Category Archives: EU Banking & Financial Law

Vers une européanisation du contentieux prudentiel bancaire dans la Zone Euro

Jugement
C-219/17
19.12.2018
PartiesJuridictionFormationJuge RapporteurAvocat GénéralSujet
Renvoi préjudicielSilvio Berlusconi, Finanziaria d’investimento Fininvest SpA (Fininvest)
contre
Banca d’Italia, Istituto per la Vigilanza Sulle Assicurazioni
Cour de JusticeGrande ChambreJ.-C. BonichotM. Campos Sánchez-BordonaSurveillance prudentielle des établissements de crédit – Contrôle juridictionnel des actes préparatoires aux décisions de la BCE adoptés par les autorités nationales
Mots-clésRenvoi préjudiciel – Rapprochement des législations – Surveillance prudentielle des établissements de crédit – Acquisition d’une participation qualifiée dans un établissement de crédit – Procédure régie par la directive 2013/36/UE ainsi que par les règlements (UE) nos 1024/2013 et 468/2014 – Procédure administrative composite – Pouvoir décisionnel exclusif de la Banque centrale européenne (BCE) – Recours introduit contre des actes préparatoires adoptés par l’autorité nationale compétente – Allégation de violation de l’autorité de la chose jugée s’attachant à une décision nationale
RésuméLe 19 décembre 2018, la Cour de justice de l’Union européenne (CJUE), réunie en grande chambre, a, dans l’affaire C-219/17, retenu la compétence exclusive des juridictions européennes pour contrôler la légalité des actes d’ouverture, préparatoires ou des propositions non contraignantes adoptés par les autorités compétentes nationales (ACN) en vue de permettre à la Banque centrale européenne (BCE) de statuer sur les projets d’acquisition de participations qualifiées dans un établissement de crédit dans le cadre du Mécanisme de Surveillance Unique (MSU).

Pour rappel, par dérogation au principe selon lequel la BCE n’exerce la supervision que des banques importantes, elle a trois compétences exclusives de décisions à l’égard de toutes les banques des Etats membres faisant partie du MSU, à savoir, pour l’instant, les Etats membres de la zone Euro, qu’elle exerce après un travail préparatoire de l’ACN concernée : l’agrément, son retrait, le nihil obstat ou l’opposition à l’acquisition ou au renforcement d’une participation qualifiée dans le capital d’un établissement de crédit.

A la suite d’une restructuration, la holding contrôlée par Silvio Berlusconi s’est retrouvée titulaire d’une participation qualifiée dans un établissement de crédit. Compte tenu de la condamnation de Silvio Berlusconi pour fraude fiscale, la Banque nationale d’Italie a émis des objections tenant au manque d’honorabilité de celui-ci. La holding a notamment agi en annulation de cette prise de position devant le Conseil d’Etat italien qui a interrogé la CJUE sur les compétences respectives des juridictions nationales et européennes pour connaître d’un tel recours.

La CJUE a fondé la compétence exclusive des juridictions européennes dans un tel contentieux notamment sur le pouvoir décisionnel exclusif de la BCE et la compétence exclusive des juridictions européennes pour contrôler la légalité des actes des institutions de l’Union. Elle a souligné à cet égard que ceux-ci englobent les actes dans l’élaboration desquelles interviennent des autorités nationales pour autant que la décision finale soit adoptée seulement par une institution de l’Union et que celle-ci ne soit pas liée par les actes préparatoires ou les propositions émanant des autorités nationales ou ne dispose pas que d’une marge d’appréciation limitée.

La protection juridictionnelle effective des intéressés commande que la juridiction européenne examine aussi les éventuels vices entachant les actes préparatoires ou les propositions émanant des autorités nationales qui seraient de nature à affecter la validité de la décision finale de l’institution européenne.

Selon la CJUE, l’efficacité du processus décisionnel choisi par le législateur, qui constitue un mécanisme particulier de collaboration entre autorités nationales et une institution européenne, suppose donc nécessairement un contrôle juridictionnel unique, lequel ne peut, en outre, être exercé (par les seules juridictions européennes) qu’une fois prise la décision finale de l’institution de l’Union. En effet, seule cette dernière est susceptible de produire des effets de droit obligatoires de nature à affecter les intérêts du requérant, en modifiant de façon caractérisée sa situation juridique, les actes adoptés par l’ACN étant simplement préparatoires. En outre, la coexistence de voies de recours nationales à l’encontre des actes préalables des autorités des Etats membres dans ce type de procédure serait susceptible de mener à des divergences d’appréciation dans une même procédure et, partant, de compromettre la compétence exclusive des juridictions européennes pour statuer sur la légalité de cette décision finale.

En revanche, lorsque les actes des autorités nationales lient l’institution européenne ou ne lui laissent qu’une marge d’appréciation limitée, leur contrôle incombe aux juridictions nationales. La protection juridictionnelle effective des justiciables commande à cet égard que des recours nationaux soient recevables, quand bien même les règles de procédure nationales ne le prévoiraient pas.
CommentaireL’arrêt dans l’affaire C-219/17 comble une lacune du MSU : l’incidence des compétences de la BCE sur le contrôle juridictionnel des actes des ACNs préalables à ses propres décisions. Le MSU est largement fondé sur une répartition des tâches entre les ACNs et la BCE, les premières étant en charge du travail préparatoire lorsque la seconde doit intervenir. De la sorte, la BCE, qui est une jeune autorité prudentielle, peut bénéficier de l’expertise accumulée par les ACNs, sans parler de leur compétence spécifique quant à la connaissance et la compréhension du droit national transposant les directives bancaires.

Les conséquences de cet arrêt - dont la solution est à approuver sur le plan des principes – sont substantielles. Une série d’interventions préliminaires des ACNs dans la supervision des banques importantes ou relatives à la procédure d’agrément, de retrait d’agrément ou d’opposition à des prises de participation qualifiées dans toutes les banques de la zone euro relèveront désormais de la compétence exclusive du Tribunal de l’Union européenne et, sur pourvoi de la CJUE. Elles ne seront dès lors plus susceptibles de recours en annulation ou en réformation devant les juridictions administratives nationales. Toutefois, une approche au cas par cas sera nécessaire afin de déterminer la portée de ces actes préliminaires. Par exemple, en ce qui concerne la procédure d’agrément, l’avocat général a bien souligné que la situation était différente, l’ACN pouvant décider de ne pas transmettre une demande d’agrément quand elle l’estime contraire au droit national. Une telle prise de position est définitive.

Il faudra donc procéder à une analyse au cas par cas de la portée des actes préalables à décision de la BCE des ACNs, ce qui, à première vue, n’est pas, au moins dans un premier temps, un gage de sécurité juridique pour les justiciables. Il n’est pas exclu que la CJUE soit saisie de nouvelles questions préjudicielles sur les compétences respectives des juridictions européennes et nationales dans le cadre du MSU et doive continuer à parachever l’œuvre du législateur, qui a dû être élaborée en peu de temps dans des conditions de crise aiguë.

Est-ce la délicatesse politique de la question – l’exclusion de la compétence des juridictions nationales vis-à-vis des actes purement préparatoires des ACNs dans le silence du règlement MSU - la CJUE semble embarrassée. Sa motivation est tourmentée, hésitant entre plusieurs majeures. Elle aurait pu se contenter d’étendre à ce cas de coopération particulière entre les ACNs et la BCE sa jurisprudence traditionnelle sur les actes de droit européen élaborés en plusieurs phases. Elle s’est sentie obligée de solliciter en outre l’effet utile du MSU de même que la protection juridictionnelle effective voire de manière gratuite le principe de coopération loyale entre Etats et institutions. Les conclusions de l’avocat général étaient plus linéaires et limpides. Il est vrai que, à la différence du juge rapporteur, celui-là n’a pas à composer avec les sensibilités de 12 autres juges voire au désir irrépressible de certains de « tenter d’enrichir le projet d’arrêt », pour reprendre l’expression d’un ancien éminent membre de la Cour.

Il n’en reste pas moins que l’arrêt présente quelques faiblesses coupables. Le principe de la compétence exclusive des juridictions européennes n’est envisagé que dans la seule hypothèse d’un acte final adopté par une institution de l’Union européenne. C’est oublier les organismes européens dont les actes sont soumis au même régime de contrôle juridictionnel. La question est loin d’être théorique, par exemple, en ce qui concerne les Autorités européennes de surveillance, pour rester dans le secteur financier. Est également à déplorer l’affirmation selon laquelle « L’article 22 de la directive CRD IV, qui prévoit, au nom du bon fonctionnement de l’Union bancaire, une autorisation préalable à toute acquisition ou augmentation de participations qualifiées dans les établissements de crédit ». La proposition contient une erreur de fond et est empreinte d’un anachronisme. D’abord, le mécanisme n’est pas une autorisation mais une opposition préalable. Ensuite et surtout, cette disposition figurait déjà dans la deuxième directive bancaire en 1989, près d’un quart de siècle avant la naissance de l’Union bancaire. L’invocation de celle-ci comme justification de ce contrôle est un anachronisme et une notation ornementative dont la plus-value peut être mise en doute. La sollicitation gratuite du principe de coopération loyale a déjà été mentionnée.

