ISSUE Nº2
Y EAR 2 0 2 3
6-10 November 2023
IN-DEPTH: “How detailed is detailed enough? The Court of Justice clarifies the criteria for detailed investigations for the purposes of the principle of ne bis in idem (Központi Nyomozó Főügyészség, C-147/22)” Annegret Engel “Penalty Payments and Post-Brexit Britain – The Continued Jurisdiction of the Court of Justice over the UK (Commission v United Kingdom, C-692/20)” Darren Harvey “ ‘May the rental gods smile upon you’ But only when you lease property within the EU or EEA if Germany has anything to say (C-670/21 BA v Finanzamt X)” Yvette Lind “To be or not to be a financial institution? Portuguese national law uncertainties ‘help’ the Court of Justice in shedding the light on ambiguities over EU law prudential terminology (Joined cases C‑207/22, C‑267/22 and C‑290/22)” Pier Mario Lupinu “Clariant Fails to Overturn €155.8 Fine in Ethylene Cartel Case (Case T-509/20)” Thomas Harbor “The Court of Justice upholds the Austrian derogation regarding VAT on broadcasting services despite earlier case law on the supply of services for consideration (Case C-249/22 BM v GIS)” Sam van der Vlugt SYMPOSIUM ON THE AGENCIES OF THE EU: “Science to the people? The reach of transparency into EU agency science” Marta Morvillo “Quasi-judicial review in EU agencies: opportunities and challenges” Oana Stefan THE LONG READ: “EU Women on Boards Directive: Wrong tool, wrong problem?” Eleanore Hickman HIGHLIGHTS OF THE WEEK
ISSN: 2695-9593 2 0 2 3 © A L L R I G H T S R E S E RV E D
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“How detailed is detailed enough? The Court of Justice clarifies the criteria for detailed investigations for the purposes of the principle of ne bis in idem (Központi Nyomozó Főügyészség, C-147/22)” Annegret Engel The preliminary ruling from 19 October in case Központi Nyomozó Főügyészség, C-147/22, concerns the principle of ne bis in idem, according to Article 50 of the EU Charter, and, more specifically, the ‘bis’ condition
thereof which requires an earlier decision to having become final. In this regard, the Court provides some essential guidance on how detailed such prior investigations have to be and what they would have to include in order to
satisfy the criterion. In addition, the Court also explicitly links the principle of ne bis in idem to the principles of mutual trust and mutual recognition as well as the principle of sincere cooperation. Background to the case In the present case, the accused is a Hungarian national against whom criminal proceedings were brought on
suspicion of corruption. The suspected acts were carried out between 2005 and 2010 and allegedly involved bribes amounting to several million euros in order to fraudulently influence a public contract for the supply of new metro trains in Budapest.
Based on information provided by the Serious Fraud Office in the UK, the Central Public Prosecutor’s Office for
the prosecution of financial crime and corruption in Austria brought criminal proceedings against the accused and two other persons on 22 August 2012. The competent authorities in Austria failed, however, to locate the accused and subsequently could not interview him in the course of the investigations. Since there was not sufficient
evidence to give rise to a criminal conviction, the pre-trial investigations were discontinued on 3 November 2014. Any further attempt to continue the proceedings by the competent authorities in Austria also failed, not least because the alleged corruption was time-barred under Austrian law from 2015 the latest.
In 2019, criminal proceedings were brought against the accused in Hungary for the same acts of corruption as in
the earlier proceedings in Austria. While the Budapest High Court ordered to end the proceedings in accordance with the principle of ne bis in idem, the Budapest Regional Court of Appeal set aside that order arguing that the previous investigations in Austria were not sufficiently detailed and were not based on a complete assessment of
the evidence to constitute a final decision necessary for the ne bis in idem principle to be applicable. The Budapest High Court thus stayed the proceedings and referred the question to the Court of Justice.
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The judgment As a preliminary point, the Court first observed that only the first condition (the ‘bis’ condition) of the principle
of ne bis in idem is at issue here. Accordingly, the Court reiterates that this condition requires the existence of a prior final decision, which must have been given following a ‘determination of the merits of the case’ as established
previously in Kassowski (para. 28). The Court further observed that such a decision is not necessarily restricted to having been derived from the judiciary, but can also effectively be made by other authorities in the criminal justice system, such as a public prosecutor’s office.
In its judgment, the Court also stated that any re-opening of criminal proceedings do not call into question the
finality of the prior decision but can only be done so exceptionally and by means of separate proceedings based on different and new evidence, i.e. not a mere continuation of those previous proceedings (para. 30). Such exceptional
circumstance cannot, however, deviate from an offence becoming time-barred in the meantime, as in the present case.
