislative n. 206 of the 6 september 2005 (published in italian Official Gazzette G.U. n. 235 of 8-10-2005 – S.O. n.162) has been reordered and simplified the norm on the protection of the consumers, in coordination with the principles and the addresses of the law n. 229/2003, in accordance of the obligation of semplification ordered by comunitarian law. The purpose of the code is to favor the information and the protection of the consumer, with the assurance of the correctness of the processes negotiation. The code also defines the rights and the interests of the consumers and the customers, the protection system in national and local center and the class action. There are also some dispositions in competition matter, transparency and information in the market and in the quality of the products and the services and about the liability of the producer. Regarding tourism law, it has to point out that from the date of entrance in vigor of the present code the decree legislative 17 march 1995, n. 111 (in accomplishment of the directive 90/314/CEE, concerning the travels, the vacations and the circuits "all comprising") is repealed.

(Originally posted by Gianluca Rossoni)

Milan Airports

The Commission has declared the arrangements for distribution of air traffic between Milan's two airports (a new airport was recently opened) as contrary to EU law. The effect of the arrangements is to give advantage to Alitalia. [IP/98/795]

(Originally posted by John Downes)