Draft international agreement – Accession of the European Union to the European Convention for the protection of Human Rights and Fundamental Freedoms

Opinion

2/13

18.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Request for an Opinion Article 218(11) TFEU

/

CJEU

Full Court

M.A. Tizzano

J. Kokott

ECHR

Keywords

 Draft international agreement — Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms — Compatibility of the draft agreement with the EU and FEU Treaties.

Significant points

With the entry into force of the Lisbonne Treaty on 1st December 2009, the Charter of fundamental rights has acquired the same legal binding force than Treaties.At this occasion, the ECHR became a formal source of inspiration concerning the development and the protection of the EU general principles [Article 6(3) TEU]. The ECHR also constitutes, as interpreted by the ECtHR, a minimum standard protection of the corresponding rights laid down in the Charter and in the ECHR [Article 52(3) of the Charter]. Since 1st December 2009, it is also foreseen that the EU accede to the ECHR [Article 6(2) TEU] subject to the conformity of such accession to the conditions laid down in the Protocol N°8 on the Article 6 TEU.The EU Commission was designated to represent the EU in the negotiations of projects of accession agreement such as the one that was submitted to the Opinion of the CJEU on 4th July 2013 pursuant to Article 218(11) TFEU.The CJEU issued an Opinion concerning the compatibility of the envisaged project with EU law.

The CJEU emphasizes that:

  1. The absence of coordination rules between the Article 53 of the Charter and the Article 53 ECHR.

Pursuant to Article 53 ECHR, Contracting Parties may adopt higher protection standards. This absolute faculty is liable to compromise the level of protection insured by the Charter but also the primacy, the unity and the effectiveness of the EU and especially the Article 53 which solely provides that the EU may adopt higher standard of protection.

This project is therefore at variance with the principle of attribution of power between the EU and Member States.

  1. The risks of conflict with the principle of mutual trust.

This EU general principle leads to a presumption according to which Member States respect fundamental rights.

The ECHR, contrariwise, requires States Parties to verify that the other Parties respect fundamental rights.

Therefore, the project is at variance with the specificity of the EU legal order and with its constitutional framework and founding principles.

  1. The tensions related to the exercise of competence between the CJEU and the ECtHR

The envisaged project is incompatible with the specificity and the autonomy of the EU. In addition, it is incompatible with the exclusive competences of the CJEU to interpret EU law.

a. Absence of coordination rules between the mechanisms of advisory opinion [ECtHR] and the preliminary ruling [CJEU] concerning the interpretation of the corresponding rights.

It would therefore constitute a risk of circumvention of the mandatory mechanism laid down in Article 344 TFEU according to which any question concerning the interpretation of the Charter must be submitted to the CJEU.

b. The ECtHR would conflict with the rules concerning the attribution of powers between the EU and the Member States and also with the question as whether the EU or a Member States is liable for an act or an omission (imputability).

i. The co-respondent mechanism

The admissibility of the intervention of a Contracting Party in the procedure as a co-respondent is subject to the ECtHR appraisal which would appreciate the arguments in support of this action.

In addition, the ECtHR may adjudicate on the issue of the respondent or the co-respondent exclusive liability.

In those cases were EU law is at stake, the prior appraisal and the allocation of responsibility would have as their effect to jeopardise the rules concerning the attribution of powers and those on imputability.

Finally the co-respondent mechanism would have the effect to enabling the sanction of a Member State even though it has made a reservation pursuant to Article 57 ECHR.

This effect would be at variance with the Article 2 of the Protocol N°8 relating to Article 6 (2) of the Treaty on European Union on Accession of the Union to the ECHR according to which nothing in the accession agreement affects the situation of Member States.

ii. The procedure for the prior involvement of the Court of Justice

The necessity for the procedure for the prior involvement of the CJEU is linked to respect for the subsidiary nature of the control mechanism established by the ECHR. Accordingly, it is necessary for the question whether the Court of Justice has already given a ruling on the same question of law as that at issue in the proceedings before the ECtHR to be resolved only by the competent EU institution, whose decision should bind the ECtHR.

To permit the ECtHR to rule on such a question would be tantamount to conferring on it jurisdiction to interpret the case law of the Court of Justice.

In the second place, the agreement envisaged excludes the possibility of bringing a matter before the CJEU in order for it to rule on a question of interpretation of secondary law by means of the prior involvement procedure.

