Enforcing WTO/GATS law and fundamental rights in EU infringement proceedings: An analysis of the ECJ’s ruling in Case C-66/18 Central European University

This article analyses the ECJ’s ruling in Case C-66/18 (Central European University), in which the Court found that two amendments to Hungary’s Law on Higher Education violate EU law and the WTO GATS Agreement. The ruling is remarkable in legal and political terms: it touches upon a series of fundamental issues, such as the EU’s efforts to protect European values, democracy and the rule of law in its Member States, infringement proceedings against Member States for their failure to comply with international agreements, the applicability of the Fundamental Rights Charter in EU external relations, the tension between the ECJ and the WTO dispute settlement system, national measures enacted to ward off ‘undesirable’ investments and other cross-cutting questions of EU law.


Introduction
On 6 October 2020, the Court of Justice (ECJ) handed down a ruling that is remarkable in legal and political terms: the Court found that two amendments to Hungary's Law on Higher Education violate EU law, including the WTO GATS Agreement. These 2017 amendments have also been referred to as a 'lex CEU', as they were reportedly targeted at the Central European University (CEU), which has meanwhile relocated most of its operations from Budapest to Vienna due to this law.
The case touches upon a series of fundamental issues, such as the EU's efforts to protect European values, democracy and the rule of law in its Member States, infringement proceedings against Member States for their failure to comply with international agreements, the applicability of the Fundamental Rights Charter in EU external relations, the tension between the ECJ and the WTO dispute settlement system, national measures enacted to ward off 'undesirable' investments and other cross-cutting questions of EU law.

Background and facts of the case
According to the aforementioned amendments to Hungary's Law on Higher Education, a foreign higher education institution is only permitted to offer teaching services leading to a qualification in Hungary if two conditions are fulfilled: first, higher education institutions established outside the European Economic Area (EEA) may not offer education leading to a qualification in Hungary, unless an international treaty on fundamental support for the activities in Hungary has been concluded between the Government of Hungary and the government of the State in which the foreign higher education institution has its seat ('the requirement of an international treaty'). 1 Second, a foreign higher education institution carrying on activities in Hungary must be a Staterecognized higher education institution in the country in which it has its seat and must also 'genuinely offer higher education' in that country ('country of origin requirement'). 2 As the CEU was the only university in Hungary which did not fulfil these requirements at the time when the amendments entered into force, the latter has also been referred to as a 'lex CEU'. 3 The CEU had been founded in 1991, under the law of the State of New York, in order 'to promote critical analysis in the education of new decision-makers in the Central and Eastern European States in which pluralism had previously been rejected'. 4 The CEU has never offered teaching services in the US. Its main funders are the Open Society Foundations established by George Soros. 5 In 2018, the European Commission initiated infringement proceedings against Hungary under Article 258 TFEU before the ECJ, claiming that Hungary had failed to comply with its obligations under EU law. In its enforcement action, the Commission argued first that the aforementioned requirement of a prior international agreement violates the obligation to provide national treatment under Article XVII of the GATS, which according to ECJ case law forms an integral part of EU law. Second, it submitted that the requirement to provide education services in the country of origin likewise disregards Article XVII of the GATS as well as the EU internal market freedom of establishment, the freedom to provide services and the EU Services Directive. 6 Thirdly, the Commission requested the ECJ to declare that these requirements also violate Article 13 (freedom of the arts and sciences), Article 14(3) (right to education and freedom to found educational establishments) and Article 16 (freedom to conduct a business) of the EU Charter of Fundamental Rights (hereinafter: the Charter (FRC)). 7