EU court jurisdiction over prudential oversight of the banking sector in the Eurozone

Judgment
C-219/17
19.12.2018
PartiesCourtChamberJudge RapporteurAdvocate GeneralSubject-matter
Preliminary rulingSilvio Berlusconi, Finanziaria d’investimento Fininvest SpA (Fininvest)
v
Banca d’Italia, Istituto per la Vigilanza Sulle Assicurazioni
Court of JusticeGrand ChamberJ.-C. BonichotM. Campos Sánchez-BordonaSupervision of credit institutions – Judicial review of preparatory acts adopted by national authorities for ECB decisions
KeywordsReference for a preliminary ruling – Approximation of laws – Prudential supervision of credit institutions – Acquisition of a qualifying holding in a credit institution – Procedure governed by Directive 2013/36/EU and by Regulations (EU) No 1024/2013 and No 468/2014 – Composite administrative procedure – Exclusive decision-making power of the European Central bank (ECB) – Action brought against preparatory acts adopted by the national competent authority – Claim that the force of res judicata attaching to a national decision has been disregarded
Significant pointsOn 19 December 2018, the Court of Justice of the European Union (CJUE), in a Grand Chamber judgment, held in case C-219/17 that the EU courts had exclusive jurisdiction to review the legality of decisions to initiate procedures, preparatory acts and non-binding proposals adopted by national competent authorities (NCAs) in order to enable the European Central Bank (ECB) to rule on proposed acquisitions of qualifying holdings in a credit institution under the Single Supervisory Mechanism (SSM).

As a reminder, by way of derogation from the principle that it only supervises major banks, the ECB has three exclusive decision-making powers with regard to all banks in Member States that are part of the SSM (at the moment the Member States of the Eurozone). The ECB exercises this competence after preparatory work by the relevant NCA: authorisation, withdrawal, nihil obstat or opposition to the acquisition or reinforcement of a qualifying holding in the capital of a credit institution.

Following a restructuring, the holding company controlled by Silvio Berlusconi became the owner of a qualifying holding in a credit institution. In view of Silvio Berlusconi's previous conviction for tax fraud, the National Bank of Italy raised objections as regards his honourability. The holding company then sought the annulment of the National Bank’s decision before the Italian Council of State, which questioned the CJEU on the respective areas of competence of national and EU courts to hear such an appeal.

The CJEU notably based the exclusive jurisdiction of the EU courts to hear such a dispute on the exclusive decision-making power of the ECB and the exclusive jurisdiction of the EU courts to review the legality of acts of EU institutions. In this respect, it stressed that these acts include acts where national authorities are involved provided that the final decision is adopted by an EU institution and that the latter is not bound by the preparatory acts or proposals of the national authorities and does not have only limited discretion.

The principle of effective judicial protection requires EU courts to also examine potential defects in the preparatory acts or proposals made by the national authorities which might affect the validity of the EU institution's final decision.

According to the CJEU, the effectiveness of the decision-making process chosen by the legislator, which involves close collaboration between national authorities (NCAs) and an EU institution, necessarily requires a single judicial review, which can only be exercised once the final decision of the EU institution has been adopted and by the EU courts. Indeed, only this type of decision may produce binding legal effects capable of affecting the applicant's interests, by changing his or her legal situation in a significant way. By contrast, the acts adopted by the NCA are merely preparatory. In addition, the coexistence of national remedies against preparatory acts of NCAs in this type of procedure would be likely to lead to divergent assessments in the same procedure and, consequently, to compromise the exclusive competence of the EU courts to rule on the legality of the final decision.

On the other hand, where the acts of the national authorities are binding on the EU institution or leave it only limited discretion, it falls upon national courts to review these acts. In this respect, the right to effective judicial protection requires that national remedies be admissible, even if national procedural rules do not provide for it.
CommentaryThis judgment fills a gap in the SSM: the impact of the ECB's powers on the judicial review of NCAs’ preparatory acts for ECB decisions. The SSM is largely based on an allocation of tasks between the NCAs and the ECB, the former being in charge of the preparatory work when the latter is set to act. In this way, the ECB, which is a young prudential authority, can benefit from the NCAs’ expertise, not to mention their specific competence in terms of knowledge and understanding of national law transposing banking directives.

The consequences of this judgment - the solution of which is to be approved in principle - are substantial. A series of preliminary interventions by NCAs in the supervision of major banks or relating to the procedure for granting, withdrawing or opposing qualified equity investments in all banks in the euro area will now fall within the exclusive competence of the General Court and, on appeal, of the CJEU. They will therefore no longer be subject to actions for annulment or reversal before national administrative courts. However, a case-by-case analysis will be required to determine the scope of these preliminary acts. For example, with regard to the accreditation procedure, the Advocate General made it clear that the situation was different as the NCAs could decide not to submit an application for accreditation when it considered it contrary to national law. Such a position is final.

It will therefore be necessary to carry out a case-by-case analysis of the scope of the preparatory acts adopted by the NCAs for ECB decisions, which, at first sight, is not a guarantee of legal certainty. It is not excluded that new preliminary questions be referred to the CJEU regarding the respective fields of competence of EU and national courts within the framework of the SSM and that the Court will have to continue to complete the work of the legislator, which had to be drawn up in a short period of time and under conditions of acute crisis.

While this may be due to the political sensitivity of the issue (i.e. the exclusion of the jurisdiction of national courts over purely preparatory acts of NCAs given the silence of the SSM Regulation), the CJEU seems embarrassed. Its reasoning appears a little convoluted, hesitating between several approaches. It could have simply extended its traditional case law on EU legal acts developed in several phases to this case of particular cooperation between NCAs and the ECB. But it felt obliged to resort to the useful effect of the SSM as well as the principle of effective judicial protection, or even the principle of loyal cooperation between States and institutions. The Advocate General's submissions were more linear and clear. It is true that, unlike the Reporting Judge, the Advocate General does not have to deal with the sensitivities of 12 other judges or even with the irrepressible desire of some to "try to enrich the draft judgment", to use the expression of a former eminent member of the Court.

In addition, the judgment presents some culpable weaknesses. The principle of exclusive jurisdiction of EU courts is only envisaged in the sole case of a final act adopted by an EU institution. This omits the acts of EU bodies which are subject to the same system of judicial control. The question is far from theoretical, for example, as regards the European Supervisory Authorities. Moreover, the claim that Article 22 CRD IV provides for the prior authorisation of any acquisition or increase in qualifying holdings in credit institutions in the name of the proper functioning of the Banking Union may also be criticised. The proposal contains a fundamental error and is marked by an anachronism. First, the mechanism is not an authorisation but a prior opposition. Secondly and above all, this provision was already included in the Second Banking Directive in 1989, almost a quarter of a century before the birth of the Banking Union. The use of the latter as justification for this judicial control is an anachronism and a superfluous statement whose added value can be questioned. The invocation of the principle of loyal cooperation has already been mentioned.

Obligation de confidentialité des autorités de surveillance prudentielle : droits de la défense et droit au recours effectif remparts contre l’arbitraire

Jugement

C-358/16

13.09.2018

Parties

Juridiction

Formation

Juge Rapporteur

Avocat Général

Sujet

UBS Europe SE, anciennement UBS (Luxembourg) SA, Alain Hondequin e. a.

CJUE

5e Ch.

R. Silva de Lapuerta

J. Kokott

MiFID

– Secret professionnel

 

Mots-clés

Renvoi préjudiciel – Directive 2004/39/CE – Article 54, paragraphes 1 et 3 – Portée de l’obligation de secret professionnel des autorités nationales de surveillance financière – Décision constatant la perte de l’honorabilité professionnelle – Cas relevant du droit pénal – Charte des droits fondamentaux de l’Union Européenne – Article 47 et 48 – Droits de la défense – Accès au dossier

Résumé

Dans cet arrêt rendu sur questions préjudicielles posées par la Cour administrative luxembourgeoise, la Cour de justice de l’Union européenne (la « Cour ») interprète la notion de « cas relevant du droit pénal », une hypothèse dans laquelle les autorités nationales de surveillance financière sont libérées de leur obligation au secret professionnel, prévue par l’article 54 de la Directive 2004/39/CE sur les  marchés d’instruments financiers, dite MiFID.  La Cour se prononce également sur une  autre dérogation potentielle à cette obligation au  secret professionnel, fondée sur le droit à un recours juridictionnel effectif et le respect des droits de la défense, prévus respectivement aux articles 47 et 48 de la Charte des droits fondamentaux de l’Union européenne.