However, the interpretation of a provision of EU law, including of secondary law, requires, in principle, a decision of the Court of Justice where that provision is open to more than one plausible interpretation.

If the CJEU was not allowed to provide the definitive interpretation of secondary law, and if the ECtHR, in considering whether that law is consistent with the ECHR, had itself to provide a particular interpretation from among the plausible options, there would most certainly be a breach of the principle that the CJEU has exclusive jurisdiction over the definitive interpretation of EU law.

  1. The ECtHR would be able to control acts emanating from the EU in respect of which the CJEU has no legal jurisdiction in the CFSP.

Nevertheless, the judicial review of acts, actions or omissions on the part of the EU, including in the light of fundamental rights, cannot be conferred exclusively on an international court which is outside the institutional and judicial framework of the EU.

 

 

Noteworthy

A few potential solutions derived from this Opinion :

  • Elaboration and insertion of rules of articulation between the ECHR and EU law;
  • Exclusion of the competence of the ECtHR for disputes between EU Member States or between the EU and the Member States concerning the application of the ECHR within the scope ratione materiae of EU law;
  • The prior involvement procedure should be set up in such a way as to ensure that, in any case pending before the ECtHR, the EU is fully and systematically informed, so that the competent EU institution is able to assess whether the Court of Justice has already given a ruling on the question at issue in that case and, if it has not, to arrange for the prior involvement procedure to be initiated.

Public service contracts – Directive 92/50/EEC

Judgment

C-568/13

18.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

Azienda Ospedaliero-Universitaria di Careggo-Firenze

V

Data Medical Service Srl

CJEU

 5th Chamber

 E. Juhász

 J. Kokott

Public service contracts — Directive 92/50/EEC

Keywords

 Public service contracts — Directive 92/50/EEC — Articles 1(c) and 37 — Directive 2004/18/EC — First subparagraph of Article 1(8) and Article 55 — Concepts of ‘service provider’ and ‘economic operator’ — Public university hospital — Entity with legal personality and business and organisational autonomy — Principally non-profit-making activity — Institutional purpose of offering health services — Possibility of offering similar services on the market — Admission to participate in a tendering procedure for the award of a public contract

Significant points

  1. It should be noted that the possibility for public entities to participate in tendering procedures for public contracts, in parallel to the participation of private economic entities, is already evident from the wording of Article 1(c) of Directive 92/50, according to which ‘service provider’ is to mean any natural or legal person, including a public body, which offers services. Furthermore, such a possibility to participate was recognised by the Court in the judgment in Teckal, C‑107/98, EU:C:1999:562, paragraph 51, and was repeated in the subsequent judgments in ARGE, EU:C:2000:677, paragraph 40; CoNISMa, EU:C:2009:807, paragraph 38; and Ordine degli Ingegneri della Provincia di Lecce and Others, EU:C:2012:817, paragraph 26.
  2. One of the objectives of the EU rules on public procurement is to attain the widest possible opening-up to competition (see, to that effect, the judgment in Bayerischer Rundfunk and Others, C‑337/06, EU:C:2007:786, paragraph 39), an opening-up which is also in the interest of the contracting authority concerned itself, which will thus have greater choice as to the tender which is most advantageous and most suited to the needs of the public authority in question.
  3. The Court has therefore held that it follows from both the EU rules and the case-law that any person or entity which, in the light of the conditions laid down in a contract notice, believes that it is capable of carrying out the contract is eligible to submit a tender or to put itself forward as a candidate, regardless of whether it is governed by public law or private law, whether it is active as a matter of course on the market or only on an occasional basis (see, to that effect, the judgment in CoNISMa, EU:C:2009:807, paragraph 42).
  4. The provisions of Directive 92/50, and in particular the general principles of freedom of competition, non-discrimination and proportionality which underlie that directive, must be interpreted as not precluding national legislation which allows a public hospital, such as that at issue in the main proceedings, participating in a tendering procedure to submit a tender which cannot be matched by any competitors as a result of the public funding which it receives.
  5. In that regard, even if the referring court considers that it is desirable to identify corrective mechanisms designed to even out the disparities existing between the various economic operators at the outset and which should go further than procedures to check the potentially abnormal character of the tenders, it must be noted that the EU legislature, while being aware of the differences between competitors participating in a public contract, did not make provision for mechanisms other than those designed to check and possibly reject abnormally low tenders.
  6. However, the provisions of Directive 92/50 and the Court’s case-law do not allow, a priori and without further consideration, a tenderer to be excluded from participation in a procedure for the award of a public contract on the sole ground that, as a result of public subsidies which it receives, it is able to submit tenders at prices which are significantly lower than those of unsubsidised tenderers (see, to that effect, the judgments in ARGE, EU:C:2000:677, paragraphs 25 to 27, and CoNISMa, EU:C:2009:807, paragraphs 34 and 40).
  7. In addition, in the course of the examination of the abnormally low character of a tender on the basis of Article 37 of that directive, the contracting authority may take into consideration the existence of public funding which such an entity receives in the light of the option to reject that tender. It should be noted that Article 37 of Directive 92/50 does not contain a definition of the concept of an ‘abnormally low tender’. It is thus for the Member States and, in particular, the contracting authorities to determine the method of calculating an anomaly threshold constituting an ‘abnormally low tender’ within the meaning of that article (see, to that effect, the judgment in Lombardini and Mantovani, C‑285/99 and C‑286/99, EU:C:2001:640, paragraph 67).
  8. That being the case, the EU legislature made clear in that provision that the abnormally low character of a tender must be assessed ‘in relation to the service to be provided’. Thus, the contracting authority may, in the course of its examination of the abnormally low character of a tender, take into consideration, for the purpose of ensuring healthy competition, not only the situations set out in the second paragraph of Article 37 of Directive 92/50 but also all the factors that are relevant in the light of the service at issue (see, to that effect, the judgment in SAG ELV Slovensko and Others, EU:C:2012:191, paragraphs 29 and 30).

