Source: http://eulawanalysis.blogspot.be/2016_09_01_archive.html
Timestamp: 2017-10-23 04:15:31
Document Index: 497934571

Matched Legal Cases: ['Art. 6', 'Art. 3', 'Art. 295', 'Art. 240', 'CJEU ', 'Art. 218', 'Art. 10', 'CJEU ', '§118', '§122', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'Art 19', 'Art 24', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ']

EU Law Analysis: September 2016
‘Inside’ the European Parliament’s Closed Reading Rooms: Transparency in the EU
Dr Vigjilenca Abazi
Assistant Professor of European Law
What do documents about negotiations of the Transatlantic Trade and Investment Partnership (TTIP), oversight of the EU’s Food Safety Authority or Tax-Justice have in common? In order to access these documents, (selected) Members of the European Parliament are requested to attend closed reading rooms. This blog post discusses how an exception to open parliamentary oversight is increasingly becoming a regular institutional practice and questions its spillover effect on requests for public access to documents.
As the wording suggests, ‘closed reading rooms’ are meetings that take place behind closed doors with the purpose of reading certain sensitive documents, particularly EU official secrets. Documents are distributed at the beginning of the meeting and collected again at the end; documents may not be copied by any means, such as photocopying or photographing; no notes may be taken; and the minutes of the meeting cannot make any mention of the discussion of the item containing official secrets (Art. 6, Interinstitutional Agreement between the European Parliament and the Council of 12 March 2014).
Closed reading rooms are an exception to generally open meetings and discussions of the European Parliament. This practice emerged with the introduction of rules on EU official secrets and specifically the Interinstitutional Agreement of 2002 between the European Parliament and the Council concerning European Parliament’s access to sensitive information in the field of security and defence policy (see Art. 3 and Annex, second paragraph). The rationale of what this Agreement called ‘secured room’ was to make sensitive documents available for purposes of parliamentary oversight without ‘risks’ of public disclosure or possible leaks, i.e. unauthorised disclosure of documents.
Initially, this practice was mostly confined to the area of security and defence for documents classified as official secrets. Yet, with the expansion of rules on EU official secrets to areas well beyond security and defence to ‘activities in all areas that require handling classified information’ via a Council Decision on official secrets in 2013, the use of closed reading rooms by MEPs to access sensitive documents became an increasing practice.
Closed Oversight
At first glance, closed reading rooms, or more generally ‘closed oversight’ (as I have elaborated in-depth in this recent article), might seem an inevitable institutional practice when dealing with official secrets and certainly this is not an issue confined to the EU, but a much wider world practice of oversight (e.g. see here for a recent report). Yet, the following salient questions arise:
Is it possible to keep account of closed oversight?
Accountability does not stop with executive institutions. It is equally important that oversight actors, such as the European Parliament, have appropriate institutionalised processes of keeping track of documents that have been reviewed, that meeting minutes reflect at least in some broad sense what has been discussed when official secrets are involved, or any other means that leave a traceable mark of institutional oversight having taken place. As the current procedure of getting access to official secrets stands (see above section on ‘background), it seems that keeping (some sort of public) track of the oversight process is deeply challenging.
To what extent intra/inter institutional rules alter primary law oversight architecture?
Another disconcerting aspect to closed oversight is the way it has been developed, i.e. mostly through rules of procedure and inter-institutional agreements. Indeed, EU institutions in line with primary law have clear prerogatives to make arrangements for their cooperation and to set out their rules of procedure (see respectively Art. 295 TFEU, Art. 240(3) TFEU). However, it remains to be more critically discussed whether this route of designing how oversight will take place in practice follows the constitutional principle of openness in the EU in full spirit and to what extent it alters the process of oversight in EU.
Does recent case law offer insights on closed oversight?
In a series of recent cases, the CJEU has clarified the relevance, scope and procedural aspects of institutional access to information by the European Parliament in the context of international negotiations (see previous EU Law Analysis blogs here and here). However, case law does not address the manner in which these documents should be read and importantly, primary law only refers that accessibility to information is ‘immediately and fully’ (see Art. 218(10) TFEU) with no further details as to how access ought to be organised.
What about public deliberation?
A crucial role for the European Parliament as the direct representative of citizens (Art. 10 TEU) is to provide a link between what takes place in Brussels and what citizens know. But actively creating space for public deliberation and prompting public debate on issues that are overseen behind closed doors remain yet to be delivered by the European Parliament.
Spillover Effect Even to Public Access to Information?
Recently four MEPs filed a public access request to the European Food Safety Authority to gain access to unpublished studies determining the carcinogenicity of glyphosate on basis of which EFSA made its assessments. EFSA was not immediately open to provide public access to these studies. Remarkably, in its response, EFSA offers a ‘physical reading room’ for the MEPs to read these studies and reasons that the owners of these studies seem open to sharing the studies in this manner.
In other words, the EFSA is offering the MEPs a closed room to read the studies as a response to a public access request that should result in making the documents public, not only for these four MEPs but also for the general public. It should be stressed that the EU public access to documents regime does not foresee ‘physical reading rooms’ and indeed that would be contrary even to its rationale of granting the widest possible public access to documents. It seems that in the eyes of EFSA, a closed reading room offers a ‘solution’ to the potential unwillingness of the authors of these studies to disclose the documents. Yet, this possibility is also completely outside the legal contours of public access to information. Legally, authors of these studies do not have a veto on whether the studies would be public and certainly do not have prerogatives to decide how public access to documents should be organised in practice.