La Commission de Surveillance du Secteur Financier (la « CSSF »), qui est l’autorité luxembourgeoise compétente en matière de surveillance financière, a considéré que M. DV manquait d’honorabilité, à la suite de sa participation dans la constitution et la gestion de la société Luxalpha (impliquée dans le scandale Madoff). Elle l’a dès lors contraint de démissionner de tous ses mandats d’administrateurs  de sociétés du secteur financier soumis à l’agrément de la CSSF.

M.DV a introduit un recours contre cette décision. Il a également demandé à la CSSF d’obtenir à l’accès à certains documents en sa possession, qui, selon M.DV sont à décharge et de nature à étayer son recours contre la décision litigieuse. La CSSF lui ayant opposé son obligation au secret professionnel prévue à l’article 54 de MiFID, M.DV a introduit un recours contre cette décision. Tant le Tribunal administratif luxembourgeois que la Cour administrative luxembourgeoise lui ont donné gain de cause. Notamment, selon la Cour administrative, un tel refus se rapporte à une sanction administrative qui relève de la matière pénale au sens de la Convention européenne des droits de l’homme (CEDH).  Toutefois, à la suite d’une tierce opposition d’UBS., qui, estime que la décision de la Cour violait l’article 54 de MiFID, la Cour administrative luxembourgeoise a décidé de surseoir à statuer et de poser les deux questions préjudicielles évoquées ci-dessus à la Cour.

Concernant la première question préjudicielle, en l’absence de définition dans la directive des termes « des cas relevant du droit pénal », la CJUE se réfère au contexte et aux objectifs de la directive.

Elle explique à cet égard que, dans le contexte d’activités transfrontalières croissantes, MiFID a mis en place un mécanisme d’échanges d’informations entre autorités compétentes des Etats membres. Ainsi que souligné dans l’arrêt récent Baumeister (19 juin 20018, C-15/16) un tel mécanisme requiert, pour son bon fonctionnement, la garantie de la confidentialité.

Dès lors, le secret professionnel des autorités de surveillance a pour but, selon la Cour, de protéger, d’une part, les intérêts des entreprises concernées et, d’autre part, « l’intérêt général lié au fonctionnement normal des marchés d’instruments financier de l’Union » (§37). Consécutivement, la Cour considère que le secret professionnel est un principe général qui ne souffre que des exceptions exhaustivement énoncées à l’article 54. Comme on le verra, elle sera toutefois amenée à tempérer cette affirmation dans la réponse à la seconde question.

En outre, constituant une exception au principe de la confidentialité, la réserve des « cas relevant du droit pénal » doit être interprétée strictement. Selon la Cour, cette dérogation au principe de la confidentialité a pour but de permettre aux autorités de surveillance de transmettre toutes les informations nécessaires aux fins de poursuites pénales et de sanctions pénales, conformément au droit pénal national.

Enfin, la Cour considère que la constatation qu’une personne ne remplit plus le critère d’honorabilité requis et les conséquences qui en découlent font partie de la procédure de retrait d’agrément. Il ne s’agit ni d’une sanction administrative au sens de l’article 51 de MiFID ni d’un cas relevant du droit pénal au sens de l’article 54 de MiFID.

Concernant la seconde question préjudicielle, la Cour considère qu’il y a lieu de déterminer dans quelle mesure l’obligation de secret professionnel des autorités nationales de surveillance peut être atténuée par les exigences du droit à un recours effectif, à un procès équitable et par le respect des droits de la défense en vertu des articles 47 et 48 de la Charte de l’Union européen des droits fondamentaux lu en combinaison avec les article 6 et 13 de la CEDH.

A titre liminaire, la Cour rappelle que les articles 47 et 48 ont la même portée et offre la même protection que celle prévue par les articles 6 et 13 CEDH et qu’il convient dès lors d’appliquer les articles 47 et 48. Par ailleurs, la Cour rappelle le principe selon lequel, la Charte est pleinement applicable dans toutes les matières régies par le droit de l’Union européenne comme celle au principal qui porte sur l’application de la Directive MiFID.

Tout d’abord, la Cour rappelle le principe d’interprétation conforme selon lequel un acte de l’Union doit être interprété d’une manière qui ne remet pas en cause sa validité et sa conformité avec les droits fondamentaux (Arrêt du 15 février 2016, N., C-601/15 PPU, EU:C:2016;84, point 48).

Abordant l’article 47 de la Charte, relatif au droit à un recours effectif, la Cour rappelle qu’il a pour but de protéger le justiciable contre « des interventions de la puissance publique dans la sphère privée qui seraient arbitraires ou disproportionnées » et que » cette protection peut être invoquée par un administré contre un acte lui faisant grief » (§56). La Cour explique  également que le droit à un procès équitable implique l’obligation de respecter les droits de la défense qui impliquent à leur tour l’accès au dossier afin de garantir un exercice effectif des droits de la défense.

Cependant, la Cour rappelle que les droits fondamentaux ne sont pas absolus et peuvent être tempérés en vue de concilier des objectifs d’intérêt général, tel que le bon fonctionnement des marchés, sans pour autant pouvoir vider ces droits de leur substance.

Enfin, la Cour, après avoir rappelé que le droit d’accès au dossier implique l’accès à l’ensemble des éléments du dossier, qu’il n’appartient pas à l’autorité de déterminer les documents utiles à la défense, mais qu’elle peut exclure du dossier des éléments sans pertinence- ce qui est un peu chèvre-choutiste – affirme que le droit d’accès au dossier doit être mis en œuvre de façon à le concilier avec la protection des informations confidentielles (en l’occurrence des informations (i) non publiques ou (ii) dont la divulgation porteraient atteinte à la personne concernée ou au bon fonctionnement des marchés financiers).

Pour ce faire, la Cour affirme qu’il revient au juge national de déterminer si les informations demandées ont un lien objectif avec les griefs retenus et de trouver un équilibre entre, d’une part, la nécessité de garantir les droits de la défense et de donner consécutivement accès au dossier et, d’autre part, la protection de l’intérêt général lié au bon fonctionnement des marchés financiers.

A retenir

Si la Cour considère que la Cour administrative luxembourgeoise a manqué de justesse juridique en retenant une conception trop large de la notion de cas relevant du droit pénal, elle estime toutefois que la décision de la Cour administrative luxembourgeoise est correcte d’un point de vue de la justice substantielle.

En effet elle admet que les droits fondamentaux peuvent justifier une dérogation au principe de confidentialité si l’intérêt de l’administré doit dans le cas d’espèce, primer sur l’intérêt général lié au bon fonctionnement de la coopération entre les autorités de supervisions, dans des litiges ne relevant pas du droit pénal au sens strict du terme.

La Cour place donc le juge national dans le rôle d’arbitre entre d’un côté les droits fondamentaux qui protège l’administré contre l’arbitraire de la puissance publique et l’intérêt général en l’espèce celui lié au bon fonctionnement des marchés financiers.

Le juge national devra, conformément à cet arrêt lu en combinaison avec l’arrêt C-15/16 Baumeister, récemment présenté dans le blog, suivre le schéma de raisonnement suivant :

  1. Est-ce que l’information est confidentielle (est-elle non publique, est-ce que sa divulgation va porter atteinte à la personne concernée ou au bon fonctionnement des marchés financiers) ?
  2. Si oui, est-ce qu’il existe un lien objectif entre l’information demandée et la décision faisant grief ?
  3. Si oui, est-ce que, en l’espèce, la balance des intérêts en jeu penche en faveur du secret professionnel ou des droits de la défense ?

A cet égard, on peut regretter que la Cour n’ait pas donné plus d’indication au juge national sur le moyen d’opérer cette mise en balance. On observe toutefois la même prudence et le même flou de la CJUE en ce qui concerne l’accès des victimes de violations du droit de la concurrence au dossier devant l’autorité de la concurrence, dans la recherche d’un équilibre entre le private et le public enforcement.  Il revient dès lors à la juridiction nationale de se faire sa propre opinion et de prendre en considération les facteurs qui lui semble les plus opportuns, comme la gravité de la sanction, les faits, la mesure dans laquelle la bonne coopération entre les autorités de contrôle pourrait être mise à mal par la communication d’un document,  etc…

Il appartiendra donc à la Cour administrative de prolonger l’œuvre prétorienne de la CJUE dans la pesée des intérêts en cause, en prenant en compte toutes les circonstances de l’espèce, voire en affinant les lignes directrices de la CJUE. Le dialogue entre le juge national et la CJUE prend donc la forme d’une valse à trois temps, en attendant les prochains renvois préjudiciels ou une révision de l’article 54 de MiFID.