Noteworthy

The Court of Justice has reaffirmed that public entities may participate in public procurement tenders and cannot be precluded from doing so under national legislation. Even if these entities receiving public funding may find themselves at a competitive advantage compared to market operators offering services without market funding, no corrective measures are permitted under EU law allowing for the automatic exclusion of abnormally low tenders. The contracting authority, however, may take into consideration the existence of public funding when deciding to reject the tender.

Public procurement – Contracts falling below the threshold laid down in Directive 2004/18/EC

Judgment

C-470/13

18.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

Generali-Providencia Biztosító Zrt

V

Közbeszerzési Hatóság Közbeszerzési Döntőbizottság

CJEU

10th Chamber

C. Vajda

M. Szpunar

Public procurement

Keywords

 Public procurement — Contracts falling below the threshold laid down in Directive 2004/18/EC — Articles 49 TFEU and 56 TFEU — Applicability — Certain cross-border interest — Grounds for exclusion from a tendering procedure — Exclusion of an economic operator having committed an infringement of national competition rules, established by a judgment given not more than five years ago — Lawfulness — Proportionality

Summary

  1. In so far as the provisions of the TFEU relied on by the referring court are concerned, it must be observed that, where a public contract does not come within the scope of Directive 2004/18, because it falls short of the relevant threshold laid down in Article 7 of that directive, that contract is subject to the fundamental rules and general principles of that treaty, provided that it is of certain cross-border interest in the light, inter alia, of its value and the place where it is carried out (see, to that effect, judgments in Ordine degli Ingegneri della Provincia di Lecce and Others, C‑159/11, EU:C:2012:817, paragraph 23, and Consorzio Stabile Libor Lavori Pubblici, C‑358/12, EU:C:2014:2063, paragraph 24).
  2. In relation to the exclusion of economic operators from a public contract in the context of freedom of establishment and the freedom to provide services under Articles 49 TFEU and 56 TFEU, it must be observed that Article 45(2)(d) of Directive 2004/18 makes it possible to exclude any operator who ‘has been guilty of grave professional misconduct proven by any means which the contracting authorities can demonstrate’.
  3. It must be observed that the concept of ‘professional misconduct’, for the purposes of that provision, covers all wrongful conduct which has an impact on the professional credibility of the operator at issue and not only the infringements of ethical standards in the strict sense of the profession to which that operator belongs (see, to that effect, judgment in Forposta and ABC Direct Contact, C-465/11, EU:C:2012:801, paragraph 27). In those circumstances, the commission of an infringement of the competition rules, in particular where that infringement was penalised by a fine, constitutes a cause for exclusion under Article 45(2)(d) of Directive 2004/18.
  4. If such a cause for exclusion is possible under Directive 2004/18, it must a fortiori be regarded as justified in relation to public contracts which fall short of the threshold defined in Article 7 of that directive and which are consequently not subject to the strict special procedures laid down in that directive (see, to that effect, judgment in Consorzio Stabile Libor Lavori Pubblici, C-385/12, EU:C:2014:2063, paragraph 37).
  5. The answer to the questions referred is that Articles 49 TFEU and 56 TFEU do not preclude the application of national legislation excluding the participation in a tendering procedure of an economic operator which has committed an infringement of competition law, established by a judicial decision having the force of res judicata, for which a fine was imposed.

