Judgment — ECLI:EU:C:2018:1023
Date: 2018-12-19
Language of the case: Italian
Court formation: Grand Chamber
Subject matter: Right of establishment;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Italy

summary, national courts cannot rule on purely preparatory acts adopted by NCAs as part of a composite procedure in which the decision lies exclusively with the ECB. Otherwise, the national courts would in practice undertake review of the substance of decisions that are a matter for the ECB rather than the NCAs; such a situation could, moreover, lead to paradoxical situations. (65) 111. Consequently, I believe that jurisdiction to review all acts adopted as part of a procedure to authorise acquisitions of and increases in qualifying holdings in banking institutions must be ascribed to the EU Courts rather than to national courts. 112. Naturally, this allocation of jurisdiction is not without difficulty. In order to safeguard the right of interested parties to an effective remedy, where this objection is raised before them the EU Courts will have to decide whether preparatory measures taken by NCAs that are subsequently adopted by the ECB contained defects that rendered them void in a way that has inevitably contaminated the entire procedure. 113. From this perspective, the question of whether the proposal by the Bank of Italy is unlawful should be examined by the General Court in the action for annulment brought against the ECB’s final decision (Case T‑913/16), because the ECB had discretion as to whether or not to adopt the proposal submitted by the NCA. 114. Moreover, this solution is also consistent with the provision in Article 4(3) of the SSM. (66) Under that provision, the ECB is entrusted with applying national law that transposes directives and, in exceptional cases, regulations that deal with the banking union, underpinning the extension of the jurisdiction of the Court of Justice to review such cases. (67) 115. On the basis of the above arguments, I believe that Article 263 TFEU: – confers on the Court of Justice exclusive jurisdiction to review the legality of measures adopted as part of the procedure provided for in Article 4(1)(c) and Article 15 of the SSM Regulation and Articles 85 to 87 of the SSM Framework Regulation; and – prevents national courts from reviewing the legality of decisions to initiate procedures, measures of inquiry and proposals adopted at national level by the national competent authority in the course of that procedure, which culminates in a binding decision by the ECB. D. Second question referred: impact of national judgments having the force of res judicata on the judicial review of national preparatory measures 116. The answer to the second question can be inferred logically from my recommended response to the first question. When one argues that the General Court and the Court of Justice have exclusive jurisdiction to carry out a judicial review of the measures adopted in these procedures, and that the national courts have no such jurisdiction, the fact that the national courts may be called on to make a ruling through the giudizio di ottemperanza or any other procedural mechanism of their domestic law is irrelevant. 117. Indeed, the conferral of jurisdiction is an essential prerequisite in order for subsequent court proceedings to be valid. If a court does not have jurisdiction, it simply cannot act, whatever the procedural route used. The giudizio de ottemperanza is one of those routes, through which Italian procedural law seeks to ensure that the final and binding nature of an earlier court decision is respected. (68) 118. Mr Berlusconi and Fininvest seek to avail themselves of this route, citing the judgment delivered on 3 March 2016 by the Consiglio di Stato (Council of State) as grounds for the nullity of the proposed decision forwarded to the ECB by the Bank of Italy during the authorisation procedure. But if, as I have already argued, the Italian courts lack jurisdiction to rule on the preparatory measures agreed by NCAs, that argument will have to be asserted before the General Court (as has happened in Case T‑913/16) rather than before the national courts. 119. Thus, in my opinion it is not possible to invoke the procedural autonomy of the Italian State as a ground for arguing that the (potential) res judicata effect of the judgment of 3 March 2016 confers jurisdiction on a national court to review the legality of the actions of the Bank of Italy in connection with the preparation of the final decision by the ECB. 120. I do not believe, therefore, that the Court of Justice should go any further and become involved in the as yet undecided issue of the impact of that judgment on this case. However, purely in the alternative, I shall explain why I believe that neither the parties to nor the subject matter of the proceedings resolved by the judgment of 3 March 2016 would be the same as those in the present proceedings (which is a requirement in order for res judicata to apply). 