With these preliminary points in mind, the Court continued in its main part of the ruling to focus on Article 54
of the Convention implementing the Schengen Agreement (CISA) in conjunction with the principles of mutual trust and mutual recognition. In particular, the Court highlighted the importance of the establishment of and free
movement of people within the Schengen area, including those who have either served their sentence or have been acquitted to do so without fear of further prosecution in another Member State (para. 40). This is the case even if proceedings in a different Member State would lead to a different result (para. 42).
The Court, however, held that in order for Article 54 of the CISA and the principle of mutual trust to apply ‘detailed investigations’ are required before a decision can reach finality (para. 44). Such a detailed investigation must constitute an ‘assessment of the merits’ (para. 45). Indeed, the Court recognised that the investigations in
question had taken more than two years, including the screening of bank accounts and the interviewing of two other suspects. While the Court acknowledged that the accused himself was not interviewed, it nevertheless found that this cannot lead in and of itself to the assumption that the investigations in question were not detailed enough and that it is otherwise a matter for the first Member State to evaluate based on its national laws. As such, the Court held that ‘it is only in somewhat exceptional cases that the second Member State can conclude that there is no detailed
investigation in the first Member State, namely where, under the applicable national law of the first Member State, that is manifestly the case, having regard, first of all, to the reasons set out in that decision and any information
communicated before its adoption by the first Member State in response, where appropriate, to a request addressed to it by the second Member State.’ (para. 52).
Consequently, the Court found that any ‘finding by the second Member State of the lack of a detailed investigation
must constitute the exception rather than the rule’ and only where, for example, a decision was taken on purely
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procedural grounds or for reasons of expediency, economy or judicial policy (para. 53). Ultimately, this ties in with the principle of sincere cooperation as laid down in Article 4(3) TEU, which obliges Member States to assist each
other in carrying out the duties which flow from the treaties, such as the application of the ne bis in idem principle. Evaluation The ruling is significant in clarifying the level of detail and the factors which should be taken into account for the
assessment of investigations leading up to a prior decision for the purpose of the ‘bis’ condition in the principle of ne bis in idem according to Article 50 of the EU Charter. While it remains for the national courts to decide
on the actual facts of the case, the Court of Justice’s ruling provides some important guidelines to help in their assessment and thus constitutes another crucial jigsaw piece in the discussion on Res Judicata.
As to the central question of the preliminary ruling how detailed investigations are required to be, the Court
clearly establishes a high threshold for a second Member State to dismiss any prior decision as lacking in detail.
Instead, the references made to the principles of mutual trust and mutual recognition between Member States, as well as the principle of sincere cooperation, as essential cornerstones of the Schengen area ensure the proper application of Article 54 of the CISA and the free movement without internal borders.
By contrast, a lower threshold, i.e. if a Member State could easily question the evidence used (or lack thereof ) or
impose its own standards for investigations upon another Member State would fundamentally jeopardise not only the system of criminal law cooperation between Member States, but also undermine trust in the internal market by the EU citizens as well as the rule of law in the European Union as a whole.
As such, the ruling has to be welcomed in that it protects individuals from a risk of double jeopardy, thus strengthening the application of fundamental rights and general principles of EU law, specifically the principle of ne bis in idem and more broadly the rule of law in the EU and its Member States.
Annegret Engel, Associate Professor in EU law, Lund University, Sweden; Email: annegret.engel@jur.lu.se. A more detailed discussion of the ne bis in idem principle can be found here.
SUGGESTED CITATION: Engel A.; “How detailed is detailed enough? The Court of Justice clarifies the criteria for detailed investigations for the purposes of the principle of ne bis in idem (Központi Nyomozó Főügyészség, C-147/22)”, EU Law Live, 08/11/2023, https://eulawlive.com/op-ed-howdetailed-is-detailed-enough-the-court-of-justice-clarifies-the-criteria-for-detailed-investigations-for-the-purposes-of-the-principle-of-ne-bis-in-idemkozponti-nyomozo-fougyeszs/
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“Penalty Payments and Post-Brexit Britain – The Continued Jurisdiction of the Court of Justice over the UK (Commission v United Kingdom, C-692/20)” Darren Harvey Introduction On 1st January 2021, the transition period agreed between the UK and the EU in the UK-EU Withdrawal
Agreement expired and, on one view, the long and arduous Brexit process came to an end. Among the many, often cited consequences of ‘getting Brexit done’ is the idea that Brexit has resulted in the UK no longer being subject to the oversight of the European Commission and the jurisdiction of the Court of Justice. However, to those who had been paying attention, it was clear that neither of these things had fully come about by virtue of the transition period ending.