Noteworthy

 In this preliminary ruling, the Court of Justice has confirmed that even if a public contract does not come within the scope of an EU directive and national legislation did not make the directive concerned directly and unconditionally applicable to such a contract, the contract may still be subject to the fundamental rights and principles of the TFEU provided it is of certain cross-border interest.

Protection of the European Union’s financial interests – Regulation (EC, Euratom) No 2988/95

Judgment

C-599/13

18.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

Somalische Vereniging Amsterdam en Omgeving (Somvao)

v

Staatsecretaris van Veiligheid en Justitie

CJEU

Third Chamber

C. Toader

 J. Kokott

Protection of the European Union’s financial interests — Regulation (EC, Euratom) No 2988/95

Keywords

 Protection of the European Union’s financial interests — Regulation (EC, Euratom) No 2988/95 — Article 4 — General budget of the European Union — Regulation (EC, Euratom) No 1605/2002 — Article 53b(2) — Decision 2004/904/EC — European Refugee Fund for the period 2005-2010 — Article 25(2) — Legal basis of the obligation to recover funds in the event of an irregularity

Significant points

 Article 53(2)(c) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, as amended by Council Regulation (EC, Euratom) No 1995/2006 of 13 December 2006, must be interpreted as meaning that, failing a legal basis in national law, that provision provides a legal basis for a decision of the national authorities to alter, to the detriment of the beneficiary, the amount of the grant paid out of the European Refugee Fund, where management is shared between the Commission and the Member States, and to order the recovery from the beneficiary of part of that amount. It is for the national court to determine whether, taking into account the conduct of both the beneficiary of the funds and of the national administrative authorities, the principles of legal certainty and legitimate expectations, as understood in EU law, have been observed as regards the demand for repayment.

Noteworthy

 This judgment relates to a decision by a Dutch authority to reduce the grant allocated under the European Refugee Fund to a Somali community association aiding refugees in the Netherlands. It clarifies that, in the absence of national legislation, EU legislation applied to funds granted by the Union, whether those funds be granted on a centralised basis, on the basis of shared or decentralised management or on the basis of joint management with international organisations.

Recovery of taxes unduly paid under EU law

Judgment

C-640/13

18.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Failure of a Member to fulfil obligations

European Commission

v

United Kingdom of Great Britain and Northern Ireland

CJEU

First Chamber

 A. Tizzano

Y. Bot

Recovery of taxes unduly paid under EU law

Key-words

 Failure of a Member State to fulfil obligations — Recovery of taxes unduly paid under EU law — National legislation — Retroactive curtailment of the limitation period for the applicable remedies — Principle of effectiveness — Principle of the protection of legitimate expectations