121. With regard to whether the subject matter is the same: – The previous action concerned decision No 976145/14 of 7 October 2014 of the Bank of Italy and IVASS, which held that Mr Berlusconi did not satisfy the reputation requirement for ownership of qualifying holdings in financial intermediaries. – The present proceedings concern the legality of the proposal put forward by the Bank of Italy (subsequently incorporated into the 2016 ECB Decision) opposing the acquisition of the qualifying holding in Banco Mediolanum achieved indirectly by Mr Berlusconi through Fininvest. The reason for that opposition lies in the sentence of four years’ imprisonment for tax fraud contained in a final judgment, referred to in the judgment by the Consiglio di Stato (Council of State). However, in reaching the conclusion that the requirement for the acquirers to be of good reputation was not satisfied, both the Bank of Italy and the ECB took other additional factors into account, some of which post-date the judgment of 3 March 2016. (69) 122. With regard to whether the parties are the same: – The ECB did not, and could not, take part in the proceedings that gave rise to the judgment of 3 March 2016, whereas it plays a key role in the present proceedings. – The 2016 ECB Decision notes that the acquirers do not satisfy the reputation requirement, which it says is true not only of the ‘controlling shareholder and indirect acquirer, Mr Berlusconi, but also of another member of the management board and a member of the supervisory board of Fininvest SpA, as well as Fininvest itself’. (70) 123. In addition, the acquisitions of qualifying holdings are different, the applicable legislation is different and the procedure has changed, with exclusive competence for the decision now resting with the ECB. 124. As neither the subject matter nor the parties in the proceedings resolved by the final judgment of the Consiglio di Stato (Council of State) of 3 March 2016 are the same as those in the present proceedings, it is hard to see how the principle of res judicata would apply. 125. Finally, in the alternative to the alternative, the principle of res judicata cannot be invoked in order to enforce judgments that are clearly contrary to the rules of EU law, (71) such as judgments that may interfere with the exclusive competence of the ECB to authorise acquisitions of qualifying holdings. IV. Conclusion 126. In accordance with the reasoning set out above, I suggest that the Court of Justice should reply as follows to the questions referred for a preliminary ruling by the Consiglio di Stato (Council of State, Italy): (1) Article 263 TFEU, read in conjunction with Article 4(1)(c) and Article 15 of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, and with Articles 85 to 87 of Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities: – confers on the Court of Justice of the European Union exclusive jurisdiction to review the legality of measures adopted in the course of the procedure provided for in the aforesaid articles of the two regulations for the purpose of authorising acquisitions of and increases in qualifying holdings in banking institutions; and – prevents national courts from reviewing the legality of decisions to initiate procedures, measures of inquiry and proposed decisions adopted by the competent national authorities as part of that procedure, in which the final decision is a matter for the European Central Bank. (2) The lack of jurisdiction of the national courts to review the legality of the measures adopted in the aforesaid procedure cannot be defeated by bringing an action for a declaration of invalidity (giudizio di ottemperanza) which invokes an alleged breach or circumvention of the res judicata effect of an earlier judgment of a national court. 1 Original language: Spanish. 2 Directive of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338) (known as CRD IV). 3 The agreements referred to as Basel III are a set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis and adopted internationally. They are designed to strengthen the regulation, supervision and risk management of the banking sector. See the information available on the website of the Basel Committee on Banking Supervision, https://www.bis.org/bcbs/basel3.htm. 4 Council Regulation of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63) (‘the SSM Regulation’). 