The EFSA response is ongoing and the four MEPs have still not received access to all requested documents. Yet, beyond this case, is the practice of closed reading rooms expanding not only to institutional access but also to public access to documents? This is a issue that we should continue to examine more closely.
Barnard & Peers: chapter 8
Posted by Steve Peers at 07:25 No comments:
Labels: access to documents, European Parliament, food safety, openness, transparency, TTIP
Maria Haag, PhD Researcher, European University Institute (Florence, Italy) & Michigan Grotius Research Scholar, University of Michigan Law School (Ann Arbor, Michigan)
Five years ago, the CJEU delivered its infamous Grand Chamber decision in C-34/09 Ruiz Zambrano. It held that “Article 20 TFEU precludes national measures which have the effect of depriving citizens of the Union of the genuine enjoyment of the substance of the rights conferred by virtue of their status as citizens of the Union” (para 42, emphasis added). This 'genuine enjoyment'-protection had two consequences. First, Union citizens could rely on Article 20 TFEU against their Member State of nationality without having previously made use of their rights to free movement and thus bypassing the Court's general lack of jurisdiction in 'purely internal' situations. Secondly, Member States were precluded from denying a right of residence to third-country national ('TCN') parents or caretakers of minor citizens of that Member State, as these children would otherwise be forced to leave the territory of the EU and thus no longer able to make use of the rights granted by Union citizenship.
Shortly after the delivery of this ground-breaking judgment, the Court of Justice proceeded to interpret Ruiz Zambrano very narrowly in a series of cases (C-434/09 McCarthy, C-256/11 Dereci and Others, C-40/11 Iida, C-356&357/11 O. and S., C-87/12 Ymeraga and Others, C‑86/12 Alokpa and Moudoulou and C-115/15 NA) leading many to wonder about the original significance of the Ruiz Zambrano decision. In contrast to Ruiz Zambrano, these subsequent cases mostly concerned the significance of Article 20 TFEU in a host Member State. The Court held that the applicants fell outside the scope of Article 20, even if they had never moved to another Member State, i.e. had been born in a Member State other than their Member State of nationality and had never left. The most recent cases – C-304/14 CS and C-165/14 Rendón Marín – however, Ruiz Zambrano decision, fully address the right under Article 20 TFEU in the home Member State. On the 13th of September 2016, the Grand Chamber delivered these two decisions in which it considered the effect of a criminal record of a TCN parent on his or her derived residence right under Article 20 TFEU and to what extent this right can be derogated on grounds of public policy or public security.
The case in CS concerned a Moroccan national, who resided in the UK together with her British national son. In 2012, she was convicted of a criminal offence and given a prison sentence of 12 months. Following her conviction, she was notified of her deportation liability. Her subsequent application for asylum was denied. Upon her appeal, the First-tier Tribunal (Immigration and Asylum Chamber) found that her deportation would violate her child's rights under Article 20 TFEU. The Home Secretary was granted permission to appeal this decision before the Upper Tribunal, which asked the CJEU, under which circumstances the expulsion of a TCN caretaker of a Union citizen could be permitted under EU law and whether Article 27 and 28 of the Directive 2004/38 (the ‘citizens’ Directive’, which sets out the main rules on EU citizens who move to another Member State) had any effect in this case.
The Court first firmly restated its holding in Ruiz Zambrano. It explained that Article 20 TFEU "precludes national measures which have the effect of depriving Union citizens of the genuine enjoyment of the substance of the rights conferred by virtue of their status as Union citizens" (para 26; citing Ruiz Zambrano para 42). Furthermore, this means that "a right of residence must … be granted to a third-country national who is a family member of [a minor Union citizen] since the effectiveness of citizenship of the Union would otherwise be undermined, if, as a consequence of refusal of such a right that citizen would be obliged in practice to leave the territory of the European Union as whole" (para 29). CS thus had a derived right of residence under Article 20 TFEU in her son's home Member State.
Secondly, the Court held that, as a general rule, such a derived residence right can be derogated for reasons of public policy or public security: "where the exclusion decision is founded on the existence of a genuine, present and sufficiently serious threat to the requirements of public policy or of public security … that decision could be consistent with EU law" (para 40, emphasis added). However, a deportation decision cannot be made "automatically on the basis solely of the criminal record of the person concerned" (para 41). Thus the UK legislation at issue, which obliges the Home Secretary to make a deportation order of any non-national who is sentenced to a period of imprisonment of 12 months or more, establishes "a systematic and automatic link between the criminal conviction of a person … and the expulsion measure" (para 44) and therefore violates EU law. Instead, it is for the national courts to weigh up "the personal conduct of the individual concerned, the length and legality of his residence on the territory of the Member State concerned, the nature and gravity of the offence committed, the extent to which the person concerned is currently a danger to society, the age of the child at issue and his state of health, as well as his economic and family situation" (para 42, emphasis added).
Furthermore, derogations for reasons of 'public policy' or 'public security' must be interpreted strictly and decisions are subject to review by the EU institutions (para 37). Lastly, and most notably, the assessment of the individual situation must take account of the principle of proportionality and the rights protected in the Charter of Fundamental Rights of the European Union ('CFREU'), especially Article 7 on the right to respect of private and family life and Article 24(2) on the obligation of consideration of the child's best interests (paras 48 and 49).