Significant points

  1. By adopting a provision, such as section 107 of the Finance Act 2007, which curtailed, retroactively and without notice or transitional arrangements, the right of taxpayers to recover taxes levied in breach of EU law, the United Kingdom of Great Britain and Northern Ireland has failed to comply with its obligations under Article 4(3) TEU.
  2. In accordance with the principle of sincere cooperation enshrined in Article 4(3) TEU, the principle of effectiveness requires such procedural rules not to render in practice impossible or excessively difficult the exercise of rights conferred by EU law (see, to that effect, judgments in Agrokonsulting-04, C-93/12, EU:C:2013:432, paragraph 36, and Test Claimants in the Franked Investment Income Group Litigation, C-362/12, EU:C:2013:834, paragraph 32).
  3. With respect to the present infringement proceedings, it must be borne in mind that, according to the settled case-law of the Court, that principle prohibits the retroactive application of a new, shorter, and, as the case may be, more restrictive limitation period than that previously applicable, where its application concerns actions for the recovery of domestic taxes contrary to EU law which have already been commenced at the time the new period comes into force (see, to that effect, judgment in Test Claimants in the Franked Investment Income Group Litigation, EU:C:2013:834, paragraph 35 and the case-law cited).
  4. Moreover, that principle precludes national legislation which curtails, retroactively and without any transitional arrangements, the period within which repayment of the sums collected in breach of EU law could be sought (see judgment in Test Claimants in the Franked Investment Income Group Litigation, EU:C:2013:834, paragraph 38).
  5. Section 107 of the Finance Act 2007, de facto, denies taxpayers the possibility of relying on the Kleinwort Benson cause of action, in relation to which a longer limitation period applies than that relating to the Woolwich cause of action, namely six years from the date of discovery of the mistake on which the payment was based, rather than from the date the undue taxes were paid. That section makes it impossible in practice for taxpayers to exercise the right to a refund of taxes levied in breach of EU law which was available to them prior to the adoption of that section and which they had already asserted by that date (see, to that effect, judgment in Test Claimants in the Franked Investment Income Group Litigation, EU:C:2013:834, paragraph 43).
  6. In the second place, with respect to the principle of the protection of legitimate expectations, the Court has held that that principle also precludes national legislation which retroactively deprives a taxpayer of the right enjoyed prior to the adoption of that legislation to obtain the repayment of taxes levied in breach of EU law (see judgment in Test Claimants in the Franked Investment Income Group Litigation, EU:C:2013:834, paragraph 45 and the case-law cited). As noted by the Commission in its application, in accordance with that principle, a taxpayer who has brought, by the time the new legislation is adopted, an action seeking such a refund is entitled to expect that his action will not be declared inadmissible as a result of the retroactive application of that legislation and that the courts before which proceedings were brought will decide on the substance of that action.It follows that section 107 of the act must be deemed incompatible not just with the principle of effectiveness, but also with the principle of the protection of legitimate expectations of taxpayers, as regards the obligation under EU law to guarantee taxpayers the right to a refund of taxes paid in breach of that law, an obligation which the United Kingdom is required to fulfil by virtue of Article 4(3) TEU.It follows that section 107 of the act must be deemed incompatible not just with the principle of effectiveness, but also with the principle of the protection of legitimate expectations of taxpayers, as regards the obligation under EU law to guarantee taxpayers the right to a refund of taxes paid in breach of that law, an obligation which the United Kingdom is required to fulfil by virtue of Article 4(3) TEU.It follows that section 107 of the act must be deemed incompatible not just with the principle of effectiveness, but also with the principle of the protection of legitimate expectations of taxpayers, as regards the obligation under EU law to guarantee taxpayers the right to a refund of taxes paid in breach of that law, an obligation which the United Kingdom is required to fulfil by virtue of Article 4(3) TEU.It follows that section 107 of the act must be deemed incompatible not just with the principle of effectiveness, but also with the principle of the protection of legitimate expectations of taxpayers, as regards the obligation under EU law to guarantee taxpayers the right to a refund of taxes paid in breach of that law, an obligation which the United Kingdom is required to fulfil by virtue of Article 4(3) TEU.
  7. It follows that section 107 of the act must be deemed incompatible not just with the principle of effectiveness, but also with the principle of the protection of legitimate expectations of taxpayers, as regards the obligation under EU law to guarantee taxpayers the right to a refund of taxes paid in breach of that law, an obligation which the United Kingdom is required to fulfil by virtue of Article 4(3) TEU

Noteworthy

 Under the Finance Act 2007, the limitation period in which to bring a claim in England and Wales for a mistake in law causing an undue tax payment was curtailed, including for proceedings brought for the refund of taxes levied in breach of EU law. The Court of Justice, on reference for preliminary ruling, has declared that this is incompatible with the obligations imposed upon Member States under Article 4(3) TEU and hinders the exercise of rights conferred under EU law.

Consumer protection – Consumer credit – Pre-contractual information duties

Judgment

C-449/13

18.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

CA Consumer Finance SA

V

Ingrid Bakkaus,

Charlien Bonato,

Florian Bonato

CJEU

4th Ch.