5 Regulation of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (OJ 2014 L 141, p. 1). 6 Decreto legislativo 1 settembre 1993, n. 385, Testo unico delle leggi in materia bancaria e creditizia (Testo unico bancario) (Legislative Decree No 385 of 1 September 1993 relating to the consolidated text of the laws on banking and credit (‘the Consolidated Law on Banking’)). At the material time, the rules on qualifying holdings in financial institutions were set out in Title II of the Consolidated Law on Banking as amended by Legislative Decree No 72 of 12 May 2015, which incorporated the contents of CRD IV into Italian law. 7 Article 25(2) referred to future regulations (to be adopted by the Ministero dell’Economia e delle Finanze (Ministry of Economic and Financial Affairs), following an opinion issued by the Bank of Italy) which would specifically determine these requirements, but the legislation has not been drafted. 8 Decreto 18 marzo 1998, n. 144, regolamento recante norme per l’individuazione dei requisiti di onorabilità dei partecipanti al capitale sociale delle banche e fissazione della soglia rilevante (Ministerial Decree No 144 of 18 March 1998 laying down rules for the identification of the requirements of good reputation for holders of the share capital of banks and the fixing of the relevant threshold, ‘Decree No 144 of 1998’). 9 Legge 7 agosto 1990, n. 241, nuove norme in materia di procedimento amministrativo e di diritto di acceso ai documenti amministrativi, come modificata dalla legge 11 febbraio 2005, n. 15 (Law No 241 of 7 August 1990 concerning new provisions on administrative procedure and the right of access to administrative documents, as amended by Law No 15 of 11 February 2005). 10 Codice del processo amministrativo, decreto legislativo 2 luglio 2010, n. 104 (Code of Administrative Procedure, Legislative Decree No 104 of 2 July 2010). 11 Decreto Legislativo 4 de marzo 2014, n. 53, attuazione della direttiva 2011/89/UE (Legislative Decree No 53 of 4 March 2014 transposing Directive 2011/89/EU [of the European Parliament and of the Council of 16 November 2011 amending Directives 98/78/EC, 2002/87/EC, 2006/48/EC and 2009/138/EC as regards the supplementary supervision of financial entities in a financial conglomerate) (OJ 2011 L 136, p. 113]), which extended the application of the reputation requirements applicable to senior managers of banking institutions so as to cover mixed financial holding companies. 12 This involved an ‘intra-group merger with a one-for-one share swap’, the objective being corporate simplification and organisational rationalisation of the banking group, given that Banca Mediolanum was wholly owned by Mediolanum. 13 Fininvest acquired control of approximately 30.124% of the capital of Banco Mediolanum but exercised effective control over only 9.999%, given that voting rights in the remaining 20.125% had been suspended and the Bank of Italy had ordered these shares to be sold. 14 Regarding the objection of lack of standing to bring proceedings, raised by the Bank of Italy, the Consiglio di Stato (Council of State) held that the written notice of 23 July 2015 was merely confirmatory, in that it expanded on the asset disposal requirement that had previously been ordered in respect of the shares in Mediolanum, with no separate new assessment. It followed that any annulment of the decision confirmed would automatically entail the lapse of the confirmatory measure. 15 Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007 amending Council Directive 92/49/EEC and Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of holdings in the financial sector (OJ 2007 L 247, p. 1). 16 The Consiglio di Stato (Council of State) held that the regulations had not been implicitly repealed as a result of Directive 2007/44. In order for implied repeal to occur, the situations governed by the rules in question must be the same; but in this case the rules applied to different situations: the EU rule applied to the acquisition of a holding, whereas Decree No 144 of 1998 referred to holdings previously acquired and thus already held. 17 ECB/SSM/20016-7LVZJ6XRIE7VNZ4UBX81/4 (‘the 2016 ECB Decision’). 18 Fininvest and Berlusconi v ECB (T‑913/16). 