The facts in Rendón Marín are very similar to the ones in CS and essentially raise the same question, presumably why the Court decided these cases on the same day and why Advocate General Szpunar did not give separate opinions in these cases, but combined the two. Rendón Marín concerned a Colombian national father, who lived in Spain together with his Spanish national son and his Polish national daughter. His application for a residence permit was rejected due to his criminal record. The crucial difference between the facts of the two cases is that Mr Rendón Marín has a Union citizen daughter who lives in a host Member State and a son who lives in his home Member State. There thus exists a cross-border element in the situation of his daughter, but not in his son's (For further discussion on the cross-border element, see C-200/02 Zhu and Chen, especially para 19.).
The part of the Court's decision concerning the son's circumstances – a Spanish national in Spain – is almost identical to the Court's judgment in CS. In fact, some of the paragraphs can be found in exactly the same wording in both decisions (the two cases also had the same rapporteur, Allan Rosas). Interestingly, the Court in Rendón Marín mentioned the possibility of moving to Poland, as this is the Member State of nationality of Mr Rendón Marín's daughter. Whilst the Court noted the applicant's objection that the family had no ties to Poland, it did not go into this discussion. (See, in contrast, footnote 109 in Advocate General Szpunar's Opinion in CS and Rendón Marín. For more on this, see also Advocate General Wathelet's Opinion in NA, paras 112-117.) Here the Court simply holds that "it is for the referring court to check whether … the parent who is the sole carer of his children, may in fact enjoy the derived right to go with them to Poland and reside with them there" (para 79, citing Alokpa and Moudoulou paras 34-35). The Court therefore did not deny that moving to Poland could be a possible solution in case of the father's deportation from Spain.
As for the legal status of the daughter, the Court held that, as a Polish national and Union citizen, she could rely on Article 21 TFEU and the Directive 2004/38 to grant her a right of residence in Spain (para 44). Furthermore, the Court stated that if the daughter fulfils the conditions laid down under Article 7(1) Directive 2004/38 (i.e. having sufficient resources and comprehensive health insurance) then the derived right of residence of Mr Rendón Marín, her father and sole caretaker, cannot be refused (para 53). Whilst this derived right of residence can be limited for reasons of public policy or public security (para 57), EU law precludes such limitations on "grounds of a general, preventive nature" (para 61). Instead, it is for the national courts to do a similar weighing-up exercise as laid out in CS (see Rendón Marín, paras 59-66). Derogations from derived rights of residence on the basis of Article 20 TFEU and Article 21 TFEU thus presumably have to withstand the same test.
The cases following the Ruiz Zambrano decision made it very clear that protection under Article 20 TFEU is only applicable to a very small number of people in "very specific situations" (Rendón Marín para 74; CS para 29): essentially only to minors who reside with their TCN parents in their home Member State. CS and Rendón Marín both confirm this, but also clarify that a very high level of protection is granted to those Union citizens who fall within the scope of the 'Ruiz Zambrano-protection'. In fact, the substantive protection against expulsion is equivalent to that of EU citizens (and their family members) who move to another Member State (the Court refers to concepts found in the EU citizens’ Directive and its predecessors, as well as relevant case law), although it is not clear if the same procedural protection applies.
The Court certainly does not exclude the possibility that "in exceptional circumstances" (CS para 50) a criminal and dangerous parent who poses a threat to a Member State's public policy or public security could be deported. Even if this means that his or her Union citizen children are forced to leave EU territory and thus deprived of the genuine enjoyment of their EU citizenship rights. Nevertheless, the Court insists on a very stringent test before such a decision can be taken.
Most notably, the Court refers to the EU's Charter of Fundamental Rights and stresses the fact that a deportation decision needs to take account of Article 7 and Article 24(2) of the Charter (see CS paras 36 and 48; Rendón Marín paras 66 and 85). In Dereci, the Court had previously held that "if the referring court considers … that the situation of the applicants in the main proceedings is covered by European Union law, it must examine whether the refusal of their right of residence undermines the right to respect for private and family life provided for in Article 7 of the Charter" (Dereci, para 72). In that case the Court had decided that the circumstances fell outside the scope of EU law, and that it was therefore beyond its jurisdiction to consider a violation of the Charter. In both CS and Rendón Marín, the Court found that the applicants' circumstances fell within the scope of EU law and thus that the Charter applied.
It is also interesting to compare the protection granted in C-135/08 Rottmann against the deprivation of the legal status of Union citizenship altogether and the protection granted in CS and Rendón Marín against being deprived of the genuine enjoyment of the Union citizenship rights by means of a parent’s expulsion to a non-EU state. Whereas in Rottmann, the Court held that a decision to withdraw someone's nationality needs to respect the principle of proportionality (Rottmann, para 59), in CS and Rendón Marín it established a list of criteria that need to be observed. Curiously, the Rottmann-test therefore appears to be narrower than the one established in CS and Rendon Marin, even if the potential outcome in circumstances like Rottmann, i.e. statelessness, might be much more serious for the individual concerned.
"[A]ccount is to be taken of the child's best interests when weighing up the interests involved. Particular attention must be paid to his age, his situation in the Member State concerned and the extent to which he is dependent on the parent (see, to this effect, ECtHR, 3 October 2014, Jeunesse v. the Netherlands, CE:ECHR:2014:1003JUD001273819, §118)."
Jeunesse v. the Netherlands, which was decided by the Strasbourg court in 2014, concerned a Surinamese national, who lived with her Dutch national husband and children in the Netherlands without a valid residence permit. The applicant argued that the refusal to allow her to reside in the Netherlands infringed her right to respect of her family life under Article 8 ECHR. The facts of this case are very similar to the ones in Dereci, in which the Court of Justice held that such a denial of residence right did not conflict with EU law. The ECtHR, however, came to the conclusion that the Dutch authorities had failed "to secure the applicant's right to respect for her family life as projected by Article 8 of the Convention" (Jeunesse v the Netherlands, §122).