A. Prechal

/

EU Banking and Financial law – Consumer credit – Consumer protection

Keywords

 Consumer protection – Consumer credit – Directive 2008/48/EC – Pre-contractual information duties – Obligation to check the borrower`s creditworthiness – Burden of proof – Methods of proof

Significant points

Pursuant to Directive 2008/48/EC lenders, when contracting with consumers, bear responsibility for the pre-contractual information requirements laid down in the Directive. They must provide consumers with a “Standard European Consumer Credit Information” form, check individually the creditworthiness of the consumer and have a duty to assist the consumer by giving a personalised explanation if need be. The purpose of this Directive is to enable the consumer to make an informed choice as to the commitment to subscribe to a loan. But there are no provision rules relating to the burden of, or the detailed rules for, providing that the lenders` obligations have been fulfilled.

  1. In this respect, the principle of effectiveness (which limits the procedural autonomy of the Member States) would be undermined if the burden of proving the non-performance of the lender`s obligations lay with the consumer. A diligent lender must be aware of the need to gather and retain evidence that its obligations to provide information and explanations have been fulfilled. A standard term according to which the borrower acknowledges that he has received and taken note of the “Standard European Information form” constitutes an indication which the lender is required to substantiate with one or more relevant items of evidence.
  2. The consumer’s creditworthiness assessment (article 8 of the Directive 2008/48) may be carried out solely on the basis of information supplied by the consumer, provided that that information is sufficient and that mere declarations by the consumer are also accompanied by supporting evidence. Secondly, it does not require the lender to carry out systematic checks of the veracity of the information supplied by the consumer. The Directive 2008/48/EC affords the lender a margin of discretion for the purpose of determining whether or not the information at its disposal is sufficient. However, mere unsupported declarations made by the consumer may not, in themselves, be sufficient if they are not accompanied by supporting evidence. This requirement aims to making creditors accountable and to preventing them from granting loans to consumers who are not creditworthy.
  3. Pursuant to article 5(6) of the Directive 2008/48, further to the provision of the “Standard European Consumer Credit Information” form (article 5(1), the lender must provide adequate and personalized explanations to the consumer in order to place him in a position where he is enabled to assess whether the proposed credit agreement is adapted to his needs and to his financial situation. Therefore, notwithstanding the pre-contractual information which must be provided under Article 5(1) of that Directive, the consumer may, pursuant to Article 5(6), before entering into the credit agreement, still need additional assistance. The Directive does not specify in what form this additional adequate explanations must be given to the borrower. Therefore, those explanations may be given orally by the lender to the consumer in the course of an interview. Those explanations must be communicated to the consumer in good time before the credit is signed. This requirement aims to enabling the consumer to make a fully informed decision with regard to a type of loan agreement.
  4. Both articles 5 and 8 of the Directive 2008/48 are pre-contractual in nature. There is no link between the two obligations stemming from these two articles. As such, the assessment of the financial situations and the needs of the consumer may not be necessarily carried out before the provision of adequate explanations. The lender is in a position to give the consumer explanations based solely on information which the consumer supplies to him, so that the consumer may make a decision with regard to a type of loan agreement, without the lender being required to assess the consumer’s creditworthiness beforehand. However, the lender must take account of the assessment of the consumer’s creditworthiness in so far as that assessment means that the explanations provided need to be adapted.

Noteworthy

Competition – Abuse of dominant position – Slovenian mobile telephone services market

Judgment

T-201/11

17.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

Si.mobil telekomunikacijske storitve v European Commission

General Court

3rd Chamber

E. Bieliūnas

/

Competition law — Abuse of a dominant position

Keywords

Competition — Abuse of dominant position — Slovenian mobile telephone services market — Decision rejecting a complaint — Case being dealt with by the competition authority of a Member State — No EU interest

Significant points

  1. It is apparent from the clear wording of Article 13(1) of Regulation No 1/2003 that the Commission is entitled to reject a complaint on the basis of that provision if it is satisfied that, first, a competition authority of a Member State ‘is dealing with’ the case that has been referred to the Commission and, second, the case relates to ‘the same agreement, decision of an association or practice’. In other words, if those two conditions are fulfilled, the Commission has ‘sufficient grounds’ on which to reject the complaint referred to it.
  2. It is apparent from recital 18 in the preamble to Regulation No 1/2003 that the Council intended to enable the competition authority members of the European competition network to rely on a new ground for rejecting a complaint that is different from the ground based on lack of EU interest, which may justify the Commission’s rejection of a complaint. The Commission was not therefore required, in implementing Article 13 of Regulation No 1/2003, to carry out a balancing test and ascertain whether the EU had an interest in the Commission conducting a further investigation of the applicant’s complaint, in so far as the complaint related to the retail market.