Bien que ce raisonnement doive être appliqué par les juges, les autorités nationales de surveillance devront aussi le garder à l’esprit et faire leur propre analyse et motiver leurs décisions en tenant compte de ce schéma sous peine de voir leurs décisions annulées par les juridictions de contrôle.

Enfin, il important de souligner la réaffirmation de l’applicabilité de la Charte à des matières européanisées, telles que la quasi-totalité du droit bancaire et financier, même lorsque le droit européen est mis en œuvre par le droit national et à l’échelon national. En particulier, l’article 47 de la Charte s’applique à tout droit découlant du droit de l’Union. Par contre, l’article 48 de la Charte a un champ d’application plus limité étant donné qu’il s’applique aux matières relavant du champ pénal au sens de la CEDH.

 

Confidentiality duty of national supervisory authorities: rights of defence and right to a fair trial as safeguards against arbitrary conduct

Judgment

C-358/16

13.09.2018

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

UBS Europe SE, formerly know as UBS (Luxembourg) SA, Alain Hondequin e. a.

CJEU

5th Ch.

R. Silva de Lapuerta

J. Kokott

MiFID

– Profesionnal secrecy

 

Key-words

Reference for a preliminary ruling — Directive 2004/39/EC — Article 54(1) and (3) — Scope of the obligation of professional secrecy on national financial supervisory authorities — Finding of the absence of good repute — Cases covered by criminal law — Charter of Fundamental Rights of the European Union — Articles 47 and 48 — Rights of the defence — Access to the file

Summary

In this judgment on preliminary questions referred by the Luxembourg Administrative Court of Appeal, the Court of Justice of the European Union (the “Court”) interpreted the concept of “criminal law cases”, in which national financial supervisory authorities are released from their obligation of professional secrecy, provided for by Article 54 of Directive 2004/39/EC on markets concerning financial instruments (“MiFID”). The Court also ruled on another potential derogation from this obligation of professional secrecy, based on the right to an effective judicial remedy and respect for the rights of defence, provided for by Articles 47 and 48 respectively of the Charter of Fundamental Rights of the European Union.

The Commission de Surveillance du Secteur Financier (the “CSSF”), which is the Luxembourg authority competent for supervision of the financial sector, considered that Mr DV lacked good repute, following his participation in the formation and management of Luxalpha (involved in the Madoff scandal). It therefore forced him to resign from all his mandates as director of companies in the financial sector subject to the approval of the CSSF.

Mr DV requested that the CSSF withdraw this decision. He also asked the CSSF to grant him access to certain documents in its possession, which, according to Mr DV, were exculpatory and likely to support his appeal against the contested decision. As the CSSF raised its obligation of professional secrecy provided for by Article 54 of MiFID, Mr DV lodged an appeal against that decision before the Luxembourg courts. Both the Luxembourg Administrative Court and the Luxembourg Administrative Court of Appeal have ruled in his favour. In particular, according to the Administrative Court of Appeal, such a refusal relates to an administrative sanction which falls within the criminal field within the meaning of the European Convention on Human Rights (ECHR). However, following a third party opposition from UBS, which considers that the Court’s decision violated Article 54 of MiFID, the Luxembourg Administrative Court of Appeal decided to stay the proceedings and to refer the two preliminary questions mentioned above to the Court.

With regard to the first question referred for preliminary ruling, in the absence of a definition in MiFID of the terms “criminal law cases”, the ECJ referred to the context and objectives of the Directive.

In this respect, it explained that, in the context of increasing cross-border activities, MiFID has set up a mechanism for the exchange of information between the competent authorities of the Member States. As underlined in the recent Baumeister judgment (19 June 2018, C-15/16), such a mechanism requires, for its proper functioning, the guarantee of confidentiality.

Consequently, the purpose of the professional secrecy obligation incumbent upon supervisory authorities is, according to the Court, to protect, on the one hand, the interests of the undertakings concerned and, on the other hand, “the general interest linked to the normal functioning of the Union’s markets in financial instruments” (§38). Consequently, the Court considered that professional secrecy is a general principle which is subject only to the exhaustive exceptions set out in Article 54; as will be explained below, however, it tempered this statement in the answer to the second question.

In addition, as an exception to the principle of confidentiality, the reservation of “criminal law cases” must be strictly interpreted. According to the Court, the purpose of this derogation from the principle of confidentiality is to enable the supervisory authorities to transmit all the information necessary for the purposes of criminal proceedings and criminal sanctions, in accordance with national criminal law.

Furthermore, as an exception to the principle of confidentiality, the reservation of “criminal law cases” must be strictly interpreted. According to the Court, the purpose of this derogation from the principle of confidentiality is to enable the supervisory authorities to transmit all the information necessary for the purposes of criminal proceedings and criminal sanctions, in accordance with national criminal law.

Thus, the derogation from professional secrecy provided for by Article 54 does not apply in the present case, contrary to what had been decided by the national courts, and must be limited to cases involving the transmission of information in the context of criminal proceedings or sanctions, in accordance with national criminal law.

Regarding the second question referred for preliminary ruling, the Court considered that it is necessary to determine to what extent the obligation of professional secrecy of national supervisory authorities can be mitigated by the requirements stemming from the rights to an effective remedy, a fair trial and of defence under Articles 47 and 48 of the Charter of the European Union of Fundamental Rights in conjunction with Articles 6 and 13 of the ECHR.

As a preliminary remark, the Court recalled that Articles 47 and 48 have the same scope and offer the same protection as the one provided for by Articles 6 and 13 ECHR and that Articles 47 and 48 should therefore be applied. In addition, the Court recalled that the Charter is fully applicable in all matters governed by European Union law, such as the one in the main proceedings, regarding the application of MiFID.

The Court then recalled the principle of consistent interpretation according to which a Union act must be interpreted in a manner which does not call into question its validity and conformity with fundamental rights (judgments of 15 February 2016, N., C-601/15 PPU, EU:C/2016;84, paragraph 48).

Referring to Article 47 of the Charter, which concerns the right to an effective remedy, the Court recalled that its purpose is to protect individuals from “arbitrary or disproportionate interventions by public authorities in the private sphere” and that “this protection may be invoked by a citizen against an act adversely affecting him” (§56). The Court also explained that the right to a fair trial implies the obligation to respect the rights of defence, which in turn implies access to the file in order to guarantee an effective exercise of those rights.

However, the Court pointed out that fundamental rights are not absolute and can be tempered in order to reconcile objectives of general interest, such as the proper functioning of markets, without depriving these rights of their substance.

Finally, the Court stated that the right of access to the file must be implemented in such a way as to reconcile it with the protection of confidential information (in this case, (i) non-public information or (ii) information whose disclosure would harm the person concerned or the proper functioning of the financial markets). It made this statement after having pointed out that the right of access to the file implies access to all the information in the file and that it is not for the authority to determine the documents relevant to the defence despite also saying that it may exclude irrelevant elements from the file (this is rather sitting on the fence).

To that end, the Court stated that it is for the national court to determine whether the information requested has an objective link with the objections raised and to strike a balance between on the one hand the need to guarantee the rights of the defence and subsequently to grant access to file and on the other hand the protection of the general interest linked to the proper functioning of financial markets.

Noteworthy

While the Court considered that the Luxembourg Administrative Court has failed to achieve legal correctness by adopting an overly broad concept of criminal law case, it nevertheless considered that the decision of the Luxembourg Administrative Court is correct from a substantive justice point of view.

Indeed, the Court accepted that fundamental rights may justify a derogation from the confidentiality obligation if the interest of the citizen concerned must prevail over the general interest linked to the proper functioning of cooperation between supervisory authorities, in litigation which does not fall within the scope of criminal law, stricto sensu.

The Court therefore places the national judge in the role of arbitrator between, on the one hand, the fundamental rights which protect the citizen against the arbitrariness of public power and, on the other, the general interest in this case that linked to the proper functioning of financial markets.

The national courts, in accordance with the principles established in this judgment and those established in the Baumeister judgement (19 June 2018,C-15/16), recently commented on this blog, must follow the following reasoning:

  1. Is the information confidential (is it a non-public; will its disclosure harm the person concerned or the proper functioning of financial markets)?
  2. If so, is there an objective link between the information requested and the harmful decision involved?
  3. If so, does the balance of interests in the individual case lean towards professional secrecy or the rights of the defence?

In this respect, it is regrettable that the Court did not give further guidance to the national court on how to carry out this balancing act. However, the same caution and blurring can be observed by the Court with the regard to the access of victims of competition law infringements to a competition authority’s time for the purposes of damages actions (a search for a balance between private and public enforcement). It is therefore for the national court to make its own opinion and to take into consideration the factors which it considers most appropriate such as the seriousness of the sanction, facts, extent to which good cooperation between the supervisory authorities could be impaired by the communication of a document etc.

