The Court of Justice of the European Union (CJEU) has long held that EU migrants can make use of the rights deriving from the free movement of persons if they are in the state of which they are a national, i.e. if the situation is ‘purely internal’. However, there are some exceptions to this in certain circumstances. For example, in the case of returning citizens (member state nationals who, after exercising their free movement rights, wish to return to their home state with a third-country national spouse - see Case C-370/90 Singh). In these situations, so long as the individual has “genuine residence” in the host member state, this “…creates, on the Union citizen’s return to (the) state of origin, a derived right of residence, on the basis of Article 21(1) TFEU, for the third‑country national” (Case C-456/12 O & B, para. 56). For dual-nationals, however, the situation is less certain. In Case C-434/09 McCarthy the CJEU held that a derived right of residence cannot be obtained if the dual-national EU citizen in question has always resided in one member state and has never exercised their free movement rights.
A novel situation arose in the case of Case C-165/16 Toufik Lounes v Secretary of State for the Home Department, in which a Spanish citizen - Ms Ormazabal - obtained British nationality before marrying a third-country national spouse. Contrary to McCarthy, here it was undisputed that the EU citizen had obtained British nationality after genuinely exercising her free movement rights under the Citizens’ Rights Directive 2004/38.
The Court held that Ms Ormazabal’s acquisition of British nationality had changed the legal rules applicable to her. Since that time, she had been living in a member state of which she was a national, and therefore enjoyed an unconditional right to reside there (paras. 39 – 40). Her legal situation consequently meant she ceased to fall within the definition of ‘beneficiary’ under Art. 3(1) of the Directive, and as such Directive 2004/38 no longer applied to her from the moment she naturalised as a British citizen (paras. 41 – 42).
The Court then moved on to consider the case under Art. 21 TFEU. This provision can only confer a derived right of residence to a third-country national when it is necessary to ensure that the Union citizen in question can exercise his or her freedom of movement effectively, and that a refusal of such a right would interfere with the exercise and effectiveness of the right to move and reside freely throughout the Union (paras. 47 – 49). Denying this right would result in the EU Citizen being treated in the same way as someone who has never left the state of origin, which would disregard entirely the fact that they had clearly exercised their free movement rights by settling permanently in the host state (paras. 53 – 55). Art. 21(1) TFEU is designed inter alia to promote the gradual integration of the Union citizen concerned into the society of the host state, and EU citizens residing in accordance with Art. 7(1) or 16(1) of the Directive clearly intend to become permanently integrated in that state. Therefore, it would be “contrary to underlying logic of gradual integration” that EU citizens must forego these rights (particularly the right to family life) once adopting the nationality of that state (para. 58). In fact, their rights would actually be reduced in line with their increasing degree of integration in the society of that member state (paras. 59). EU citizens must be able to continue to enjoy these rights after they have acquired the nationality of that member state, and in particular must be able to build a family life with their spouse, by means of a derived right of residence. The conditions for granting that derived right of residence must not be stricter than those provided for in the Directive (paras. 60 – 61).
The Lounes decision clearly has one eye on the UK’s imminent exit from the European Union. Lounes limits the extent to which the UK can apply its own immigration rules to EU citizens who obtain British nationality post-Brexit. For British nationals, the UK imposes high earnings thresholds on those seeking family reunification with a third-country national spouse. Regulatory autonomy in the field of immigration is often said to be the most important factor explaining the decision of the UK electorate to vote to leave the European Union. But, given that any deal concluded by the UK and EU will provide for the continuation of the acquis of the Court of Justice beyond the formal date of departure in March 2019, this means that any EU national “genuinely residing” in the UK before the date of Brexit will be able to invoke the Lounes principle. That being said, it is difficult to see how the Court could Lounes in any other way. In fact, possibly a more problematic consequence would occur if the UK leaves without agreeing a deal. Could then a member state refuse family reunification in a situation in which a UK national has genuinely resided under Art.7 Dir. 2004/38 for a brief time before March 2019, if they subsequently decide years later to obtain the nationality of that state? Would the Lounes principle be applicable in such circumstances? Or would they be treated as a third-country national?
The Lounes decision can also be said to confirm the recent approach of the Court, whereby the conditions for residence contained in Directive 2004/38 are applied by analogy to Art. 21 TFEU, even when the Directive does not actually apply. The Court has applied this reasoning in the case of returning citizens. In O & B, the Court held that residence in conformity with Art. 7 or 16 of the Directive grants, on the citizen’s return to the Member State of origin, a derived right of residence on the basis of Art. 21(1) TFEU for the third-country national spouse who resided with them in the host-state, even though the Directive does not apply (paras. 56 – 57). More recently in Chavez-Vilchez, which concerned the claims for social assistance by third-country nationals who were mothers to one or more Dutch nationals, the Court held that, whilst the Directive does not cover such a situation, the conditions it lays down for residence should be applied by analogy (para. 55). The Directive can therefore be seen as laying down the exact criteria to be met by any individual seeking to rely on Art. 21 TFEU, regardless of whether it is actually applicable in the present case.
Finally, there is still a question over what would happen if nationality was acquired without the individual first exercising their free movement rights. For example, if nationality is acquired through parental lineage, rather than through an extended period of residence. The Court’s reasoning in Lounes suggests that they would be in the same legal situation as Ms McCarthy (a dual-national who hasn’t exercised their rights), rather than that of Ms Ormazaba.