19 Judgments of 3 December 1992, Oleificio Borelli v Commission (C‑97/91, EU:C:1992:491), paragraph 9; of 25 January 2007, Dalmine v Commission (C‑407/04 P, EU:C:2007:53), paragraph 62; of 18 December 2007, Sweden v Commission (C‑64/05 P, EU:C:2007/802), paragraph 91; and of 17 September 2014, Liivimaa Lihaveis (C‑562/12, EU:C:2014:2229), paragraph 48. 20 These types of procedures involve what is known in the literature as coadministration or integrated administration. See Ziller, J., ‘Les concepts d’administration directe, d’administration indirecte et de coadministration et les fondements du droit administratif européen’, in Auby, J.‑B., and Dutheil de la Rochère, J. (ed.), Traité de Droit Administratif Européen, Bruylant, Brussels, 2014, p. 327 et seq.; Hofmann, H.C.H., ‘Conclusions: Europe’s integrated administration’, in Hofmann, H.C.H., and Türk, A. (ed.), EU Administrative Governance, p. 583; Schmidt-Aßmann, E., ‘Introduction’, in Jansen, O., and Schöndorf-Haubold, B. (ed.), The European Composite Administration, Intersentia, Brussels, 2011, pp. 6 to 8. 21 An ambitious proposal in legal literature for codifying EU administrative procedures is to be found in Mir, O., Hofmann, H.C.H., Schneider, J.-P., Ziller, J., et al. (ed.), Código ReNEUAL de procedimiento administrativo de la Unión Europea, INAP, Madrid, 2015. Article I‑4(4) of the ReNEUAL Code defines the ‘composite procedure’ as an administrative procedure in which the EU authorities and the authorities of one or more Member States are assigned different, but interdependent, functions. A procedure which combines two directly related administrative procedures is also classed as a composite procedure. 22 Alonso de León, S., Composite administrative procedures in the European Union, Iustel, Madrid, 2017; Della Cananea, G., ‘I procedimenti amministrativi composti dell’Unione europea’, in Bignami, F. and Cassese, S., (ed.), Il procedimento amministrativo nel diritto europeo, Milano, Giuffrè, 2004; Mastrodonato, G., I procedimenti amministrativi composti nel diritto comunitario, Bari, Cacucci, 2007; Hofmann, H.C.H., ‘Composite decision-making procedures in EU administrative law’, in Hofmann, H.C.H., Türk, A., Legal Challenges in EU Administrative Law. Towards an Integrated Administration, Edward Elgar, Cheltenham, 2009, p. 136. 23 A recent study can be found in Brito Bastos, F., ‘Derivative illegality in European composite administrative procedures’, Common Market Law Review, 2018, No 1, pp. 101 to 134. 24 Alonso de León, S., Composite administrative procedures in the European Union, Iustel, Madrid, 2017, pp. 273 to 318. See also the studies by Eliantonio, M., ‘Judicial Review in an Integrated Administration: the Case of “Composite Procedures”’, Review of European Administrative Law, 2014 No 2, pp. 65 to 102; and de Türk, A., ‘Judicial Review of integrated administration in the EU’, in Hofmann, H.C.H., and Türk, A., Legal Challenges in EU Administrative Law. Towards an Integrated Administration, Edward Elgar, Cheltenham, 2009, pp. 218 to 256, especially pp. 222 to 224. 25 See Prechal, S., Widdershoven, R., Jans, J., ‘Introduction’, in Jans, J., Prechal, S., Widdershoven, R. (ed.), Europeanisation of Public Law, Europa Law Publishing, Amsterdam, 2015, p. 33. 26 Judgment of 22 October 1987, Foto-Frost (314/85, EU:C:1987:452), paragraphs 14 and 15. See also judgments of 10 January 2006, IATA and ELFAA (C‑344/04, EU:C:2006:10), paragraphs 27 and 30, and of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council (C‑583/11 P, EU:C:2013:625), paragraph 95. 27 Judgment of 3 December 1992, (C‑97/91, the ‘Borelli judgment’, EU:C:1992:491). 28 Borelli judgment, paragraphs 9 to 12, and order of the President of the Court of 13 January 2009, Occhetto and European Parliament v Donnici (C‑512/07 P(R) and C‑15/08 P(R), EU:C:2009:3), paragraph 50. 29 Borelli judgment, paragraph 13. According to the judgment, the national court should regard an action brought in such a case as admissible even if the domestic rules of procedure do not provide for this. 30 Judgment of 17 September 2014 (C‑562/12, EU:C:2014:2229), paragraph 56. 31 Council Regulation of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJ 2006 L 210, p. 25). 32 The Court of Justice held that ‘Regulation No 1083/2006, read in conjunction with Article 47 of the Charter, must be interpreted as precluding a provision of a programme manual adopted by a monitoring committee in the context of an operational programme established by two Member States and intended to promote European territorial cooperation where that provision does not provide that a decision of that monitoring committee rejecting an application for aid can be subject to appeal before a court of a Member State’ (judgment of 17 September 2014, Liivimaa Lihaveis, C‑562/12, EU:C:2014:2229, paragraph 76). 