Fundamental issues raised in this case
This case lies at the intersection of a series of significant legal and political developments. On the one hand, it has frequently been argued that some EU Member States such as Hungary are proceeding towards illiberal democracy. The primarily relevant safeguard in the form of proceedings under Article 7 TEU has, however, proved insufficient to effectively halt these developments. Therefore, instead of relying on Art 7 TEU, the Commission has brought a sequence of enforcement actions under Article 258 TFEU that target individual national measures violating EU law. These actions have inter alia concerned the Hungarian law on the transparency of organizations which receive support from abroad ('NGO law'), 8 Hungarian legislation that criminalizes activities in support of asylum applications and further restricts the right to request asylum 9 and the Hungarian scheme requiring compulsory retirement of judges. 10 The present case is yet another one in this string of enforcement actions that have been instituted as a 'substitute faute de mieux' for Article 7 TEU proceedings and other effective remedies. 11 Another facet of this case concerns the enforcement of international agreements, concluded by the EU with third countries, against EU Member States failing to comply with such agreements. Infringement proceedings of this type have been opened by the Commission several times in the past. 12 However, this has rarely happened based on agreements forming part of GATT Moreover, whereas annulment proceedings and preliminary reference procedures in which the validity of EU secondary law had been challenged on the basis of WTO law have not succeeded before the ECJ due to the fact that the ECJ denies direct effect of WTO law in the EU legal order, the ECJ has held that infringement proceedings for a Member State's failure to comply with WTO law are permissible nonetheless. This means that (the lack of) direct effect is relevant in the first constellation, but does not appear significant in the second one. 14 Hence, the present case also raises the question as to whether the Court would confirm the dichotomy of distinguishing between proceedings against the EU on the one hand and infringement proceedings against its Member States on the other hand.
Yet another important question concerns the relationship between the WTO dispute settlement system, EU law and the ECJ itself. In previous cases, the ECJ has had occasion to deal with the relationship between rulings issued in the WTO dispute settlement system and EU law in two types of situation: first, in the context of the assessment of the validity of EU secondary law on grounds of incompatibility with WTO law (within the preliminary reference procedure) 15 and, second, in the context of possible non-contractual liability of the EU due to EU infringements of WTO law (within proceedings under Art 268 and 340 TFEU). 16 In the present judgment, however, the Court has for the first time been called upon to deal with the relationship between the WTO dispute settlement system and enforcement action against a Member State in infringement proceedings under Article 258. 17 This issue arouses heightened interest not least due to the fact that the WTO dispute settlement system has been in crisis for a considerable time, given that the appointment of new members of the WTO Appellate Body has been blocked in particular by the US. Consequently, the Appellate Body does not have the requisite minimum number of members anymore and the WTO dispute settlement system is therefore currently not fully operative. 18 To some degree this context may also be reflected in the question, addressed by Advocate General (AG) Kokott to the ECJ, as to 'what extent infringement proceedings can serve as an instrument to enforce and increase the effectiveness of international trade law'. 19 An additional important issue concerns the applicability of the EU Fundamental Rights Charter in EU external relations: it seems to be the first time that the Commission has invoked the applicability of the Charter based on an alleged Member State violation of an international agreement.
Yet another facet of this ruling is its relevance for national measures against 'undesirable' investments. As is well known, one of the EU's internal market freedoms, namely the free movement of capital, is equipped with erga omnes effect, which means that it can be invoked by thirdcountry nationals. The other fundamental freedoms, such as the freedom of establishment, do not have such erga omnes effect. In this context, it should be recalled that the Court has found in earlier case law dealing with investors from third countries that investors cannot invoke the free movement of capital vis-à-vis the EU and its Member States, when such investors acquire definite influence over undertakings in the EU, as in such cases the free movement of capital is eclipsed by the freedom of establishment (which cannot, however, be invoked by third-country nationals). 20 In short, the EU and its Member States can ward off 'unwelcome' investments from third countries without the possibility for third-country investors to directly rely on the erga omnes effect of the free movement of capital. 21 To some degree, this hurdle may be overcome as a result of the present case: namely, insofar as the GATS can be invoked in infringement proceedings dealing with Member State measures restricting investments made by third-country investors; and, additionally, insofar as fundamental rights under the Charter could be invoked in proceedings dealing with such national measures.

Relevant features of the WTO/GATS framework
Before we move on, it may be helpful to briefly recall some of the features of the GATS which are relevant for this case. This agreement constitutes Annex 1B of the WTO Agreement that was concluded by the EU and its Member States as a mixed agreement in 1994. The WTO Agreement has been approved by Decision 94/800/EC and forms an integral part of EU law. 22 With the entry into force of the Lisbon Treaty in 2009, the EU's Common Commercial Policy (CCP) has been extended to fully cover trade in services so that the GATS as a whole now comes under the EU's exclusive CCP competence.
The GATS relies on a so-called positive scheduling approach as regards two of its central provisions, namely the obligations to provide market access and national treatment (Articles XVI and XVII of the GATS, respectively). Accordingly, these obligations only apply to the extent that a given WTO Member has explicitly subjected (that is, positively listed) given services sectors in its country-specific schedule of GATS commitments. 23 Importantly, as regards the education sector, Hungary had entered into a full commitment to offer national treatment to like services and like service suppliers from other WTO Members in its original national GATS schedule. 24 In 2019, the EU concluded several agreements with a series of WTO Members concerning adjustments of the national GATS schedules of its Member States that were necessary to take account of the EU accession of Hungary and other states. These agreements constituted a precondition for the entry into force of a new 'Consolidated Schedule' of EU-25 commitments under 20

