Report 2011 - EFTA Court

the principles of legitimate expectations, legal certainty, equal
treatment and homogeneity. Finally, the fourth plea alleges that
ESA failed to provide sufficient reasoning, as required by Article
16 of the SCA, for its Decision of 24 March 2010.
V THE FIRST MAIN PLEA, ALLEGING INCORRECT APPLICATION OF
ARTICLE 61(1) EEA
48 The first plea alleges that ESA applied Article 61(1) EEA
incorrectly in relation to captive insurance companies. The
applicants contend that the contested tax provisions do not
distort competition by favouring certain undertakings or the
production of certain goods for the purposes of Article 61(1)
EEA. Moreover, they submit that captive insurance companies do
not qualify as “undertakings” within the meaning of Article 61(1)
EEA and that the contested tax measures do not confer a selective
advantage. in addition, the contested tax provisions are said to
have no effect on intra-EEA trade.
Notion of an undertaking
Arguments of the parties
49 The applicants submit that captive insurance companies do
not qualify as undertakings within the meaning of Article 61(1)
EEA as they only provide in-house services and, hence, are not
active on the free market for insurance. They contend that only
operations which are available on the free and open insurance
market can be classified as an “economic activity” conferring
the status of undertakings within the meaning of Article 61(1)
EEA. in that regard, the Principality of Liechtenstein submits
that an entity which does not exercise its activity on a market
in competition with other market players cannot be considered
to carry out an economic activity within the meaning of the
competition rules. The applicants also contend that ESA’s findings
in this regard are not compatible with its own decision practice.
50 ESA, supported by the Commission, contests this argument. in
ESA’s view, the concept of an “undertaking” has been defined in
the case-law of the ECJ as every entity engaged in an economic
Joined Cases E-4/10, E-6/10 and E-7/10 Principality of Liechtenstein, Reassur Aktiengesellschaft,
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Swisscom RE Aktiengesellschaft v EFTA Surveillance Authority