So what does the reference to this judgment mean? First and foremost, the CJEU clarifies and stresses the utmost importance of taking account of the children's best interests in these deportation decisions. Secondly, it signals the Court's commitment to taking the fundamental rights of those who fall within the Ruiz Zambrano-protection very seriously.
Finally, the fact that the Court treats the situation of the daughter and the son separately in Rendón Marín reaffirms the Court's findings in previous cases that a Union citizen in a host Member State first has to rely on Article 21 TFEU before Article 20 can be applied. In the NA judgment, which the Court delivered at the end of June 2016, it held that one first has to examine whether the citizen and their TCN caretaker have a right of residence under secondary EU law. Only if there is no such right, can Article 20 TFEU apply.
The NA case concerned a Pakistani national mother who lived in the UK with her German national children where she was refused a right of residence. The Court decided that because it had already held that both the children and their TCN mother had a right of residence in the host Member State under Article 12 of Regulation No. 1612/68 (paras 52-68), which guarantees children of current and former workers the right to access to education in the host Member State, with corollary residence rights for those children and their parents (for more, see CJEU decisions in C-480/08 Teixeira and C-310/08 Ibrahim). Article 20 TFEU did not confer a right of residence in the host Member State. It is clear that the protection under Article 20 TFEU is one of last resort. Whilst the Court in NA and Rendón Marín does not directly rule out the possibility that the Ruiz Zambrano-protection might apply in a host Member State, it now almost seems impossible. It appears that that protection can only be granted by the home Member State.
Photo credit: cpkidsmountainclimbers.wordpress.com
Posted by Steve Peers at 02:06 No comments:
Labels: CJEU case law, Directive 2004/38, EU citizenship, expulsion, free movement of persons, Regulation 1612/68, Ruiz Zambrano, third-country nationals
Brexit and business and human rights litigation in England
Anil Yilmaz Vastardis, Lecturer in Law, Human Rights Centre, University of Essex
In wake of the UK’s EU membership referendum result, people from all walks of life are wondering what will happen next. While a big uncertainty looms over the political questions surrounding the process of the UK’s exit from the EU, the repercussions go far beyond the UK – and some of those wondering “what next” are likely overseas victims of human rights abuses by British corporations. The question remains as to what happens to all the EU law that either the UK has transposed into its legal order via acts of parliament, or that have direct application in the UK, such as EU Regulations.
Brussels I Regulation (Recast) is one of many such EU law instruments. It prescribes the rules on jurisdiction of member state courts, as well as the rules on the recognition and enforcement of judgments in civil and commercial matters within the EU. It has been predicted that the UK's adherence to the Brussels I regime “is likely to be significantly modified, if not entirely replaced, in the event of Brexit.” The authors of that piece outline the different scenarios on the fate of the English rules on civil jurisdiction post-Brexit. The course chosen may have an impact on the ability of human rights victims overseas to bring suit against multinational enterprises (MNEs) in UK courts.
Jurisdiction over Civil Liability Claims against Multinationals domiciled in England
Rights advocates are increasingly bringing lawsuits in the global north to hold MNEs accountable for human rights harm caused by their overseas subsidiaries. Among the reasons for pursuing the MNE in its “home” state (the state where they are domiciled – see Article 60 of Brussels I) are the existence of a dysfunctional legal system in the host state (place where the harm occurred) and/or a defunct or underfunded subsidiary. England is a popular jurisdiction for bringing such suits against UK domiciled MNEs. It is home to many multinationals and it offers advantages for creative litigation. Victims and their lawyers generally seek reparations from the parent entity on the basis of common law tort principles. While rights defenders are eager to hold parent companies accountable for harm inflicted by their subsidiaries, the legal landscape in the global north is fraught with obstacles to holding parent companies liable. Among them are the rules on civil jurisdiction.
In England, the forum non conveniens doctrine (FNC) used to be a major challenge to bringing suit against an MNE domiciled in England for harm caused overseas by its subsidiaries. The FNC allows English courts to refuse to exercise jurisdiction over a case if another forum is clearly better suited to adjudicate the case, due to for instance location of evidence and witnesses. A number of cases brought in England were protracted due to a battle over FNC. Claimants had to demonstrate substantial denial of justice in the host state legal system in order to convince English courts to exercise jurisdiction (see Connely v RTZ Corporation, Lubbe v Cape Plc).
Article 2 of Brussels I and its interpretation by the Court of Justice of the EU (CJEU) in Owusu v Jackson blocked the use of the FNC doctrine by English courts in civil liability suits filed against MNEs domiciled in England. According to Article 2 ‘persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.’ There is no indication here as to whether this rule would prevail if the lawsuit concerns events that occurred or harm suffered overseas (i.e. outside the European Union). In Owusu v Jackson, the CJEU held that Article 2 precludes a member state court from "declining to exercise jurisdiction on the ground that a court in a non-EU would be a more appropriate forum" and thus jurisdiction shall be exercised over the UK domiciled MNE even if the dispute has certain connections with a state outside the EU.
Years need not be wasted fighting a jurisdiction battle
Article 2, read together with Owusu, brought an end to the protracted litigation over whether a lawsuit against an MNE domiciled in England should be adjudicated by English courts or the courts of the host state. Admittedly, adjudicating the dispute before English courts does not guarantee the liability of the parent company. That depends on whether the facts of the case warrant holding the parent liable under the law applicable to the substance of the case (which is likely to be the law of the country where the harm occurred – see Article 4 of the Rome II Regulation).