Noteworthy

 This is the first time that the General Court has ruled on a rejection by the European Commission of an antitrust complaint on the grounds that a competition authority of a Member State was already dealing with the same matter. The judgment therefore outlines the conditions in which such a rejection may be permitted under Article 13(1) Regulation No 1/2003.

Common foreign and security policy – Restrictive measures against persons and entities with a view to combating terrorism

Judgment

T-400/10

17.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

Hamas v Council

General Court

2nd Ch.

F. Dehousse

/

Restrictive measures

Keywords

Common foreign and security policy — Restrictive measures against certain persons and entities with a view to combating terrorism — Freezing of funds — Factual basis of the decisions to freeze funds — Reference to terrorist acts — Need for a decision of a competent authority for the purpose of Common Position 2001/931 — Obligation to state reasons — Temporal adjustment of the effects of an annulment

Significant points

  1. In accordance with a consistent line of decisions relating to successive fund-freezing measures adopted under Regulation No 2580/2001, an applicant still has an interest in obtaining annulment of a decision imposing restrictive measures which has been repealed and replaced by a subsequent restrictive decision, in so far as the repeal of an act of an institution does not constitute recognition of the unlawfulness of that act and has only prospective effect, unlike a judgment annulling an act, by which the annulled act is eliminated retroactively from the legal order and is deemed never to have existed (judgment of 12 December 2006 in Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, ‘OMPI T‑228/02’, ECR, EU:T:2006:384, paragraph 35; see also judgments of 23 October 2008 in People’s Mojahedin Organization of Iran v Council, T‑256/07, ‘PMOI T‑256/07’, ECR, EU:T:2008:461, paragraphs 45 to 48 and the case-law cited, and 30 September 2009 in Sison v Council, T‑341/07 ‘Sison T‑341/07’, ECR, EU:T:2009:372, paragraphs 47 and 48).
  2. In the first place, it should be borne in mind that, after adopting, on the basis of decisions of competent national authorities, a decision to include a person or a group on the list relating to frozen funds, the Council must satisfy itself at regular intervals, at least once every six months, that there are still grounds for maintaining that person or group on the list.
  3. Although verification that there is a decision of a national authority meeting the definition in Article 1(4) of Common Position 2001/931 is an essential precondition for the adoption, by the Council, of an initial decision to freeze funds, the verification of the consequences of that decision at national level is imperative in the context of the adoption of a subsequent decision to freeze funds (OMPI T‑228/02, EU:T:2006:384, paragraph 117, and judgment of 11 July 2007 in Sison v Council, T‑47/03, EU:T:2007:207, paragraph 164). The essential question when reviewing whether to continue to include a person on the list is whether, since that person was included on the list or since the last review, the factual situation has changed in such a way that it is no longer possible to draw the same conclusion in relation to the involvement of that person in terrorist activities (judgment of 15 November 2012 in Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, ECR, EU:C:2012:711, paragraph 82).
  4. In that regard, the Court cannot accept that the statement of reasons may consist merely of a general, stereotypical formulation, modelled on the drafting of Article 2(3) of Regulation No 2580/2001 and Article 1(4) or (6) of Common Position 2001/931. In accordance with the principles referred to above, the Council is required to state the matters of fact and of law which constitute the legal basis of its decision and the considerations which led it to adopt that decision. The grounds for such a measure must therefore indicate the actual and specific reasons why the Council considers that the relevant rules are applicable to the party concerned (see OMPI T‑228/02, EU:T:2006:384, paragraph 143 and the case-law cited).
  5. Accordingly, both the statement of reasons for an initial decision to freeze funds and the statement of reasons for subsequent decisions must refer not only to the legal conditions of application of Regulation No 372/2001, in particular the existence of a national decision taken by a competent authority, but also to the actual and specific reasons why the Council considers, in the exercise of its discretion, that the person or entity concerned must be made the subject of a measure freezing funds (Sison T‑341/07, paragraph 59 above, EU:T:2009:372, paragraph 60).

 

Noteworthy

 The General Court has once again annulled the imposition of restrictive measures by the European Council on a legal person for a lack for factual reasoning in support of the decision to impose such measures. Consistent with its case-law in Case T‑58/12 Nabipour and Others v Council [2013], the General Court has suspended the effects of the annulment, in order to avoid the risk of serious and irreversible harm to the effectiveness of the restrictive measures, for a period of three months from the delivery of the judgment or, if an appeal is lodged, until the Court of Justice has given judgment on that appeal.