The ECJ's judgment: analysis and comments
The following sections will focus on the ECJ's reasoning concerning its jurisdiction for the GATS, its analysis of the GATS and the applicability of the Charter in cases where EU Member States implement or restrict the application of an international agreement such as the GATS. This analysis will also address arguments of AG Kokott that have not been dealt with by the Court.

A. International agreements, GATS and the jurisdiction of the Court under Article 258 TFEU
Hungary first claimed that the ECJ does not have jurisdiction to hear the case with respect to the Commission's complaint concerning infringements of the GATS, given that the area of higher education does not fall within EU competence. According to Hungary, therefore, only the Member States concerned should be regarded as being responsible individually for any failure to comply with their GATS obligations concerning higher education services. 26 In this context, it should be recalled that according to established ECJ jurisprudence international agreements concluded by the EU form an integral part of EU law as from their entry into force. 27 They can therefore become relevant in several types of proceeding before the ECJ. In particular, due to their rank between primary and secondary law, international agreements concluded by the EU can serve as a standard of review for secondary law both in annulment proceedings and preliminary references questioning the validity of secondary law. Furthermore, in the latter procedure, the ECJ has jurisdiction to interpret such international agreements. Moreover, the ECJ has jurisdiction to find whether a violation of an agreement concluded by the EU gives rise to non-contractual liability of the EU. 28 In addition, since international agreements concluded by the EU form an integral part of EU law ranking above national law, 29 they can also serve as a standard of review in infringement proceedings against Member States under Article 258. As mentioned above, EU Member States have been subjected to such enforcement actions under Article 258 in several cases already, but only once in a case involving an agreement forming part of the GATT/WTO framework. 30 As indicated, the WTO Agreement (including the GATS as one of its annexes) has originally been concluded by the EU and its Member States, and the EU's exclusive competence under the CCP was extended to the GATS in the 2009 Lisbon Treaty; furthermore, the original countryspecific Hungarian GATS-commitments (which cover higher education services) were adopted by 25 Furthermore, in this case there was no prior WTO ruling giving rise to questions of the latter's implementation in the EU. 34 The ECJ stressed that the objective of the infringement proceedings in the case at hand was the avoidance of international liability, 35 given that 'review undertaken as part of the WTO's dispute settlement system may result in a legal finding that measures taken' by the EU are not in conformity with WTO law. 36 Furthermore, the ECJ recalled that WTO law obliges the EU to ensure compliance with WTO law 'in its internal legal order'. 37 Rejecting Hungary's claim, the ECJ emphasized that the existence of a self-standing dispute settlement system in the WTO has no bearing on its own jurisdiction for infringement proceedings under Article 258: quite the contrary, 'the exercise of that jurisdiction is entirely consistent with the obligation of each WTO member to ensure observance of its obligations under the law of that organisation'. 38 Furthermore, underlining that the EU is bound to observe international law in its entirety, the Court referred to the Articles on the Responsibility of States for Internationally Wrongful Acts, 39 It is worth noting first that the ECJ explicitly held that a WTO ruling constitutes a 'legal finding' that can ultimately give rise to international liability. This stands in clear contrast to a 2005 judgment of the EU's Court of First Instance (now the EU's 'General Court'), in which that Court had found that the WTO 'does not establish a mechanism for the judicial resolution of international disputes by means of decisions with binding effects comparable with those of a court decision in the internal legal systems of the Member States'; 42 a reasoning that has been understood as having been confirmed by the ECJ later on. 43 Secondly, in view of the Court's aforementioned reasoning and express choice of words, it has rightly been observed that the ECJ, in the case at hand, appears to conceive of itself as a court that -like a national court ensuring compliance with WTO law in the 'internal legal order' 44 -is subordinated to an international dispute settlement mechanism such as the WTO dispute settlement system, rather than as a competing court on the international level. 45 Third, it is remarkable that the ECJ, in its reasoning, refers to the Articles on the Responsibility of States for Internationally Wrongful Acts (ASR) but not the Draft Articles on Responsibility of International Organizations (DARIO). Likewise, it bears mentioning that the ECJ refers to the 1969 VCLT, which deals with treaties between states, rather than to the 1986 Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations. 46 Of course, it can be argued that the UN General Assembly 'took note' of the ASR, 47 whereas the DARIO still constitutes a draft. Also, it can be submitted that the 1969 VCLT is in force and incorporates rules of customary international law (the latter being binding for the EU as well). 48 In sum, however, it has rightly been argued that the aforementioned indications suggest that the ECJ seems to conceive of the Union as being closer, on the level of international law, to a federal state than to an international organization.

