Keenan and Riches’BUSINESS LAW

Chapter 2Law making

Not all treaty provisions are directly effective. The cri-

teria used to determine whether a provision is directly

effective were developed by the ECJ in Van Gend en Loos

and subsequent cases. The provision:

■must be clear and unconditional;

■must not be qualified by any reservation on the part

of member states which would make its implementa-

tion conditional on legislation being passed under

national law;

■must contain an absolute prohibition; not an obliga-

tion to do something but an obligation to refrain

from doing something (CostavENEL(1964));

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Figure 2.5The nature and effect of Community law

could be relied on by Van Gend en Loos. The ECJ con-

cluded that: ‘the Community constitutes a new legal order

of international law for the benefit of which the states have

limited their sovereign rights, albeit within limited fields,

and the subjects of which comprise not only Member

States but also their nationals.... Community law there-

fore not only imposes obligations on individuals but is also

intended to confer upon them rights which become part

of their legal heritage. These rights arise not only when they

are expressly granted by the Treaty but also by reason of

obligations which the Treaty imposes in a clearly defined

way upon individuals as well as upon the Member States

and upon the institutions of the Community.’