Sample Solution

Shortly after the ruling in Centros, the Court released the Emsland Stärke judgment. This case concerned the common agricultural policy. Emsland Stärke exported various forms of starch to Switzerland, and received an export refund for this. Immediately after, the same products were transported (unaltered) back to Germany, where they were sold. Upon return, the German authorities reclaimed the unduly granted refund back from Emsland Stärke.

Though the Court did not explicitly state that abuse of Community law is a general principle, it agreed with the Commission and implicitly did so. It set up a twofold test for determining such abuse; one part being objective and the other subjective. By including the subjective intention of an interested party involved, Emsland Stärke narrowed down the wide scope the prohibition of abuse had in Van Binsbergen, while conduct which under Centros criteria would be normally considered a mere exercise of fundamental freedoms, would instead constitute abuse, if the objective and subjective elements of the test were cumulatively met.

3.1.1 The Objective element
In establishing the objective element, the Court did not deviate from what was already established in previous caselaw. In order to fulfil this element, it must be proved that the person seeking to have the right has obtained it for the achievement of an “improper advantage, manifestly contrary to the objective of that provision”. Thus, if the right in question is exercised within the aims and limits of Union law, there is no abuse, merely a legitimate exercise of a right.