C. Infringement proceedings and direct effect
As is well known, the ECJ has persistently taken the view that GATT/WTO law cannot be directly applied in the EU legal order. 50 Consequently, private persons and companies cannot normally invoke WTO law in the EU. 51 The ECJ famously extended this reasoning in the 1994 Germany/Council judgment, where it found that even Member States cannot challenge the validity of EU secondary law in annulment proceedings on the basis of WTO law either. 52 Moreover, in FIAMM, the ECJ has denied the possibility of bringing claims for damages based on violations of WTO law against the EU. 53 As mentioned above, however, the Court has held in the 1996 Commission/Germany case (dealing with an agreement concluded in the GATT/WTO framework) that it may hear enforcement cases against EU Member States for their failure to comply with an international agreement, even if the latter does not have direct effect in EU law. 54 This approach has been confirmed in the present case, in which the Commission has been regarded as being entitled to bring an enforcement action based on the GATS agreement against Hungary. In other words: The ECJ has clearly confirmed the apparent dichotomy that EU Member States cannot bring cases challenging the legality of EU secondary law on the basis of WTO law, but may be sued in infringement proceedings, if their own national legal acts disregard WTO law.
It is worth noting that the Advocate General has tried to provide additional reasons that are meant to explain these two differing approaches to what seem to be two sides of the same coin: she first recalled that the ECJ has rejected the direct applicability of WTO law in actions for annulment and in references for preliminary rulings on the validity of EU acts (thereby preventing WTO law from serving as a standard of review for EU legal acts) in order to ensure that the EU's position is not weakened by Court rulings during diplomatic negotiations that can take place in the framework of WTO dispute settlement proceedings. By contrast, according to the Advocate General, infringement proceedings brought by the Commission against a Member State on grounds of WTO law do not run counter to 'the aims and particular character' of WTO dispute settlement: 55 since infringement proceedings before the ECJ can ensure the effective enforcement of WTO rulings in the EU, the possibility of triggering such enforcement proceedings actually strengthens the negotiating position of the EU in the WTO. Moreover, there could be cases where the EU itself might be convinced that a Member State is not complying with WTO law. Bringing infringement proceedings in such cases would also underline the EU's willingness to adhere to WTO  Incidentally, it could be asked whether the Court's approach in the case at hand may also have implications for the possibility of bringing claims for compensation against Member States that infringe their obligations under WTO law. In FIAMM, the Court had found that the 'decisive factor' for denying private persons the right to claim damages for violations of WTO law that are committed by the EU is the fact that such rulings could have the effect of undermining the EU's position 'in its attempt to reach a mutually acceptable solution' in diplomatic negotiations within the framework of WTO dispute settlement proceedings. 57 Furthermore, according to the Court, 'there is ( . . . ) no reason to draw a distinction ( . . . ) according to whether the legality of [EU action] is to be reviewed in annulment proceedings or for the purpose of deciding an action for compensation'. 58 Hence, if one brings together the Court's reasoning in FIAMM and that of the ECJ and AG Kokott in the present case, then this could prima facie imply that private persons may be entitled to bring actions for state liability against Member States infringing WTO law: one reason being that claiming state liability may -similar to infringement proceedings under Article 258 -help ensuring the effective enforcement of WTO rulings in the EU (thereby avoiding international responsibility of the EU on the international level for violations of WTO law committed by its Member States); a second reason being that -again similar to infringement proceedings -the possibility of claiming state liability may strengthen the negotiating position of the EU in the WTO. This line of reasoning, however, encounters a limit ensuing from the ECJ's case law on liability: according to the Court, state liability requires that the norm which is infringed by a Member State is meant to grant rights to private persons. Pursuant to the ECJ, however, WTO law does not confer such rights on individuals. 59