It will therefore be for the Luxembourg Administrative Court of Appeal to extend the Praetorian work of the Court in weighing up the interests at stake, taking into account all the circumstances of the case and even refining the Court’s guidelines. The dialogue between the national judge and the Court therefore takes the form of a three-beat waltz pending the next preliminary ruling or a revision of Article 54 MiFID.

Although this reasoning must be applied by national judges, national supervisory authorities must also bear it in mind when making their own analysis and justify their decisions taking into account this objective. Otherwise their decisions will be overruled by the courts upon judicial review.

Finally, it is important underline the reaffirmation of the applicability of the Charter to EU-related law, such as almost all banking and financial law even when EU law has been implemented by national law and at national level. In particular, Article 47 Charter applies to all rights arising from the EU law. In contrast, Article 48 Charter applies only to the fields which fall under criminal law within the meaning of the ECHR.

 

EU banking and financial law: the EUCJ opens the way to accessing certain information held by national competent authorities

Judgment
C-15/16
19.06.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Preliminary rulingBundesanstalt für Finanzdienstleistungsaufsicht
v
Ewald Baumeister
Court of JusticeGrand ChamberJ.L. da Cruz VilaçaY.BotFinancial Services (MiFID) –
Scope of the obligation of professional secrecy on national financial supervision authorities
KeywordsDirective 2004/39/EC (MiFID) — Article 54(1) — Scope of the obligation of professional secrecy on national financial supervision authorities — Concept of ‘confidential information’
Significant pointsA reference for preliminary rule by the EUCJ was made by the Bundesverwaltungsgericht (Federal Administrative Court, Germany) in a case concerning the access to documents related to a financial operator contained in the file of the German Financial Supervisory Authority.

Mr. Baumeister was a client of Phoenix, a financial operator whose business model took the form of a Ponzi scheme. As a result, he suffered loss. In the context of the judicial liquidation of Phoenix, Mr. Baumeister requested the Federal Financial Supervisory Authority of Germany (the “FFSA”) to grant him access to the documents concerning Phoenix. The FFSA refused, arguing that such documents were confidential pursuant to Article 9(1) of the KWG implementing Article 54(1) of Directive 2004/39/EC (MiFID I). Mr. Baumeister then brought an action against this refusal before the Administrative Court of Frankfurt. The Administrative Court duly granted access to the documents except those containing trade secrets and documents from the Financial Supervisory Authority. The FFSA appealed the judgement before the Higher Administrative Court of Hesse, which dismissed the appeal. The FFSA then appealed the judgment of the Higher Administrative Court on a point of law before the Federal Administrative Court. The Federal Administrative Court decided to refer the case to the EUCJ in order to have its interpretation of Article 54(1) MiFID I.

By its first question, the Federal Administrative Court wanted to know if, pursuant to Article 54(1) MiFID, information in possession of the national competent authority (“NCA”) relating to a financial operator must be regarded automatically as confidential and if this is not the case, what are the criteria to assess whether information is confidential or not.

After having pointed out the lack of a definition of what amounts to confidential information under Article 54(1) MiFID I, the EUCJ stated that, due to the absence of any reference to national law to provide guidance on its interpretation (paragraphs 22-23), this notion should be interpreted independently and uniformly throughout the EU (paragraph 24).

In this respect, the EUCJ observed that Article 54(1) MiFID I refers to “confidential information” and not to “information” and accordingly deducted that there is information which is confidential and other information which is not confidential (paragraph 25).

Then, the EUCJ set out that MiFID I has created a framework for the supervision of investment firms based on the home country control principle (with all the necessary powers for NCAs to ensure proper supervision, notably the right to have access to any document and to demand information from any person) and for the exchange of information between NCAs. To work properly, such a framework requires that confidential information provided to the NCA by the supervised entities and exchanged between NCAs remains confidential (paragraph 31).

The Court also stated that the general confidentiality obligation on NCAs applies to information which is on the one hand not public and on the other hand would be detrimental to the person who provided the information or a third party or the proper functioning of the market being supervised (paragraph 35). This is to the extent that other information is not covered by a stricter confidentiality provision (paragraph 36), like the confidentiality granted to the information exchanged between NCAs (paragraph 37).

In addition, the Court explained that the aim of Article 54(1) MiFID I is not to create a general rule of access to documents but a general non-disclosure rule for confidential information with strictly applied and limited exceptions (paragraphs 38-39). Consequently, NCAs may grant access to confidential information only in the cases listed in Article 54 MiFID I (paragraph 43).

Finally, the Court stated that Member States are free to extend the confidentiality obligation or to authorise the disclosure of non-confidential information held by NCAs (paragraph 45).

By its second question, the Federal Administrative Court wanted to know if the classification as confidential information depends on the date of transmission and its classification at that time.

The EUCJ explained that the passage of time may influence the assessment on whether or not information held by a NCA must be qualified as confidential (paragraph 49). Therefore, the EUCJ stated that this assessment must be done at the time of the disclosure request, independently of its qualification when it was received (paragraph 50).

By its third question, the Federal Administrative Court wanted to know if a business secret or any other category of confidential information may be disqualified as business secret after a period of five years.

First, the EUCJ recalled that the protection of business secrets is a general principle of EU law (paragraph 53).

Second, the EUCJ referred to its case law (C-162/15 Evonik Degussa v. Commission) where it has already stated that information that constituted a business secret may, due to the passage of time, notably a period of five years, be disqualified as business secret, except if the concerned party shows that this information still constitutes a business secret despite its age.

Nonetheless, the EUCJ specified the passage of time consideration (mentioned above) must not be applied “to information held by the competent authorities the confidentiality of which might be justified for reasons other than the importance of that information with respect to the commercial position of the undertakings concerned, such as, in particular, information relating to the supervision methodology and strategy employed by the competent authorities” (paragraph 56).
NoteworthyThis judgment is important as it clarifies the scope of the confidentiality obligation on the national authorities competent for the supervision of financial services providers.

According to the EUCJ judgement, this confidentiality obligation is not absolute as not all information received is confidential.

The Court also stressed the importance of the time factor as it may have an impact on the qualification of information as confidential or as a business secret. Indeed a period of time of five years may disqualify information initially held by the NCA as confidential, especially a business secret. However, for other information received from another NCA, the passage of time may not be relevant.

As far as confidential information is concerned, its disclosure is restricted to the situations laid down in Article 54(1) MiFID I. The exact scope of the situations which may lead to disclosure will also be clarified by the EUCJ in the case C-358/16, which is still pending. It is interesting to note that AG Kokott has considered in her opinion in that case that access to the file of NCAs may only be granted in the case of a criminal investigation/proceeding, even where such access has been requested in the context of an action for annulment of a NCA decision sanctioning a person and the action has been brought by the sanctioned person in order to obtain exculpatory evidence. It will be interesting to see what will be the decision of the EUCJ in this case.

Member States may not derogate from respecting the confidentiality of the NCA files but may extend the confidentiality principle to information which are not confidential or to information which were confidential but have lost this qualification due to the passage of time.

NCAs, to the extent that their national law does not provide more restrictive rules, may no longer simply refuse access to their file. They will need to assess what information is confidential and what information is non-confidential depending on its nature and age. Such considerations may facilitate the access to information held by NCAs.

Furthermore, this interpretation will also be applicable to Article 76(1) of Directive 2014/65/UE (MiFID II), which has superseded MiFID I, as the wording of Article 76(1) MiFID II and Article 54(1) MiFID are identical. In addition, the interpretation of the EUCJ will also be applicable to other legislation relating the banking and financial sector which contain very similar provisions to Directive 2013/36/UE CRD IV, Directive 2009/138/CE Solvency II, Directive 2009/65/CE UCITS and Directive 2011/61/UE AIFM.

Finally, this is clearly a different approach than the one taken by the Transparency Regulation. Indeed, with Article 54(1) of MiFID I, the EU legislator has established a principle of confidentiality of the NCA files while the Transparency Regulation grants an enhanced right of access to documents of the EU institutions of.

Towards limitations to the ne bis idem principle notably in banking and financial matters : the extent to which bankers and financial operators may be exposed to the duplication of proceedings and penalties of criminal and administrative fines and other sanctions

Judgment
C-524/15 & C-537/16
20.03.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Preliminary rulingMenci ; Garlsson et al.Court of Justice Grand ChamberT. von DanwitzM. M. Campos Sánchez-BordonaNe bis in idem principle – Protection of the integrity of financial markets and public confidence in financial instruments
KeywordsReference for a preliminary ruling — Directive 2003/6/EC — Market manipulation — Penalties — Value added tax (VAT) — Directive 2006/112/EC — Failure to pay VAT due National legislation which provides for an administrative penalty and a criminal penalty for the same acts — Charter of Fundamental Rights of the European Union — Article 50 — Ne bis in idem principle — Criminal nature of the administrative penalty — Existence of the same offence — Article 52(1) — Limitations to the ne bis in idem principle — Conditions
Significant pointsThe Court of Justice delivered two judgements on the same day concerning the application of the ne bis in idem principle, which provides, pursuant to Article 50 of the Charter of Fundamental Rights of the European Union (“EU Charter”), that a person cannot be criminally prosecuted or punished twice for the same offence.

