Judgment of the General Court (Second Chamber, Extended Composition) of 8 July 2020 –

CA Consumer Finance v ECB

(Case T‑578/18)

(Economic and monetary policy – Prudential supervision of credit institutions – Article 18(1) of Regulation (EU) No 1024/2013 – Administrative pecuniary penalty imposed by the ECB on a credit institution – First subparagraph of Article 26(3) of Regulation (EU) No 575/2013 – Continued breach of capital requirements – Negligent breach – Rights of defence – Amount of the penalty – Obligation to state reasons)

1. EU law – Interpretation – Methods – Literal, systematic and teleological interpretation (see para. 42)

2. Economic and monetary policy – Economic policy – Supervision of the EU financial sector – Single supervisory mechanism – Prudential supervision of credit institutions – Obligation to obtain the permission of the competent authorities before classifying a capital instrument as a Category 1 instrument – Concept of permission of the competent authorities – Scope (European Parliament and Council Regulation No 575/2013, Art. 26(3)) (see paras 43-47, 52-57)

3. Action for annulment – Jurisdiction of the EU judicature – Interpretation of EU law – Guidance from an administrative authority – Binding nature – Absence (Art. 19 TEU) (see para. 59)

4. Economic and monetary policy – Economic policy – Supervision of the EU financial sector – Single supervisory mechanism – Prudential supervision of credit institutions – Continued breach of capital requirements – Negligent breach – Concept – Scope (European Parliament and Council Regulation No 575/2013, Art. 26(3); Council Regulation No 1024/2013, Art. 18(1)) (see paras 65-70, 74-81)

5. EU law – Principles – Rights of defence – Application to any procedure opened against any person likely to end in a measure adversely affecting him – Principle to be assured even in the absence of legislation governing the procedure in question (see para. 89)

6. Economic and monetary policy – Economic policy – Supervision of the EU financial sector – Single supervisory mechanism – Prudential supervision of credit institutions – Administrative pecuniary penalty imposed by the European Central Bank (ECB) – Statement of objections – Necessary content – Observance of the rights of the defence – Criteria for assessment (Council Regulation No 1024/2013, Art. 22(1); European Central Bank Regulation No 468/2014, Art. 126) (see paras 94-98)

7. Action for annulment – Pleas in law – Infringement of essential procedural requirements – Inadequate statement of reasons – To be considered of the Court’s own motion – Obligation to comply with the audi ateram partem principle (Arts 263 and 296 TFEU) (see paras 110, 111)

8. Economic and monetary policy – Economic policy – Supervision of the EU financial sector – Single supervisory mechanism – Prudential supervision of credit institutions – Administrative pecuniary penalty imposed by the European Central Bank (ECB) – Amount – Discretion enjoyed by the European Central Bank – Obligation to state reasons – Scope –– Decision which is insufficiently clear as to the methodology applied and the factors taken into consideration to determine the amount of the penalty – Regularisation during the proceedings – Not permissible – Insufficient statement of reasons (Art. 296 TFEU; Council Regulation No 1024/2013, Art. 18(1) and (3)) (see paras 116-126, 130-141)

Re:

Application under Article 263 TFEU for annulment of Decision ECB/SSM/2018-FRCAG-77 of the ECB of 16 July 2018, taken pursuant to Article 18(1) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63) and imposing on the applicant an administrative pecuniary penalty of EUR 200000 for continued breach of the capital requirements laid down in Article 26(3) of Regulation (EU) No 575/2013 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, and corrigenda OJ 2013 L 208, p. 68, and OJ 2013 L 321, p. 6).

Operative part

The Court:

1. Annuls Decision ECB/SSM/2018-FRCAG-77 of the European Central Bank (ECB) of 16 July 2018 in so far as it imposes on CA Consumer Finance an administrative pecuniary penalty of EUR 200000;

2. Dismisses the action as to the remainder;

3. Orders CA Consumer Finance to bear its own costs;