D. Conflict avoidance techniques
Mention should also be made of the fact that AG Kokott made two suggestions as to how conflicting decisions of the ECJ on the one hand and WTO dispute settlement bodies on the other hand could be avoided. According to her point of view, infringement proceedings could be stayed as long as concurrent WTO proceedings are in progress. In addition, the ECJ could reduce its intensity of review to manifest violations of WTO law, so as to take account of the 'ultimate jurisdiction' of the WTO dispute settlement system. 60 Incidentally, restricting the intensity of review to manifest breaches of WTO law had also been proposed in the literature before: thus, Eeckhout has argued that denying direct effect of WTO law (and thereby preventing challenges against EU law before 57. Cases C-120/06 P and C-121/06 P FIAMM, para. 116 ff (quotes at para. 116 and 117, respectively) the ECJ) may not constitute the most adequate instrument to be applied by the ECJ in its effort to guarantee sufficient room for manoeuvre to the EU Commission in WTO negotiations. According to Eeckhout, a more appropriate tool could consist in the reduction of the intensity of judicial review in the EU. 61 It is submitted that the reason given by AG Kokott for her proposal of reducing the intensity of review (namely that WTO dispute settlement bodies ultimately have jurisdiction over questions of WTO law) is not fully convincing. It would amount to a type of 'inverted judicial subsidiarity', which is not practised in other constellations either: thus, one would hardly argue that the intensity of review of domestic tribunals for example in fundamental rights cases should be reduced in view of the 'ultimate jurisdiction' of an international specialized tribunal such as the European Court of Human Rights (that may -or may not -come into play ex post in a given case). Similarly, the mere existence of a dispute settlement system on the international level within the WTO framework does not per se justify reducing the intensity of review in cases decided in the EU. Furthermore, there is no guarantee that the WTO dispute settlement procedure will be triggered, later on, in a case that is being dealt with by the ECJ. By contrast, the reasons put forward by Eeckhout appear more persuasive, as they are connected not only to the prominent role of negotiations in WTO proceedings, but also to corresponding underlying questions of institutional balance between the EU's legislative, executive and judiciary. 62

E. Substantive legal assessment
Having examined Hungary's schedule of GATS commitments, 63 the ECJ found that Hungary had undertaken a full commitment regarding higher education services under the national treatment obligation contained in Article XVII of the GATS. Since Article XVII requires WTO Members not 61. P. Eeckhout, EU External Relations Law, p. 383. 62. Ibid., p. 383 points out that cases in which EU or national law is questioned on the basis of international agreements usually involve judicial review of general legislation. Since such judicial review is constitutional in nature, the institutional balance does not necessarily justify strict judicial review. 63. As mentioned above, the GATS' national treatment obligation (contained in Article XVII) and its market access obligation (Article XVI) function on the basis of a positive scheduling approach, according to which each WTO Member is required to specify in its country-specific schedule which commitments it undertakes under Articles XVI and XVII, respectively (see Article XX of the GATS). With respect to sectors where commitments are undertaken, each WTO Member's schedule must specify relevant terms, limitations and conditions on market access in one column, and conditions and qualifications on national treatment in a second column (see Article XX para. 1). A WTO Member's measures that are inconsistent with both Articles XVI and XVII shall be inscribed in that Member's column relating to Article XVI. In such a case, the inscription is considered to provide a condition or qualification to Article XVII as well (see Article XX para. 2). This rule is meant to simplify the scheduling approach of the GATS (see Case C-66/18 Commission v. Hungary, para. 107 with further references to WTO case law). In accordance with WTO panel jurisprudence, the ECJ found that 'it follows that a condition that is formally inscribed only under Article XVI of the GATS allows for derogation from the national treatment obligation only where the type of measures it introduces is inconsistent with both the obligation provided for in Article XVI and that provided for in Article XVII of the GATS' (see Case C-66/18 Commission v. Hungary, para. 107 (emphasis added), with further references to WTO case law).
Since Hungary had scheduled a condition relating to a requirement of prior licences that was meant to apply to all educational institutions, regardless of their origin, this condition was found by the ECJ not to contain any discriminatory element in the sense of Article XVII. Therefore, the rule laid down in Article XX para. 2 of the GATS was regarded, by the ECJ, as not applying in this case. Consequently, Hungary could not claim a derogation from the GATS' national treatment obligation (see Case C-66/18 Commission v. Hungary, para. 103 ff). For a detailed explanation of scheduling under the GATS that is also used by the ECJ in this case see WTO, Guidelines for the to modify the conditions of competition to the detriment of suppliers from third countries, it does not come as a surprise that the ECJ would find that Hungary's 'requirement of a prior treaty' constitutes a violation of GATS Article XVII. According to the ECJ, this breach could not be justified under Article XIV (the GATS's 'General Exceptions' clause that is structured in a manner similar to exception clauses such as Article 36 TFEU), given that the national measures were arbitrary and disproportionate. 64 The same holds true for Hungary's second measure, namely its requirement that the institution concerned provide education in the state where it has its seat. 65 Furthermore, regarding this second measure, the Court found violations of Article 49 TFEU (freedom of establishment) and Article 16 of the EU Services Directive. 66