Services offered in Spain by pension funds and insurance companies established in another Member State

Judgment

C-678/11

11.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Action for failure to fulfil obligations

European Commission

V

Kingdom of Spain

CJUE

 5 th Ch.

 C. Vajda

 /

Free provision of services –

EEA Agreement

Keywords

 Failure of a Member State to fulfil obligations — Article 56 TFEU and Article 36 of the EEA Agreement — Services offered in Spain by pension funds and insurance companies established in another Member State — Occupational pension schemes — Obligation to designate a tax representative resident in Spain — Restrictive nature — Justification — Effective fiscal supervision and prevention of tax avoidance — Proportionality

Significant points

  1. By having adopted provisions pursuant to which pension funds established in Member States other than the Kingdom of Spain and offering occupational pension schemes in that Member State and insurance companies operating in Spain under the freedom to provide services are required to appoint a tax representative resident in that Member State, the Kingdom of Spain has failed to fulfil its obligations under Article 56 TFEU, because they go beyond what is necessary to achieve the objectives of general interest pursued.

Indeed, national legislation giving pension funds established in Member States other than the Kingdom of Spain and offering occupational pension schemes in that Member State and insurance companies operating in Spain under the freedom to provide services the choice of appointing a tax representative or carrying out the tasks themselves, in accordance with the solution which they consider to be the most advantageous from the economic point of view, would be less prejudicial to the freedom to provide services than the general obligation to appoint such a representative imposed by the national legislation at issue (see, by analogy, judgments in Commission v Portugal, C‑267/09, EU:C:2011:273, paragraph 47, and National Grid Indus, C‑371/10, EU:C:2011:785, paragraphs 69 to 73).

  1. By contrast, the Commission’s application must be dismissed in so far as it seeks a declaration that the Kingdom of Spain has failed to fulfil its obligations under Article 36 of the EEA Agreement.

In that regard, the Kingdom of Spain expressly states that it has not concluded any agreement on the exchange of information with the Principality of Liechtenstein. Given that the Commission has not alleged that there are any bilateral agreements on mutual assistance in tax matters between the defendant Member State and the States party to the EEA Agreement which are non-EU members, it has not established the existence of mechanisms for the exchange of information and for cooperation sufficient to enable the Kingdom of Spain to obtain information on the taxes due and the collection of those taxes (see, by analogy, judgments in Commission v Portugal, EU:C:2011:273, paragraph 56, and Commission v Spain, EU:C:2012:439, paragraph 98).

Noteworthy

In line with a well-settled case law on the obligation to designate a tax representation resident in the Host Member State. The judgment results in the immediate disapplication of the national provisions considered incompatible with EU Law, and, if need be, in the duty for the Kingdom of Spain replace it by provisions which comply with EU Law within a reasonable deadline.

Cartels – French market for analysis of clinical biology

Judgment

T-90/11

10.12.2014

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Action for annulment

Ordre national des pharmaciens and Others

v

Commission

General Court

9th Chamber

O. Czùcz

/

Cartels – Agreements between undertakings

Keywords

Competition – Cartels – French market for analysis of clinical biology – Decision finding infringement of Article 101 TFEU – Association of undertakings – Industry body – Object of inspection and investigation – Conditions of application of Article 101 TFEU – Infringement by object – Minimal price and damage to the development of laboratory groups – Single and continuous infringement – Evidence – Errors of factual and legal assessment – Amount of fine – Paragraph 37 of 2006 Fining Guidelines – Full jurisdiction

Significant points

The General Court confirmed the Commission’s decision to find that a French professional association representing pharmacists (ONP) had infringed Article 101 TFEU.The General Court agreed with the Commission that the ONP had to comply with competition law. Competition rules applied to it as an association bringing together pharmacists, who are undertakings for the purposes of EU competition law. In this regard, the ONP was not a public authority exercising regulatory powers and its conduct went beyond what it was entitled or requested to do under French law.The ONP’s conduct violated Article 101 TFEU because it conspired to impede the actions of groups of laboratories on the market, which may have increased competition, and it imposed a minimum price policy stopping laboratories from granting discounts of more than 10%. The General Court rejected ONP’s argument that it was merely implementing French law.

Noteworthy