The first case (C-537/16) regarded the imposition by the Italian authority for the financial markets (“Consob”) of an administrative penalty for market abuse (Directive 2003/6) on a person who had previously been sentenced (and later pardoned) to a criminal penalty with respect to the same acts. The second case (C-524/15) regarded VAT collection, where a person liable for payment was imposed an administrative penalty by tax authorities for failing to pay VAT, and against which criminal proceedings were also brought with respect to the same acts.

Having determined in both cases that a unique offence was subject to two separate proceedings of a criminal nature (one of which being an administrative proceeding), the Court then assessed whether these limitations of the ne bis in idem principle were compatible with the EU Charter in light of Article 52 of the latter. Following the provisions of the EU Charter and a judgment delivered under the urgent preliminary ruling procedure (C-129/14 PPU Spasic) in 2014, the Court stated that any restriction of this principle must be provided for by law, respect the essence of the ne bis in idem principle and respect the following conditions:
- it must pursue an objective of general interest which is such as to justify a duplication of proceedings and penalties, it being necessary for those proceedings and penalties to pursue additional objectives;
- it must establish clear and precise rules allowing individuals to predict which acts or omissions are liable to be subject to such a duplication of proceedings and penalties;
- it must ensure that the proceedings are coordinated in order to limit to what is strictly necessary the additional disadvantage which results, for the persons concerned, from the duplication of proceedings, and
- it must ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.

Of particular interest, the Court considered that provisions seeking to protect the integrity of the financial markets of the European Union and public confidence in financial instruments (C-537/16) and provisions seeking to combat VAT offences (C-524/15) meet an objective of general interest. The Court noted that, in light of the importance that is given in the Court’s case law to combating market abuses and VAT infringements, a duplication of criminal proceedings and penalties may be justified where those proceedings and penalties pursue, for the purpose of achieving such an objective, different aspects of the same unlawful conduct at issue.

The Court also assessed whether the provisions respected the principle of proportionality, which implies the existence of rules ensuring coordination so as to reduce to what is strictly necessary the additional disadvantage associated with such duplication for the persons concerned. In the case relating to VAT, the Court considered that the legislation ensures the proportionality of all of the penalties imposed given that, among other things, a criminal conviction would prevent the enforcement of an administrative penalty. On the contrary, in the case relating to market manipulation, the Court was of the opinion that the principle of proportionality was not respected – a question which is for the referring court to ultimately determine – given the absence of a similar limitation.

Henceforth, in the VAT case, the Court agreed in principle to a duplication of proceedings of a criminal nature. Finally, the CJ affirmed such that such a conclusion is in line with the ne bis in idem principle as set by the European Convention on Human Rights (“ECHR”) and the case law of the European Court of Human Rights. According to the CJ, the required conditions for a duplication of proceedings ensure a level of protection of that fundamental right that do not conflict with its meaning and scope in the ECHR.
NoteworthyIn these two judgments, the CJ reiterated its attachment to the decisions handed down by the European Court of Human Rights.

First, the Court implicitly relied on the Grande Stevens decision (ECHR, 4 March 2014, Grande Stevens v. Italy), which was expressly mentioned in the AG's opinion, to assert, on the one hand, that the provisions in question were aimed at guaranteeing the integrity of the financial markets and maintaining public confidence in the security of transactions and, on the other hand, that the Consob sanctions were aimed at both a preventive and a punitive objective (paras. 46 and 47).

Second, these judgments constitute a reversal of case law in relation to the C-617/10 Åkerberg Fransson judgment rendered in 2013. In that judgment, the CJ had established that the ne bis in idem principle does not preclude the duplication of fiscal and criminal penalties, in so far as the first penalty is not of a criminal nature. From now on, the CJ has relaxed its case law by admitting the possibility of a combination of two criminal sanctions, under certain conditions. In doing so, the CJ aligns its case law with that of the ECHR, which in 2016 had already admitted the accumulation of different criminal penalties in the case of an integrated mixed procedure, i.e. administrative and criminal, provided that the procedures, although different, have a sufficiently close material and temporal link between them and form part of an integrated sanctions mechanism (ECHR, 15 November 2016, A and B v. Norway). The judgment in A and B v. Norway did not constitute a genuine reversal of case law by the ECHR but rather the clarification of the contours of case law initiated by the Nilsson judgment in 2005, in the case of the parallel execution of linked procedures that form a coherent whole.

Third, the judgments represent a step further towards the convergence (without there being identity) of the two European Courts on the complex issue of the appraisal of the link between parallel procedures. While most of the criteria laid down by the CJ overlap with those of the ECHR (complementary goals, need for clear rules, proportionality of the severity of all penalties), some minor differences appear to persist. Firstly, the CJ requires that the limitation of the ne bis in idem principle meets an objective of general interest. Secondly, the ECHR seem to attach particular importance to the temporal link between the procedures, while the CJ basically requires that procedures are coordinated with each other.

The judgment of the CJ in the case C-537/16 is of the utmost importance given the increasing severity of EU law and of the supervising authorities towards breaches of the rules by banking and financial operators, which is also in line with the recommendations of the Financial Stability Board and the 2010 Communication from the EU Commission “Reinforcing sanctioning regimes in the financial services sector”.

A three party card scheme involving a co-branding partner is subject to the same restrictions as those applicable to four party schemes with respect to interchange fees. However, the mere fact that a three party payment card scheme uses a co-branding partner does not necessarily mean that it is subject to the access obligation in favour of payment services providers.

Judgment
C-643/16
07.02.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityAmerican Express Company v The Lords Commissioners of Her Majesty’s Treasury Court of Justice1st ChamberE. ReganM. Campos Sánchez-BordonaPayment services in the internal market
KeywordsReference for a preliminary ruling — Directive (EU) 2015/2366 — Payment services in the internal market — Article 35(1) — Obligation to provide authorised or registered payment service providers with access to payment systems — Point (b) of the first subparagraph of Article 35(2) — Inapplicability of that obligation to payment systems composed exclusively of payment service providers belonging to a group — Applicability of that obligation to three party payment card schemes that have entered into co-branding or agency arrangements — Validity
Significant pointsIn this request for a preliminary ruling, the High Court of Justice of England and Wales refer a question to the Court of Justice concerning the interpretation of Article 35 of the Directive (EU) 2015/2366 on payment services in the internal market (the “Directive”) and the conditions for the application to three party payment card schemes of the rules governing the access of authorized or registered payment service providers to payment systems.

American Express, an international undertaking of payment, travel exchange and loyalty rewards platforms services, also carries out activities relating to the issuing and acquisition of cards worldwide, including in the European Union.

American Express operates, with its subsidiaries, the American Express payment cards scheme (‘Amex’), which is a three party payment card scheme. Amex has entered into co-branding and service provision arrangements within the European Union.

According to the Court, the participation of payment service providers or of another third party the role of which can be treated as equivalent to that of such a provider (agent) that do not belong to the same group in one and the same payment system deprives that system of the benefit of the exception laid down in Article 35(2) (b) of the Directive, which is applicable only to three party or closed schemes (schemes where there is no other financial institution than the very card-issuing scheme). Consequently, the system is subject to the access obligation, laid down in Article 35(1) of the Directive, which is, in principle, applicable to four party or open schemes (schemes where there are the issuing bank and the acquiring bank in addition to the entity managing the payment scheme), and aims at enabling any payment service provider to access to such payment systems.

A payment service provider can be namely credit institutions, electronic money institutions, post office giro institutions (entitled under national law to provide payment services), payment institutions, the ECB and national central banks (not acting as a monetary authority) and Member States or regional or local authorities. The Court found that it cannot be inferred from the terms “Co-branding partner” (as defined by Article 2(32) of regulation 2015/751) or “agent” (as defined by Article 4(38) of the Directive), that they should be considered as “payment service provider”.

The Court judged that a three party payment card scheme, such as Amex, is composed exclusively of payment service providers belonging to a group, and are not subject to the access obligation laid down in Article 35(1), unless a third party takes part in its operation in such a way that it can no longer be considered to be composed exclusively of payment service providers belonging to the same group (as meant in Article 35(2) of the Directive).