Nevertheless, the defeat of the FNC defence was not in vein. Even though we are yet to see a ruling that holds the parent company liable for harm caused by an overseas subsidiary, lawyers continue filing strategic cases with English courts with the confidence that they would not lose years battling an FNC challenge. MNEs are less able to protract litigation through jurisdictional questions, draining victims of the funds necessary to support the litigation. Brussels I gives victims a real chance to plead their case before home state courts, and thus attract more public attention to the alleged wrongdoings of MNEs that sometimes paint a ‘socially responsible’ picture to their consumer base in the global north. Finally, the concern of fighting such a claim on its substance pushes major MNEs like Royal Dutch Shell to offer out of court settlements to victims for amounts much greater than they would have offered in the absence of such concern. Although such settlements prevent the development of legal precedent in this area, they provide much needed relief to individual victims.
If the UK leaves the EU and no longer complies with Brussels I, without a post-exit deal between the two entities that incorporates equivalent provisions, the FNC defence is likely to be resurrected in business and human rights litigation against MNEs domiciled in England. This would be a big step back for access to justice in England for overseas victims of business abuse.
Barnard & Peers: chapter 9, chapter 27
Photo credit: the times.com
JHA4: chapter II:8
Posted by Steve Peers at 07:47 No comments:
Labels: Brexit, business and human rights, civil jurisdiction, conflict of laws, human rights
Posted by Steve Peers at 03:35 1 comment:
Bailouts, Borrowed Institutions, and Judicial Review: Ledra Advertising
Alicia Hinarejos, Downing College, University of Cambridge; author of The Euro Area Crisis in Constitutional Perspective
One of the features of the response to the euro area crisis has been the resort to intergovernmental arrangements that largely avoid judicial and parliamentary control at the EU level. The paradigmatic example has been the European Stability Mechanism (ESM), created by the euro area countries in order to provide financial assistance to countries in difficulties, subject to conditionality. The ESM was created through the adoption of an international agreement, the ESM Treaty; it is an intergovernmental mechanism created outside the framework of the EU, but with significant links to it. Most importantly, the ESM ‘borrows’ two EU institutions, namely the Commission and the European Central Bank (ECB), in order to carry out its functions. (Those two bodies, along with the International Monetary Fund, constitute the so-called ‘Troika’ which oversees the controversial bail-out processes).
The nature of the ESM and the way it operates raises important questions regarding judicial protection. As mentioned above, ESM financial assistance is granted after strict conditions have been negotiated and agreed in a Memorandum of Understanding. These conditions typically require the Member State in receipt of assistance to adopt ‘austerity’ reforms that have an impact on its citizens—understandably, these citizens may wish to challenge the validity of these conditions, often questioning their compliance with the EU Charter of Fundamental Rights.
In Pringle, the Court stated that Member States were not within the scope of application of the Charter of Fundamental Rights when creating the ESM, or presumably when acting within its framework. This meant that their actions could not be reviewed for accordance with the Charter (although they can still be reviewed in national courts for compliance with purely national law, or in the European Court of Human Rights for compliance with that treaty). This, however, left open the question of whether, or in what form, the Charter applied to the EU institutions—the Commission and the ECB—when operating under the ESM. This is the question that the Court of Justice had to answer in the Cyprus bailout cases (Ledra Advertising and Mallis).
Cyprus wrote to the Eurogroup in 2012 to request financial assistance, and it was in receipt of ESM assistance from 2013 until 2016. The country had to recapitalize its biggest bank and wind down its second. The Memorandum of Understanding stipulated that bondholders and depositors would bear part of the cost. As a result, the applicants suffered substantial financial losses and turned to the EU courts: first to the General Court, and then on appeal to the Court of Justice. They were challenging the validity of the Memorandum of Understanding (Ledra Advertising), as well as a Eurogroup statement that referred to the conditions attached to the bailout (Mallis); they also asked for damages. In their view, the involvement of EU institutions—the Commission and the ECB—in the adoption of these measures meant that it should be possible for individuals to challenge their validity at the EU level; they also argued that these institutions’ involvement should trigger the EU’s non-contractual liability.
The General Court dismissed all complaints as inadmissible. It decided that neither the Memorandum of Understanding nor the Eurogroup statement could be the subject of an action for annulment; the former because it is not a measure adopted by an EU institution, the latter because it is not intended to produce legal effects with respect to third parties. It considered that the involvement of the Commission and the ECB in the adoption of these measures was not enough to attribute authorship to them, or to trigger the non-contractual liability of the Union.
The Court of Justice agreed, in part, with the General Court: neither the Eurogroup statement (Mallis) nor the Memorandum of Understanding (Ledra Advertising) can be the object of an action for annulment. The Court insisted again on its finding in Pringle that ESM acts fall outside the scope of EU law; the involvement of the Commission and the ECB does not change this, and is not enough to attribute authorship of these acts to them for the purposes of judicial review.
Yet the Court goes on to reveal a twist in Ledra Advertising: even if they are not its authors, the involvement of the Commission and the ECB in the adoption of an ESM Memorandum of Understanding may be unlawful, and thus able to trigger the non-contractual (damages) liability of the EU. The Commission, in particular, retains its role as ‘guardian of the Treaties’ when acting within the ESM framework. As a result, the Commission should not sign an ESM act if it has any suspicions as to its accordance with EU law, including the Charter.