F. Applicability of the EU Fundamental Rights Charter
Conspicuously, although the ECJ had thus found violations of EU law, it went on to examine whether the EU Fundamental Rights Charter is applicable in the concrete case, that is in a constellation in which a Member State is bound by obligations under an international agreement that has been concluded by the EU. 67 This essential question must be seen against the background of the ECJ's case law on the scope of application of EU fundamental rights. As is well known, the Court had found in ERT, namely already before the Charter came into existence, that Member States are bound by EU fundamental rights not only when they sensu stricto implement EU law (for example through the transposition of EU directives), but also when they try to justify restrictions of the fundamental freedoms of the EU internal market. 68 Since the Explanations of the Charter explicitly refer to the Court's former ERT case law, it is clear that Member States are also bound by their human rights obligations under the Charter, whenever they restrict internal market freedoms. 69 Further extending this broad approach of the scope of Charter rights, the Court has notably held, when interpreting the term 'implementing Union law' in Article 51(1) of the Charter in A˚kerberg, that Member States must respect the rights guaranteed by the Charter 'in all situations governed by EU law': in other words, '[t]he applicability of European Union law entails the applicability of the fundamental rights guaranteed by the Charter'. 70 The Court has arguably tried to attenuate this controversial far-reaching formula in later cases. Thus, it has clarified that the term 'implementing Union law' 'presupposes a degree of connection between the measure of EU law and the national measure at issue which goes beyond the matters covered being closely related or one of those matters having an indirect impact on the other'. 71 Consequently, 'the mere fact that a national measure comes within an area in which the European Union has powers cannot bring it within the scope of EU law, and, therefore, cannot render the Charter applicable'. 72 Despite these attempts at clarification, it has rightly been submitted that the Court's approach towards the scope of application of the Charter remains 'elusive' and that further elucidation in case law is necessary. 73 Arguably, the present case provides some additional clarity, given that the Court underlines that 'when the Member States are performing their obligations under [the GATS], they must be considered to be implementing EU law, within the meaning of Article 51(1) of the Charter'. 74 It is questionable, however, whether the reasoning of the Court, which consists of two short sentences only, 75 is fully convincing: it is difficult to see how a mere violation of a non-discrimination provision such as that contained in Article XVII of the GATS (or the attempt to justify such a violation) amounts to an 'implementation' of that provision. Hence, this judgment can arguably be regarded as an effort to transpose the Court's ERT-type case law, in which it had found that the attempt to justify restrictions of EU fundamental freedoms triggers the applicability of EU fundamental rights, from fundamental freedoms to international agreements. Alternatively, since the Court's reasoning is so terse, it could even be regarded a transposition of the ECJ's A˚kerberg approach to international agreements: in other words, similarly to A˚kerberg, the mere applicability of an international agreement concluded by the EU would then trigger the applicability of the Charter. Seen in this light, the ruling would stand in tension with the aforementioned attempts of the Court to clarify and restrict its contentious wide-ranging A˚kerberg jurisprudence.