33 Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (OJ 1992 L 208, p. 1) introduced a composite procedure in which producer associations submit applications for registration of a PDO or PGI to their national authorities. Those authorities must check that the application is justified and, if they consider that the requirements of the regulation are met, they must forward the application to the Commission, which will merely conduct a formal examination in order to verify whether the requirements are satisfied. 34 Judgment of 6 December 2001 (C‑269/99, EU:C:2001:659), paragraphs 57 and 58. See also judgment of 2 July 2009, Bavaria and Bavaria Italia (C‑343/07, EU:C:2009:415), paragraphs 55 to 57. 35 The case involved registration of the designation ‘Spreewälder Gurken’, which was carried out in accordance with Commission Regulation (EC) No 590/1999 of 18 March 1999 supplementing the Annex to Regulation (EC) No 1107/96 on the registration of geographical indications and designations of origin under the procedure laid down in Article 17 of Regulation (EEC) No 2081/92 (OJ 1999 L 74, p. 8). 36 Judgment of 6 December 2001, Carl Kühne and Others (C‑269/99, EU:C:2001:659), paragraphs 57 and 58. On this point, see also judgment of 2 July 2009, Bavaria and Bavaria Italia (C‑343/07, EU:C:2009:415), paragraphs 64 to 67. 37 This is what occurred in the case of the declarations by the Italian Electoral Office that were the subject of the judgment of 30 April 2009, Italy and Donnici v Parliament (C‑393/07 and C‑9/08, EU:C:2009:275), paragraphs 74 and 75, and of the order of the President of the Court of 13 January 2009, Occhetto and Parliament v Donnici (C‑512/07 P(R) and C‑15/08 P(R), EU:C:2009:3). By declaring — contrary to that declaration — Mr Donnici’s mandate invalid and by ratifying Mr Occhetto’s mandate, the contested decision infringed Article 12 of that act. 38 Judgments of 11 November 1981, IBM v Commission (60/81, EU:C:1981:264), paragraph 12, and of 13 October 2011, Deutsche Post and Germany v Commission (C‑463/10 P and C‑475/10 P, EU:C:2011:656). 39 Judgment of 17 October 1995 (C‑478/93, EU:C:1995:324), paragraphs 34 to 40. 40 Member States had been given no powers, either by the Council or by the Commission, to take decisions in regard to management of the import quota, but were required to assume a number of technical functions on behalf of and subject to the control of the Commission (such as drawing up the list of operators and the average quantities of bananas that each operator had sold over the three most recent years for which figures were available). The role of the Member States in the collection and transmission of information could not, however, prevent the Commission, which was required to ensure the daily management of the common organisation of the markets, from checking the accuracy of that information and revising it if there was a danger that the double counting of quantities might distort the basis of the import system. 41 Judgment of 21 March 2000 (C‑6/99, EU:C:2000:148). 42 Council Directive 90/220/EEC of 23 April 1990 on the deliberate release into the environment of genetically modified organisms (OJ 1990 L 117, p. 15), as amended by Commission Directive 97/35/EC of 18 June 1997 adapting to technical progress for the second time Directive 90/220 (OJ 1997 L 169, p. 72). In order to obtain authorisation for genetically modified seeds, an application had to be submitted to the competent national authority. Once the competent national authority had examined the impact on human health and the environment, it forwarded the application to the Commission with a favourable opinion. The Commission, in turn, notified all Member States of the application to enable them to raise objections. If the Commission took a ‘favourable decision’ under Article 13(4) of the directive, the competent authority had to issue the ‘written consent’ enabling the product to be marketed. 43 Judgment of 21 March 2000, Greenpeace France and Others (C‑6/99, EU:C:2000:148), paragraph 57. 44 Judgment of 18 December 2007 (C‑64/05 P, EU:C:2007:802). 45 Regulation (EC) of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (OJ 2001 L 145, p. 43). 46 Judgment of 18 December 2007, Sweden v Commission (C‑64/05 P, EU:C:2007:802), paragraph 94; see also order of the President of the Court of 13 January 2009, Occhetto and Parliament v Donnici (C‑512/07 P(R) and C‑15/08 P(R), EU:C:2009:3), paragraph 53. 47 Regulation of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1). 