The Court repeated the usual rules for the EU institutions to incur non-contractual liability: (a) they must have acted unlawfully, (b) damage must have occurred, and (c) there must be a causal link between the unlawful act and the damage. Not just any unlawful act gives rise to damages liability: there must be ‘a sufficiently serious breach of a rule of law intended to confer rights on individuals’. While the right to property enshrined in the Charter was a ‘rule of law intended to confer rights on individuals’, that right is not absolute: Article 52 of the Charter allows interference with some Charter rights. Applying that provision, the Court came to the conclusion that the measures contained in the Memorandum did not constitute a disproportionate and intolerable interference with the substance of the applicants’ right to property, given ‘the objective of ensuring the stability of the banking system in the euro area, and having regard to the imminent risk of [greater] financial losses’.
So individuals can challenge the EU institutions’ bailout actions by means of an action for damages (non-contractual liability), but not by means of an annulment action. It is useful to remember that the rules on access to the EU courts as regards those two types of remedy are quite different. The standing rules are more liberal for damages actions: it’s sufficient to allege that damages have been suffered as a result of an unlawful act by the EU, whereas it’s much harder to obtain standing to bring annulment actions. The time limits are more liberal too: individuals have five years to bring damages cases, but only two months to bring actions for annulment. On the other hand, the threshold to win cases is much higher for damages cases: any unlawfulness by the EU institutions leads to annulment of their actions, but only particularly serious illegality gives rise to damages liability.
In any case, we know from the Court’s ruling that breaches of at least some Charter provisions within the ESM framework could potentially give rise to damages liability. In the anti-austerity context, it should be noted that social security and many social welfare claims fall within the scope of the right to property, according to the case law of the European Court of Human Rights. In the case at stake, the Court did not discuss the proportionality of the interference with the applicant’s rights at much—or any—length, but it is clear that future applicants will face an uphill struggle.
On the whole, Ledra Advertising is a welcome change from other cases concerning measures adopted as a result of a bailout, where the Court’s approach had been to deny the existence of any link to EU law. Indeed, it seems unavoidable that the EU should bear the appropriate degree of responsibility when allowing its EU institutions to operate within the ESM framework. This is not to say that it will be easy for individuals to be awarded damages; as this case illustrates, the threshold is extremely high. Moreover, while a significant aspect of the role of the EU institutions within the ESM has been clarified, questions remain concerning the judicial and democratic accountability of this mechanism. Overall, however, Ledra Advertising is a step in the right direction.
Barnard and Peers: chapter 19, chapter 8
Photo credit: www.newsweek.com
Posted by Steve Peers at 01:07 No comments:
Labels: annulment actions, bail-outs, CJEU case law, Commission, Cyprus, damages, Economic and monetary union, EMU, ESM, European Central Bank
The Court of Justice and EU Foreign Policy: what jurisdiction should it have?
Luigi Lonardo, PhD student, King’s College London
The second paragraph of Article 24(1) Treaty on the European Union explains that “the Common Foreign and Security Policy (CFSP) is subject to specific rules and procedures”, and ends with the rather explicit sentence “the Court of Justice of the European Union shall not have jurisdiction with respect to these provisions”.
Lawyers are currently discussing whether the sentence “the CJEU shall not have jurisdiction” means “the Court has some jurisdiction”. Seriously. AG Wahl elegantly phrased it this way: “The main question could be framed as follows: does the exclusion from the CJEU’s jurisdiction cover, in principle, all CFSP acts or only certain categories of CFSP acts?” (Case C‑455/14 P H v Council and Commission AG Opinion, Par 52).
The question is of fundamental constitutional importance because an answer will enable lawyers to understand with clarity what EU foreign policy acts are excluded from the Court’s judicial review – a legal issue that the Court has not yet had the opportunity to adjudicate upon. While Art 19 TEU confers on the Court jurisdiction to ensure that in the interpretation and application of the Treaties the law is observed, Article 24, as recalled, introduces an exception. The scope of this exception, however, has not been fixed. In Case C- 658/11 the Court said that the exception “must be interpreted narrowly” because it introduces an exception from a general rule (par 70). In Opinion 2/13 (on ECHR accession), it only concluded, without further specification, that “as EU law now stands, certain acts adopted in the context of the CFSP fall outside the ambit of judicial review by the Court of Justice” (par 252). To further complicate the issue, however, Article 24 TEU also introduces an exception to the exception: the Court has jurisdiction to monitor compliance with Article 40 TEU (the division between foreign policy and other EU measures) and to review the legality of sanctions.
So, when does the Court of Justice of the European Union (CJEU) have jurisdiction? Two cases may offer guidance with respect to this issue. One case, H v Council and Commission, was decided by the Court in July, and another, Rosneft, is currently pending.
H v Council
In H, an Italian magistrate sought annulment, before the General Court (Order in H v Council and Others, T‑271/10), of the decision of a Head of an EU Mission established under CFSP. The contested decision concerned the transfer of H, a seconded Legal Officer of the EU Police Mission in Sarajevo, to the post of Prosecutor in another regional office of the same country. The General Court (GC) held that it lacked jurisdiction to hear the complaint and therefore found that the action was inadmissible. The GC reasoned that the exclusion of jurisdiction under Art 24(1) TEU only encounters two exceptions: monitoring compliance with Article 40 TEU (ie the division of competence between CFSP and non-CFSP external measures) and the review of the legality of sanctions under the second paragraph of Article 275 TFEU.