However, where a three party payment card scheme decides to open up, making use of a payment service provider or an agent that are outside the group, its operation becomes similar to that of a classic four party payment system, with the result that the need to stimulate the competition created in the market no longer justifies the exemption from the access obligation.

The Court also stated that it was clear that such an obligation was applicable to a three party payment card scheme that has entered into a co-branding agreement where the co-branding partner concerned is a payment service provider, even though that partner does not itself provide, within the framework of that agreement, any payment service with respect to the co-branded products. By contrast, a three party payment card scheme that has entered into a co-branding agreement with a co-branding partner does not lose the benefit of the exception proved for by the provision and, therefore, is not subject to the obligation laid down in Article 35(1) of that directive in a situation where that co-branding partner is not a payment service provider and does not provide payment services within that scheme with respect to the co-branded products. It also stated that where a three party payment card scheme has entered into an agreement with an agent, such an obligation was necessarily applicable, due to the role of an agent, which is to act on the behalf of a payment institution in providing payment services.

In addition, the Court recalled that the aim of Article 35 is to ensure that all payment service providers can have access to the services of the technical infrastructures of payment systems in order to ensure, throughout the European Union, equal treatment of the various categories of payment service providers and, thereby, to maintain effective competition in payment markets. The Court found that the EU legislature was not required to set out in the Directive specifically, the reasons why in each of the situations concerned, a three party payment card scheme should be subject to the access obligation. The Directive was not vitiated by a failure to state reasons in that regard, nor rendered invalid.
NoteworthyIn this case, the Court has specified the conditions in which the obligation to provide authorised or registered payment service providers with access to payment systems applies. The Court recalled the definition of the notion of “group” and affirmed that a three party payment card scheme that is composed exclusively of payment service providers belonging to a group is not subject to the obligation laid down in Article 35(1) of the Directive 2015/2366. The sole exceptions are if the scheme makes use of an agent or a co-branding partner for the purposes of supplying payment services. In the first case, it will lose the benefit of the exception as granted to a classic three party payment card scheme and become, therefore, subject to the obligation laid down in Article 35(1) of the Directive. In the second case, the same solution will prevail, unless the co-branding partner is neither a payment service provider nor provides actually payment services.

The idea underlying such a distinction seems to be logical. The typical three party schemes with a co-branding partner or agency extensions are those concluded with undertakings which do not provide financial services. Those extensions constitute a joint marketing exercise by means of which the two entities share their customer bases with each other and encourage the consumption of the goods and services they provide. However, in light of such an assumption, perhaps for fear of any risk of bypassing the obligation laid down in Article 35(1) of the Directive, the Court has retained a fairly restrictive interpretation of the exemption set in Article 35(2).

A three party card scheme involving a co-branding partner is subject to the same restrictions as those applicable to four party schemes with respect to interchange fees. However, the mere fact that a three party payment card scheme uses a co-branding partner does not necessarily mean that it is subject to the access obligation in favour of payment services providers.

Judgment
C-304/16
07.02.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityAmerican Express Company v The Lords Commissioners of Her Majesty’s TreasuryCourt of Justice1st ChamberE. ReganM. Campos Sánchez-BordonaPayment services in the internal market
KeywordsReference for a preliminary ruling — Regulation (EU) 2015/751 — Interchange fees for card-based payment transactions — Article 1(5) — Three party payment card scheme treated as equivalent to a four party payment card scheme — Conditions — Issuance by a three party payment card scheme of card-based payment instruments ‘with a co-branding partner or through an agent’ — Article 2(18) — Concept of ‘three party payment card scheme’ — Validity
Significant pointsThis preliminary ruling related to a question asked by the High Court of Justice of England and Wales concerning the respect of the obligations laid down in Regulation (EU) 2015/751 on interchange fees for card-based payment transactions (the “Regulation”). This Regulation aims to regulate interchange fees, notably by imposing maximum interchange fees for debit and credit card transactions.

American Express, an international undertaking of payment, travel exchange and loyalty rewards platforms services, also carries out activities relating to the issuing and acquisition of cards worldwide, including in the European Union.

American Express operates, with its subsidiaries, the American Express payment cards scheme (‘Amex’), which is a three party payment card scheme. Amex has entered into co-branding and service provision arrangements within the European Union and the question in this case raised was whether or not these arrangements fell under the scope of the Regulation.

The Court recalled that, as a general rule, a three party payment card scheme is not subject to the obligations stemming from Articles 3 to 5 and 7 of the Regulation, unless it falls under one of the three situations described in Article 1(5) of the Regulation, namely: (i) if it has licensed another payment service provider for the issuance and/or acquiring of card-based payment instruments, (ii) if it has issued a card-based payment instruments with a co-branding partner, or (iii) if it has issued payment instruments through an agent.

The Court stated that in interpreting a provision of EU law, it is necessary to consider not only the precise wording involved but also the context in which it occurs and the objectives pursued by the rules of which it is part. Thus, having regard to the relevant definition of “co-branding” partner (defined at Article 2(32) of the Regulation) and “agent” (defined in Article 4(38) of Directive 2015/2366), the Court judged that such a co-branding partner or agent does not necessarily act within that scheme as an “issuer”, as defined in Article 2(2) of the Regulation.

Moreover, the Court referred to the objectives of the Regulation as stated in the recitals of the Regulation, which are to lay down uniform requirements for card-based payment transactions and internet and mobile payments based on cards, improve the functioning of the internal market and contribute to reducing transaction costs for consumers. In particular, recital 28 stipulates that, in order to acknowledge the existence of ‘implicit interchange fees’ and to contribute to the creation of ‘a level playing field’, it is necessary that, in certain circumstances, three party payment card schemes should be considered as four party payment card schemes and be subject to the same rules as the latter.

Considering this, the Court judged that it was not inconceivable that some types of consideration or benefit might be identified as constituting an implicit interchange fee, even though the co-branding partner or agent with which the three party payment card scheme concludes an arrangement is not necessarily involved in the issuing activity of that scheme.
The Court found, therefore, that it might prove difficult to achieve the objectives of the Regulation, in particular that of Article 1(5), of ensuring a level playing field in the market, if situations where a co-branding partner or agent does not act as an issuer, within the meaning of Article 2(2) of that regulation, were to be exempted from the rules laid down in Articles 3 to 5 and 7 of the Regulation.

Consequently, where a three party payment card scheme enters into a co-branding arrangement within the meaning of Article 2(32) of the Regulation, or an arrangement with an agent within the meaning of Article 4(38) of Directive 2015/2366, that scheme must be considered to be a four party payment card scheme, pursuant to Article 1(5) of that Regulation. The result of this classification is that the obligations stemming from Articles 3 to 5 and 7 of that regulation are applicable to it.

In light of the foregoing, the answer to the first question is that Article 1(5) of Regulation 2015/751 must be interpreted as meaning that, in the context of an arrangement between a co-branding partner or an agent, on the one hand, and a three party payment card scheme, on the other, it is not a prerequisite of that scheme being regarded as issuing card-based payment instruments with a co-branding partner or through an agent and therefore being considered to be a four party payment card scheme, within the meaning of Article 1(5) of Regulation 2015/751, that that co-branding partner or agent act as an issuer, within the meaning of Article 2(2) of that regulation.

Lastly, in response to the second question raised by the referring court, the Court considered that the Regulation is not vitiated by any failure to state reasons, neither a manifest error of assessment, nor a breach of the principle of proportionality.
NoteworthyThis is the first Court of Justice judgment dealing with Regulation 2015/571 on interchange fees between banks for debit and credit card payments. This regulation followed European Commission investigations into Visa and Mastercard interchange fees whereby the Commission found that the arrangements restricted competition between banks.

The Court’s judgment is a logical interpretation of EU legislation by the Court in which it has strived to look at the objectives of the Regulation on Interchange Fees and give it practical effect. The Court emphasised that one must look at the circumstances in which a three party payment card scheme operates in order to see whether it should be considered to be a four party payment card schemes.

Towards the extension of the right of establishment and the free provision of services to purely internal situations : Judgment of the CJEU in Grand Chamber in the Case C-31/16

Judgment
C-360/15 & C-31/16
30.01.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Preliminary rulingX and Visser Vastgoed BeleggingenCourt of Justice Grand ChamberJ. L. da Cruz VilaçaM. M. SzpunarFreedom of establishment of service providers
KeywordsReference for a preliminary ruling — Services in the internal market — Directive 2006/123/EC — Scope — Concept of ‘service’ — Retail trade in goods — Chapter III — Freedom of establishment of service providers — Applicability in purely internal situations — Article 15 — Requirements to be evaluated — Territorial restriction — Zoning plan prohibiting the activity of retail trade in goods other than bulky goods in geographical zones situated outside the city centre — Protection of the urban environment
Significant pointsThis case mainly concerned the interpretation of Directive 2006/123/EC on services in the internal market (“Services Directive”). In this judgment, two Dutch courts (the Supreme Court and the Council of State) referred preliminary questions to the Court of Justice, which decided to join the cases.

