Report 2011 - EFTA Court

Commission [2004] ECR i-i2717, paragraphs 59 and 60, and the
case-law cited).
174 in the light of those principles, it is appropriate to consider
whether the contested decision contains a sufficient statement of
reasons as regards the various aspects raised.
175 First, it must be examined whether the Decision provides
sufficient reasons for ESA’s conclusions on the extent to which
there is a commercial market for all captive insurance companies.
Second, the reasoning as regards the selectivity of the contested
tax provisions and, third, the reasoning why ESA did not consider
the tax provisions justified by the nature and the general scheme
of Liechtenstein’s tax system will be examined. Finally, the Court
will examine the reasoning on the issue of recovery.
The first part of the fourth plea: reasons given for the extent to which
there is a commercial market for all captive insurance companies
176 in chapter 1.2.1. of its Decision, ESA stated that providing
insurance is a service, which in principle is an economic activity
and that captive insurance companies offer insurance services for
a premium on a given market. The fact that the clients of captive
insurance companies are restricted only to undertakings of the
same group to which they belong did not affect this conclusion.
177 ESA then went on to address the arguments submitted in the
administrative procedure that captive insurance companies only
provide in-house services and are not active on the commercial
market. ESA observed that competition in the insurance market
is impacted upon by the availability of alternatives to taking
out traditional insurance products. ESA also described its view
that there were three main alternatives; self-insurance, captive
insurance and alternative risk transfer products. in each case,
the primary reason for using a substitute for insurance was the
potential for reducing costs.
178 in ESA’s view, a captive insurance company enabled investment
income on the premiums to be retained within the group and
potentially allowed for more flexibility in the pattern of premiums.
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