48 Article 22 of CRD IV treats in the same way the acquisition of a qualifying holding and an increase, whether direct or indirect, in a qualifying holding as a result of which the proportion of the voting rights or of the capital held would reach or exceed 20%, 30% or 50% or the credit institution would become the acquirer’s subsidiary. 49 These are: the reputation of the proposed acquirer; the reputation and experience of the proposed new members of the senior management; the financial soundness of the proposed acquirer; influence over the institution; and the risk of links with money laundering or terrorist funding activities. 50 Joint guidelines by the EBA, EIOPA and ESMA on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (JC/GL/2016/01), pp. 21 to 31. The various language versions are available on the website of the Joint Committee of the European Supervisory Authorities at https://esas-joint-committee.europa.eu/Pages/Guidelines/Joint-Guidelines-on-the-prudential-assessment-of-acquisitions-and-increases-of-qualifying-holdings-in-the-banking,-insuranc.aspx. 51 Regulation (EU) of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ 2010 L 331, p. 12; ‘the EBA Regulation’). 52 The second subparagraph of Article 16(3) of the EBA Regulation provides that ‘within 2 months of the issuance of a guideline or recommendation, each competent authority shall confirm whether it complies or intends to comply with that guideline or recommendation. In the event that a competent authority does not comply or does not intend to comply, it shall inform the Authority, stating its reasons’. 53 ECB, Guide to banking supervision, 2014, pp. 27 to 30. 54 In the present case, the ECB altered some paragraphs in the draft decision submitted by the Bank of Italy, in response to comments made by Fininvest at the hearing before the ECB. This is evidence, if any were needed, of the independence of the ECB when it is required to take a final decision in this type of procedure. 55 On this point, see Lackhoff, K., Single Supervisory Mechanism. A Practitioner’s Guide, Beck, Hart, Nomos, Munich, 2017, p. 172: the procedure for authorising qualifying holdings ‘does not consist in a two-step procedure (with a national and an ECB part) as the authorisation procedure but is in its entirety an ECB supervisory procedure’. 56 Decision of the European Central Bank of 14 April 2014 concerning the establishment of an Administrative Board of Review and its Operating Rules (OJ 2014 L 175, p. 47). On the operation of this internal administrative review body, see Brescia Morra, C., Smits, R. and Magliari, A., ‘The Administrative Board of Review of the European Central Bank: Experience After 2 Years’, European Business Organisation Law Review, 2017, pp. 567 to 589. 57 At the hearing, the ECB confirmed that this is not what usually happens. 58 The draft decision by the NCA is always submitted to the ECB in English, as this is the language used in communications between the NCAs and the ECB within the SSM (Article 23 of the SSM Framework Regulation). In contrast, the final decision by the ECB is translated into the language of the applicant. 59 This provision states that ‘if the applicant complies with all conditions of authorisation set out in the relevant national law of … the Member State, the national competent authority shall take, within the period provided for by relevant national law, a draft decision to propose to the ECB to grant the authorisation. The draft decision shall be notified to the ECB and the applicant for authorisation. In other cases, the national competent authority shall reject the application for authorisation.’ 60 The exact wording of the provision is as follows: ‘To the extent necessary to carry out the tasks conferred on it by this Regulation, the ECB may require, by way of instructions, those national authorities to make use of their powers, under and in accordance with the conditions set out in national law, where this Regulation does not confer such powers on the ECB. Those national authorities shall fully inform the ECB about the exercise of those powers.’ 61 See the analyses by Chiti, E., and Recine, F., ‘The Single Supervisory Mechanism in Action: Institutional Adjustment and the Reinforcement of the ECB Position’, European Public Law, 2018, No 24, pp. 103 to 108, and by Lamandini, M., and Ramos Muñoz, D., EU Financial Law, CEDAM Legal Studies, Wolters Kluwer, 2016, pp. 183 to 212. 