Further implications of the judgment
One can of course read the Court's move of making the Charter applicable in cases where an EU Member State violates an international agreement concluded by the EU as an attempt to highlight that the state has not 'merely' violated obligations under a prima facie technical provision in an international trade agreement, but has also breached EU fundamental rights, such as academic freedom, that are foundational for an open society. Such a reading of the judgment indeed recalls that this case is yet another one in the sequence of enforcement actions of the Commission aiming to prevent that individual Member States undermine fundamental European values in some Member States.
Additionally, this ruling should also be seen in the broader context of measures restricting 'undesirable' investments. As mentioned above, in previous cases, the ECJ effectively has made it impossible for third-country investors to invoke the erga omnes effect of the EU fundamental freedom of free movement of capital, whenever the investor acquires definite influence in an undertaking in the EU. 76 Given that investors from third countries cannot invoke the freedom of establishment (as the latter is not equipped with an erga omnes effect), the obstacle erected by the ECJ vis-à-vis third-country investors constitutes a very effective -perhaps overly effective 77barrier.
To some extent this restrictive approach is mitigated by the ECJ in the present case, which makes it possible to scrutinize national measures against allegedly 'undesirable' third-country investments under the GATS and guarantees laid down in the EU Fundamental Rights Charter such as the freedom to conduct a business. 78 Nonetheless, it should be noted that this approach does not fully offset the lack of the applicability of the free movement of capital: if the free movement of capital were applicable in such cases, then this fundamental freedom (and its erga omnes effect) could be invoked by investors from third countries themselves. By contrast, the right to initiate infringement proceedings -in which the Charter is invoked in conjunction with an international agreement against a Member State -is restricted to the Commission and fellow Member States under Article 258. Even this hurdle could be overcome, however, if one severs the connection between the restriction of WTO/GATS law (which cannot be challenged by private persons due to the lack of direct effect of WTO law) and the violation of Charter rights: national measures giving rise both to violations of WTO law and the Charter could then arguably be challenged by investors invoking the Charter, since the latter is directly applicable. 79 Furthermore, since the applicability of an international agreement such as the GATS is regarded, by the ECJ, as prompting the applicability of the Charter, national measures restricting the GATS, which at the same time violate Charter rights, could give rise to state liability.
Finally, one should also reflect on the question, mentioned by way of introduction, in which the Advocate General asked the Court to consider whether infringement proceedings can serve as an instrument to enforce and increase the effectiveness of international trade law. 80 The degree to which WTO law can effectively be enforced on the regional level of the EU depends not least on the extent to which the ECJ is prepared to actually take into account relevant interpretations of the WTO dispute settlement bodies. Although the Court in the present case referred to WTO case law on the functioning of GATS schedules, it is conspicuous that it did not refer to other WTO rulings dealing with relevant substantive issues arising under the central GATS provision (Article XVII) in this case, such as the question of the 'likeness' of domestic and foreign services and providers of services (in fact, the ECJ disregarded this question altogether). Also, the fact that the Court recently seems to take less account of the jurisprudence of another prominent international court, the European Court of Human Rights, is not overly promising either. 81

Concluding remarks
The ruling in this case is noteworthy for several reasons. On the one hand, as regards the relationship between WTO law and EU law, the ECJ has confirmed its dichotomous approach of holding that EU Member States cannot bring cases challenging the legality of EU secondary law on the basis of WTO law, but may be sued in infringement proceedings, if their own national legal acts disregard WTO law. Furthermore, it transpires from the Court's reasoning in this case that it appears to conceive of itself as a court that -similar to a national court ensuring compliance with WTO law in the 'internal legal order' -is subordinated to the dispute settlement mechanisms of the WTO, rather than as a competing court on the international level. 82 On the other hand, this ruling is also remarkable as regards fundamental rights protection, since the ECJ has taken the view that -similarly to its controversial approach in A˚kerberg -the mere applicability of an international agreement concluded by the EU seems to trigger the applicability of the EU Charter of Fundamental Rights.
This approach of the ECJ is also highly relevant for the EU's policy of regulating foreign direct investments from third countries: to some extent, the ECJ's approach in the present case mitigates its restrictive stance in the scrutiny of 'undesirable' investments by third-country investors, since the Commission can invoke the GATS and, in conjunction with the latter, the Charter of Fundamental Rights in infringement proceedings against a Member State restricting such investments.
Moreover, it appears conceivable that national measures giving rise both to violations of WTO law and the Charter could be challenged by investors invoking the Charter themselves, as the latter is directly applicable. Finally, such cases could lead to state liability under the Charter.