The General Court took the view that the appellant’s situation did not fall under one of the exceptions to the general rule that EU Courts do not have jurisdiction in CFSP matters (it was not, therefore, one of the two “exceptions to the exception”). The General Court considered that the contested decisions were adopted by the Head of Mission pursuant to powers that had been delegated to him by the Italian authorities. It thus concluded that it was for Italian courts to review the legality of the contested decisions and to hear the action for damages. It finally added that, should the Italian court having jurisdiction consider the contested decisions unlawful, it could make that finding and draw the necessary conclusions, even with respect to the very existence of those decisions.
The applicant appealed the decision before the ECJ. Applicant, Council, and Commission all wanted to set aside the GC’s order, albeit each for different reasons, which will be briefly outlined below with regards to the issue of the extent of the Court’s jurisdiction on CFSP matters.
The position of the Applicant
The Applicant took the view that the exclusion of the Court’s jurisdiction does not cover merely administrative measures (such as the decision at stake in the present case) but only the acts provided for in Article 25 TEU: general guidelines, decisions on actions and positions to be taken by the EU (and implementation thereof), and acts of systemic cooperation between Member States
The position of the Council
Par 32 of the Advocate General opinion explains that “The Council is of the view that the statement of reasons in the order under appeal does contain two legal errors. First, in deciding to relocate H, the Head of Mission did not exercise powers delegated to him by the Member State of origin, but by the competent EU institution (the Council itself). Second, the national court hearing the case does not have the power to annul the act challenged. Nevertheless, those errors do not — in the opinion of the Council — invalidate the conclusion reached by the General Court”
The position of the Commission
The Commission argued that the Court lacks jurisdiction only on acts that are “expression of sovereign foreign policy”, thus leaving the Court empowered, for example, to review the lawfulness of (a) acts of implementation, or (b) adopted in the framework of the CFSP when the alleged invalidity stems from a possible infringement of non-CFSP provisions. The Commission took the view, nonetheless, that the contested decision was not an implementing act.
Somewhat unsurprisingly, the Court reversed the order of the GC and found that the circumstance that the decision was a CFSP measure “does not necessarily lead to the jurisdiction of the EU judicature being excluded” (par 43).
The Court interpreted the exclusion of jurisdiction very narrowly. It gave a systematic reading of the general provisions of EU law (Article 2) and of CFSP (Articles 21 and 23 TEU) to recall that the EU is founded, in particular, on the values of equality and the rule of law ( Segi and Others v Council; Opinion 2/13). It stated that “The very existence of effective judicial review designed to ensure compliance with provisions of EU law is inherent in the existence of the rule of law (Schrems)” (par 41).
In the current case, the Court considered that the decision of the Head of Mission was subject to legal scrutiny because under Article 270 TFEU the EU judicature has jurisdiction to rule on all actions brought by EU staff members having been seconded to the EUPM. They remain subject to the Staff Regulations during the period of their secondment to the EUPM and, therefore, fall within the jurisdiction of the EU judicature, in accordance with Article 91 of those regulations (even though H was seconded by a Member State, the two situations were considered similar). The decision of the Head of Mission was considered to be merely “staff management”.
Therefore, the Court concluded, “the scope of the limitation, by way of derogation, on the Court’s jurisdiction, which is laid down in the final sentence of the second subparagraph of Article 24(1) TEU and in the first paragraph of Article 275 TFEU, cannot be considered to be so extensive as to exclude the jurisdiction of the EU judicature to review acts of staff management relating to staff members seconded by the Member States the purpose of which is to meet the needs of that mission” (par 55).
The ECJ concluded that “[the] jurisdiction stems, respectively, as regards the review of the legality of those acts, from Article 263 TFEU and, as regards actions for non-contractual liability, from Article 268 TFEU, read in conjunction with the second paragraph of Article 340 TFEU, taking into account Article 19(1) TEU and Article 47 of the Charter of Fundamental Rights of the European Union” (par 58). It therefore referred the case back to the GC.
A similar question recurs in Rosneft, the first request ever for a preliminary ruling on a CFSP act, currently pending before the Court. The case stems from a Russian gas company, Rosneft, challenging sectorial measures (not target sanctions) prohibiting EU natural or legal persons, from engaging in contractual relations with certain Russian state-owned companies and banks, and from providing such companies and banks access to financial markets.
A central question is the admissibility, as discussed at the hearing and in paragraphs 32-76 of AG Wathelet’s opinion.
The AG believes that the measure can be reviewed if it meets these cumulative two conditions: if (a) it relates to Articles 23 to 46 TEU (the foreign policy rules) and or EU acts adopted on the basis of those provisions; and if (b) its substantive content also falls within the sphere of CFSP implementation.
The first condition is derived, for Wathelet, from the consideration that the last sentence of the second subparagraph of Article 24(1) TEU excludes the Court’s jurisdiction only ‘with respect to these provisions’, and the reference thus made is to Chapter 2 of Title V of the EU Treaty, entitled ‘Specific provisions on the common foreign and security policy’, of which Article 24 forms part.
In the AG’s opinion, in particular, the court should have jurisdiction to hear actions for annulment and preliminary rulings on decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the EU Treaty – and not, therefore, regulations implementing them. For the AG, therefore, the Court has jurisdiction, but the challenged decision, to the extent that it is directly addressed to Rosneft, is not invalid. The very long opinion explains in detail why, but here we limit the scope of the analysis to the question on jurisdiction.