62 The General Court has drawn attention to this idea in its judgment of 16 May 2017, Landeskreditbank Baden-Württemberg v ECB (T‑122/15, EU:T:2017:337), paragraph 54, against which an appeal is pending (Case C‑450/17 P). See the commentaries by D’Ambrosio, R., and Lamandini, M., ‘La “prima volta” del Tribunale dell’Unione europea in materia di Meccanismo di Vigilanza Unico’, Giurisprudenza commerciale, 2017, pp. 594 to 599, and by Adalid, S., ‘Le MSU, nouveau sous-système de droit de l’Union européenne’, Revue des affaires européennes, 2017, No 2, pp. 373 to 370. 63 Judgment of 18 December 2007, Sweden v Commission (C‑64/05 P, EU:C:2007:802), paragraphs 93 and 94; see also order of the President of the Court of 13 January 2009, Occhetto and European Parliament v Donnici (C‑512/07 P(R) and C‑15/08 P(R), EU:C:2009:3), paragraph 53. 64 See, in particular, the judgments of 11 November 1981, IBM v Commission (60/81, EU:C:1981:264), paragraphs 9 and 10; of 9 September 2015, Lito Maieftiko Gynaikologiko kai Cheirourgiko Kentro v Commission (C‑506/13 P, EU:C:2015:562, paragraph 16); and of 20 September 2016, de Mallis and Others v Commission and ECB (C‑105/15 P to C‑109/15 P, EU:C:2016:702), paragraph 51. 65 In the case of a preparatory act by the NCA that had the same content as the ECB decision, the judgments of the national court and the Court of Justice could diverge. That situation would arise in the present case if there were to be a judgment of the Italian court and a separate judgment by the General Court that reached contradictory conclusions. 66 The wording of this provision is as follows: ‘For the purpose of carrying out the tasks conferred on it by this Regulation, and with the objective of ensuring high standards of supervision, the ECB shall apply all relevant Union law, and where this Union law is composed of Directives, the national legislation transposing those Directives. Where the relevant Union law is composed of Regulations and where currently those Regulations explicitly grant options for Member States, the ECB shall apply also the national legislation exercising those options.’ 67 Even in areas of banking supervision that are regulated by rules of Member States’ domestic law that are not explicitly mentioned in EU law, the ECB considers it has competence to exercise supervisory functions and it effects a detailed application of national rules. This is set out in a letter to the NCAs: ECB, Additional clarification regarding the ECB’s competence to exercise supervisory powers granted under national law, letter SSM/2017/0140 of 31 March 2017 (available at https://www.bankingsupervision.europa.eu/banking/letterstobanks/shared/pdf/2017/Letter_to_SI_Entry_point_information_letter.pdf?abdf436e51b6ba34d4c53334f0197612). See the commentaries by Smits, R., ‘Competences and alignment in an emerging future. After L-Bank: how the Eurosystem and the Single Supervisory Mechanism may develop’, ADEMU Working Papers Series 2017/077, pp. 16 to 24. 68 As the Commission noted during the hearing, in response to the resolute defence of the unique nature of this Italian procedural instrument mounted by Mr Berlusconi’s lawyers, the fact is that many Member States have legal mechanisms that seek to preserve the final and binding nature of court rulings. 69 In point 2.2.1 of its 2016 decision, the ECB took into account the criminal or sanctioning procedures that had been commenced or in which judgments — some final, some not — had been given against Ubaldo Livolsi, Ferdinando Superti Furga and Silvio Berlusconi, and against Fininvest, as the basis for stating that the acquirers of the qualifying holding did not satisfy the requirement to be of good reputation under the rules of Italian and EU law, applied in accordance with the Joint guidelines by the EBA, EIOPA and ESMA on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector. 70 The final part of point 2.2.2 of the 2016 ECB Decision. 71 In the judgment of 18 July 2007, Lucchini (C-119/05, EU:C:2007:434), the Court of Justice ruled, in essence, that EU law precludes the application of a provision of national law, such as Article 2909 of the Italian Civil Code, which seeks to lay down the principle of res judicata in so far as the application of that provision prevents the recovery of State aid granted in breach of EU law which has been found to be incompatible with the common market in a decision of the European Commission which has become final (judgments of 3 September 2009, Fallimento Olimpiclub, C‑2/08, EU:C:2009:506, paragraph 25; of 10 July 2014, Impresa Pizzarotti, C‑213/13, EU:C:2014:2067, paragraph 61; and of 11 November 2015, Klausner Holz Niedersachsen, C‑505/14, EU:C:2015:742, paragraph 45).