In the second case (C-31/16), which we will focus on, the preliminary ruling stemmed from litigation in which an undertaking contested the decision of a municipal council which established a zoning plan, exclusively reserving a commercial area for bulky goods businesses and prohibited other retail businesses in that area.

The first question addressed by the Court was whether the activity of retail trade in goods such as shoes and clothing constitutes a ‘service’ for the purposes of the Services Directive. The latter generally defines a service as ‘any self-employed economic activity, normally provided for remuneration’. In this regard, the Court noted that the retail trade activity fulfills this definition and is not excluded by any other provision of the directive. In addition, the Court observed that Article 57 TFEU mentions activities of a commercial character as services, and that a recital of the Services Directive mentions that distributive trade is included in its scope. Therefore, it was held that the activity of retail trade falls within the scope of the concept of ‘service’ within the meaning of the Services Directive.

The second and most important question addressed by the Court was whether or not the provisions on the freedom of establishment of service providers of the Services Directive apply to a purely domestic situation or whether a cross-border element is required.

In answering this question, the Court looked at the wording of those provisions, their context and the objective pursued by that directive of creating an internal market for services as well as the Parliament's preparatory work of that directive, to rule, that these provisions also apply to a situation where all the relevant elements are confined to a single Member State. In particular, the Court asserted that the scope of the Services directive is capable of extending, in certain cases, beyond what is strictly laid down in the provisions of the FEU Treaty relating to freedom of establishment and the free movement of services, in order to ensure that the effet utile of the specific legal framework that the EU legislature intended to establish in adopting Directive 2006/123 is not undermined.

Finally, the Court addressed a question regarding the compatibility of the zoning plan with the provisions of the Services Directive on authorisation schemes and requirements. Firstly, the Court ruled out the application of the provisions on authorisation schemes to the zoning plan at hand as they do not provide a procedure to obtain a formal or implied decision from a competent authority but lay down instead rules of general application. The Court assessed the zoning plan with regard to Article 15 of the directive, relating to requirements for the provision of services to be evaluated by a Member State. Under this provision, a territorial restriction limiting access to a service activity or the exercise of a service activity is not prohibited, provided that the conditions of non-discrimination, necessity and proportionality are satisfied.

Even though it is for the referring court to assess whether these conditions are fulfilled, the Court observed that the objective of protecting the urban environment may constitute an overriding reason relating to the public interest that may justify a territorial restriction as the one at hand.
NoteworthyThe Court’s ruling, delivered in Grand Chamber (!) that the freedom of establishment of service providers as well as the freedom of provision of services also apply to purely domestic situations is of remarkable importance.

Such step towards further integration of the internal market in the matters of right of establishment and free provision of services can be compared from a conceptual standpoint to the Lancry case law (Case C-363/93) where the prohibition of customs duty was extended to an import of goods entering a region of a Member State from another part of the same State.

The practical meaning of the judgment in the Case C-31/16 must not be underestimated. More economic operators could be entailed to challenge measures restricting their activity in purely internal situations, such as territorial restrictions. Put in another words, it is not excluded that most of the case law of the ECJ regarding the right of establishment and the free provision of services could become of relevance in purely national disputes involving measures from public bodies affecting access to market and/or the way economic operators can carry out their activities, … provided that the activities and the matter of law at stake fall within the ambit of the Services Directive. In this respect, it can be recalled that the Services Directive does not apply notably to financial services and the field of taxation.

Prévention du blanchiment : une précision bienvenue sur la portée du service de constitution de sociétés pour autrui

Judgment
C-676/16
17.01.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityCORPORATE COMPANIES s.r.o. v Ministerstvo financí ČRCour de Justicepremière chambreMme R. Silva de LapuertaM. Y. BotAnti-blanchiment
KeywordsRenvoi préjudiciel – Prévention de l’utilisation du système financier aux fins du blanchiment de capitaux et du financement du terrorisme – Directive 2005/60/CE – Champ d’application – Article 2, paragraphe 1, point 3, sous c), et article 3, point 7, sous a) – Objet social d’une entreprise consistant en la vente de sociétés commerciales inscrites au registre de commerce et constituées aux seules fins d’être vendues – Vente réalisée par une cession de la participation de l’entreprise dans la société préconstituée
Significant pointsParmi les opérateurs économiques soumis au respect des règles en matière de prévention du blanchiment figurent les prestataires de services aux sociétés et fiducies en plus des commissaires aux comptes, experts-comptables externes, conseillers fiscaux, notaires et autres membres de professions juridiques indépendantes. Est, entre autres, visée toute personne physique ou morale qui fournit, à titre professionnel, le service de constitution des sociétés ou d’autres personnes morales (articles 2, paragraphe 1, point 3, sous c) et 3, point 7, sous a) de la directive 2005/60).

Corporate Companies est une personne morale établie en Tchéquie, dont l’objet social consiste à vendre des sociétés « ready-made », c’est-à-dire des sociétés déjà inscrites au registre du commerce. Les sociétés ainsi constituées n’exercent aucune activité. Il s’agit de « coquilles vides » figurant au sein du portefeuille constitué par Corporate Companies, dans l’attente d’une vente.

À la suite d’un contrôle par le ministère des Finances tchèque du respect par Corporate Companies des obligations fixées notamment par la loi anti blanchiment, la CJUE a été confrontée à la question de savoir si, en substance, une telle personne morale dont l’activité commerciale consiste à vendre des sociétés qu’elle a elle-même constituées, sans aucune demande préalable de la part de ses clients potentiels, aux fins d’être vendues à ces clients, au moyen d’une cession de ses parts dans le capital de la société faisant l’objet de la vente de l’arrêt.

La Cour a répondu par l’affirmative en se fondant tant sur le texte de la directive, l’intention du législateur que sur l’objectif de la directive.

Notamment, la directive n’opérerait pas de distinction selon qu’une société est constituée à la demande d’un client ou par le prestataire dans la perspective de sa vente ultérieure à un client potentiel.

En outre, la constitution d’une société présente des risques au regard du blanchiment des capitaux dans les deux hypothèses.

En effet, d’abord, la constitution d’une société représente elle-même une opération qui, par sa nature, présente un risque élevé de blanchiment de capitaux et de financement du terrorisme, en raison des transactions financières que cette opération comporte normalement, telles qu’un apport de capitaux et, le cas échéant, de biens, de la part du constituant de la société.
Ensuite, une société constitue une structure appropriée pour la réalisation tant du blanchiment de capitaux que du financement du terrorisme, en ce qu’elle permet de dissimuler des ressources obtenues illégalement, qui seront légalisées au moyen de cette société, ainsi que de financer le terrorisme par son intermédiaire.
Enfin, l’identification du client constitue un élément crucial de prévention de ces activités, ainsi que l’énonce le considérant 9 de la directive 2005/60. Il apparaît dès lors raisonnable que le législateur de l’Union ait soumis la création d’une telle structure par une personne ou par une entreprise au nom d’un tiers au contrôle prévu par cette directive, en établissant ainsi une première barrière afin de dissuader toute personne qui entendrait utiliser une société aux fins de faciliter ce type d’activités.

En conséquence, l’absence d’obligations en matière de prévention du blanchiment de capitaux et du financement du terrorisme à charge d’une personne telle que Corporate Companies, notamment l’obligation de vérifier l’identité du client et du bénéficiaire effectif, d’une part, servirait l’anonymat des acquéreurs réels des sociétés vendues ou des personnes agissant pour leur compte et, d’autre part, permettrait de masquer l’origine et la finalité des transferts patrimoniaux transitant par ces sociétés.
NoteworthyLa CJUE a retenu une interprétation large de la notion de fourniture à titre professionnel du service de constitution des sociétés ou d’autres personnes morales à des tiers, fondée sur l’effet utile de la directive anti blanchiment et le souci d’éviter tout contournement. L’application de la directive à de tels prestataires et à leurs opérations n’est pas subordonnée à l’existence d’un client déterminé préalablement à la réalisation de l’opération de constitution de la société.

L’approche apparaît commandée par la finalité de la directive de prévention des risques. Elle est également en phase avec la conception large de service en droit européen. Si la prestation d’un service recouvre généralement trois éléments, un prestataire, un service et un destinataire, les règles relatives à la prestation d’un service (par exemple la libre prestation des services comme dans l’arrêt du 10 mai 1995 Alpine Investments, C-384/93, ou en l’occurrence celles en matière de blanchiment) ne requièrent pas, pour leur application, la réunion de toutes ces conditions et notamment l’existence d’un destinataire déterminé préalablement à la fourniture de l’activité concernée, sous peine de vider les règles de leur effectivité.