Judicial protection and uniformity of interpretation of EU law
The decision of the ECJ in H should be welcomed because it avoids the potential deterioration of the protection of fundamental rights which would derive from each national court being able to monitor CFSP decisions in the absence of a centralised mechanism. If national Courts had jurisdiction when the CJEU does not, this might lead to diverging and potentially even conflicting interpretations of the same CFSP measure.
Uniformity of interpretation of EU law would be further guaranteed if the Court affirmed jurisdiction to hear requests for preliminary rulings (and AG Walthelet in paras 61-62 of his opinion in Rosneft suggests that the Court can rule on CFSP preliminary rulings). The importance of judicial dialogue between the CJEU and national courts has been repeatedly affirmed in the Court’s case law (Opinion 1/09; CILFIT; Adeneler; Kamberaj). Moreover, absence of the Court jurisdiction to hear on preliminary rulings would be at issue with the third paragraph of Article 267 and the CILFIT doctrine.
The prohibition of judicial dialogue and cooperation between national and EU courts in CFSP may very well be a breach of the right to effective judicial remedy as enshrined in Article 47 EU Charter of Fundamental Rights. Article 47 Charter creates what has been described as a “composite, coherent, and autonomous” standard of EU judicial protection. Pursuant to Article 19(1) TEU, national Courts shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law, with the standard set and as determined by the CJEU (which has the final saying on interpretation and application of the Treaties). Completely excluding the Court’s jurisdiction from an area of EU law such as CFSP would seriously hinder the system of judicial protection (see to a similar effect Gestoras Pro Amnistía and Others v Council par 53; Segi and Others v Council par 53).
Even though it is left to the discretion of national courts to decide whether to make a reference for a preliminary ruling as well as the questions to be referred, completely ruling out the opportunity for an applicant (or the national court) to make such a request may indeed be against Article 47 Charter. All the more so if one accepted the reading proposed by the Council in its appeal in H, that is, that the national court does not have the power to annul the CFSP decision. This would leave a legal vacuum in the annulment of the provision (unlike what happened in C-583-11 Inuit, where the Court found that existence of alternative legal remedies allowed for a restrictive rule on judicial remedy).
Political questions doctrine
The preferable option seems to be that only genuinely political acts of CFSP cannot be subject to the Court’s substantial judicial review, although the Court should be able to monitor compliance with the procedural rules of the Treaty and compliance with fundamental human rights. This position is very similar to that expressed by the Commission in H, where it said that only sovereign acts of foreign policy cannot be scrutinised by the Court – without saying anything of formal control.
In H, the Court seemed to conclude that if there was any other reason for the which the Court should have jurisdiction, that reason takes precedence over the exclusion of Article 24, and then the Court does have jurisdiction. This is too broad an understanding of the Court’s powers.
In its judgment in Manufacturing Support & Procurement Kala Naft v Council, the CJEU ruled that it does not have jurisdiction on a CFSP provision which is not a restrictive measure against natural or legal persons pursuant to Article 275 TFEU, and the substantial result might be similar in Rosneft (par 85 AG opinion).
For the reasons explained above, the Court should accept the request on the preliminary ruling in Rosneft, but should then take the opportunity to draw a clear distinction: on one hand, (a) EU acts which are purely political and diplomatically sensitive acts of sovereign foreign policy; on the other hand, (b) all remaining CFSP decisions, all acts of implementation, and provisions of general application.
On (a), which I submit should be assessed on a case by case basis and on their substantial content: the Court should recognise it lacks power of judicial review. Those acts, determined with a “substance over form” rule (see Les Verts par 27; AG Wathelet seems to be taking this position in paras 49-50 of his opinion in Rosneft; see also Gestoras Pro Amnistía and Others v Council par 54; Elitaliana v Eulex Kosovo par 48-49) will have too indirect an effect on individuals (as the case law on Article 263(4) TFEU now stands)
Such acts also have such a discretionary content that courts should defer to the decision of the political actors who adopted them. The latter element, which American constitutional lawyers refer to as the “political question doctrine” is present in many jurisdiction (see par 52 AG Opinion in Rosneft): deference toward the so called “actes de gouvernement”. The Commission proposed this thesis in its written submission and at the oral hearing in Rosneft. The “political question doctrine” is the attitude of courts not to review issues which are inherently political, are best left to the discretion of the actor who took the decision, and are ultimately non-justiciable.
In the leading case on the issue, Baker v Carr, the US Supreme Court held that a question is eminently political if it presents some characteristics such as “a textually demonstrable constitutional commitment of the issue to a coordinate political department”, or “an unusual need for unquestioning adherence to a political decision already made”. While in some cases involving foreign policy decisions the need for adherence to a political decision is evident (ie the ECJ could hardly decide that the EU cannot prohibit commerce with certain Russian companies involved in Crimea at all), arguably the retention of CFSP provisions in the TEU, the preference for intergovernmental institutions in that domain, the scant role of the European Parliament in the decision-making process, not to mention the exclusion of the Court’s jurisdiction, all militate in favour of a strong constitutional preference for CFSP to be resolved by purely political departments. The doctrine could very well be embraced for the first time by the ECJ in deciding Rosneft.
On the other hand, as regards category (b), which includes the case of the “decision on staff management” in H, the Court should exercise its powers of judicial review.
Art credit: The Economist, Peter Schrank
Posted by Steve Peers at 06:13 No comments:
Labels: Advocate-General, Article 267 TFEU, CFSP, CJEU case law, common foreign and security policy, jurisdiction of EU courts, sanctions
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