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PR(08)82: The Authority takes Liechtenstein to the EFTA Court regarding residence clauses for lawyers, patent lawyers, auditors, trustees and certain positions in the banking sector

17.12.2008

The EFTA Surveillance Authority decided today to bring Liechtenstein before the EFTA Court regarding residence clauses for lawyers, patent lawyers, auditors and trustees, as well as for members of the management board and the executive management of a bank established on Liechtenstein territory.

The EFTA Surveillance Authority has previously pursued residence requirements for the above mentioned professions. Moreover, the previous residence requirement in the banking sector was declared incompatible with the freedom of establishment contained in Article 31 of the Agreement on the European Economic Area by the EFTA Court.[1] In the aftermath of the judgement Liechtenstein Government adopted new legislation which entered into force on 26 July 2007. The new provisions also contain residence clauses, although different from the previous ones.

The new provisions that are applicable for lawyers, patent lawyers, auditors and trustees in Liechtenstein allow establishment only if the applicant provides proof of a residence, wherefrom he is able to perform his duties actually and on a regular basis. Furthermore,  the new Banking Act requires that the members of the management board and of the executive management must, by reason of their residence, be in a position to actually and flawlessly perform their functions and duties.

The Authority has concluded that regardless of how strict these residence requirements are to be interpreted in practice, the lack of clarity as to its scope in itself implies that the provisions are unjustifiable and therefore contrary to Article 31 of the EEA Agreement and the principle of legal certainty.

The same would apply for management positions in banks where the member of management would be regarded as a worker. The residence requirement therefore also  infringes Article 28 of the EEA Agreement on free movement of workers and self-employed persons.

 

For further information, please contact:

Mr. Niels Fenger
Director, Legal & Executive Affairs Directorate
tel. (+32)(0)2 286 18 30

Bjørnar Alterskjær
Deputy Director, Legal & Executive Affairs Directorate
tel. (+32)(0)2 286 18 98

 

 

 

 



[1]Case E-8/04 EFTA Surveillance Authority vThe Principality of Liechtenstein [2005] Report of the EFTA Court, page 48.




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