1.5.1. Necessity mid Proportionality of the Application of Mandatory Rules of Law

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The hindrance to interstate trade caused by the application of a national measure may

not exceed the level of what is necessary for and proportionate to the protection of

the overriding interest at stake. A 'necessity and proportionality' test is in fact a familiar

feature of a Member State's private international law in respect of mandatory rules

of law. The international scope of mandatory rules of law typically depends on the

question of to what extent the objective of the norm necessitates its application in

cross-border situations. Or, to use the wordings of Article 7 of the Rome Convention,

' [ i ] n considering whether to give effect to ( . . . ) mandatory rules, regard shall be had

to their nature and purpose and to the consequences of their application or nonapplication'.""

However, where it concerns the application of mandatory rules of law to (cross-border) transactions in the exercise of one of the freedoms, the 'necessity'

in light of the purpose of the rule as well as the 'proportionality' of the consequences

of its ( n o n - ) application are not to be determined by reference to national law and

interests alone. Instead, within the scope of the freedoms, whether the application of

a mandatory rule oi law is necessary and proportionate must also be viewed from a

Community law perspective and the requirements of the internal market.

Admittedly, the 'necessity' requirement under the freedoms has a strong substantive

law character. Thus, the Court examines in particular whether the protection may be

achieved through alternative means that are less burdensome to interstate trade. The

focus of this examination is substantive and not private international law, although

the practical result may be that the national measure becomes inapplicable rendering

a rule of private international law ineffective. The application of a national mandatory

rule in a particular cross-border situation may also exceed what is considered necessary

by virtue of the principle of mutual recognition. The application of a national mandatory

rule of law will not be deemed necessary where the interests at stake are already

sufficiently protected by the laws of the Member State of origin."' The result, again,

is that the national rule of private international law providing that a national rule is

applicable to a cross-border situation becomes ineffective.

However, the necessity requirement has also a clear conflicts dimension. In a crossborder

context the Court equally examines whether the application of the substantive

norm to a particular case is in fact necessary for the protection of the interest, f or

example, Alpine Investments BV had submitted that the extraterritorial application

of the Dutch prohibition on cold calling was not necessary; the Netherlands could and

should have relied on the law of the receiving Member State. The Court rejected this

argument and held that the application of the Dutch measure to Belgian consumers

could be considered necessary for the protection of the reputation of the Dutch

financial market, as the Netherlands was in the best position to regulate 'cold calling'."

1 he necessity of applying a national rule to cross-border cases was equally at issue in

the case of Vander Elst.'" Here it concerned a French rule requiring a work permit by

the Office des Migrations Internationales (OMI) for all non-nationals wishing to takeup

paid employment in France. Vander Hist, who operated a demolition business in

Belgium, was confronted with this measure when he was contracted to carry out work

in I-ranee for which he used a team of his regular employees. Vander Elst was fined for not having the necessary permits. The Court held that the French measure resulted

in an obstacle to the freedom to provide services. Accordingly, the question was

whether the application of that measure could be justified by reasons of the public

interest. As the Court noted, the French measure was intended to regulate access to

the French labour market. However, the workers, who came to France as part of a provision

of service, did 'not in anyway seek access to the [French] labour market'."' In

other words, the application of the French measure to those contracts of employment

was held to be unnecessary.