Evidence of this is to be found in many places. It is to be found in Articles 86 and 87 of the UK-EU Withdrawal
Agreement, which provide that any cases pending before the Court of Justice at the end of the transition period
continue to fall within the Court’s jurisdiction until they are finalised. Moreover, the Commission has four years from the end of the transition period to bring infringement proceedings against the UK for breaches of EU law that
took place during the transition period. Further evidence is to be found in Article 12(4) of the Protocol on Ireland/
Northern Ireland (now known as the ‘Windsor Framework’) annexed to the UK-EU Withdrawal Agreement, which states that the Court of Justice has jurisdiction with regards to provisions relating to customs, technical
regulations, VAT, and state aid under the Protocol. The Protocol also states that the European Commission can bring infringement actions against the UK for alleged infringements by the UK of these provisions of the Protocol, with the Court of Justice being entrusted with ultimately confirming and sanctioning violations of
relevant provisions of the Protocol. Yet further evidence is to be found in the recent judgment of the Court of
Justice in the Fiscal Marking of Fuel case (Commission v United Kingdom, C-692/20). As shall be shown below, the judgment gives a clear indicator of the continued jurisdiction of EU institutions and continued relevance of EU law to actions taken by the UK both pre- and post-Brexit. Background to the Case The Fuel Marker Directive 95/60 requires Member States to apply a fiscal mark to fuels which are not taxed at
the full rate. This is usually done by adding a dye to those fuels, thereby making it easy to detect which fuels are and are not subject to full taxation rates. Conversely, Member States must not apply a fiscal mark to fuels which are taxed at the full rate, lest they undermine the objective of the Directive. By judgment of 17th October 2018
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in Commission v United Kingdom (C‑503/17) the Court of Justice held that the United Kingdom (UK) had failed to comply with its obligations under the Fuel Marker Directive 95/60 by allowing the use of marked fuel for
the purpose of propelling private pleasure craft, even where that fuel was not subject to any exemption from or reduction in taxation.
On 15th May 2020, the European Commission sent a letter of formal notice under Article 260 TFEU to the
UK alleging that the latter had not taken the measures necessary to comply with the Court’s judgment in Case
(C‑503/17). The UK was given until 15th September 2020 to respond. Unhappy with the response that it received, the Commission then brought the matter before the Court of Justice, requesting it to declare that the UK had failed to fulfil its obligations under Article 260(1) TFEU, read in conjunction with Articles 127 and 131 of the UK-EU Withdrawal Agreement (see below). In addition, the Commission requested the Court of Justice to order
the UK to pay the Commission daily and lump sum penalty payments for their failure to comply with the original judgment of the Court. Notably, the UK had enacted domestic legislative changes which came into effect on 1st
October 2021 and brought that state into compliance with the initial Court of Justice’s judgment. Consequently, by the time the Court heard the case, the Commission was arguing that the UK pay fines for non-compliance with the initial judgment in the period from 17th October 2018 to 30th September 2021. The UK’s Failure to Comply with the Judgment of the Court of Justice The first half of the Court of Justice’s judgment in Fiscal Marking of Fuel (Commission v United Kingdom (C692/20)) involves a straightforward rejection by the Court of all the reasons put forward by the UK as to why it
could not comply with the initial judgment in Commission v United Kingdom (C‑503/17). Given that Member States cannot plead provisions, practices or situations prevailing in their domestic legal order to justify failure to
observe obligations arising under EU law, excuses pertaining to UK legislative procedure, a UK general election, the conducting of public consultations, the UK’s geographic features, the variety in port sizes in the UK, the
difficulties in supplying both marked fuel and unmarked fuel, economic and safety concerns and the COVID-19
pandemic were all dismissed by the Court. Accordingly, by failing to take all the measures necessary to comply with the initial judgment, the UK had failed to fulfil its obligations under Article 260(1) TFEU.
The second half of the judgment is arguably far more interesting and controversial, since it is at this stage that
Brexit enters the picture. As is well known, the UK-EU Withdrawal Agreement entered into force on 1st February 2020. As per Article 126 of that Agreement, a transitional period ran from 1st February 2020 until 31st
December 2020. During this period, virtually all EU law continued to bind and be applicable in the UK as if it
were still an EU Member State. Following the end of the transition period, EU law ceased to be binding in and upon the UK as a whole. However, vast swathes of EU legislation (including the Fuel Marker Directive 95/60 and
other relevant EU legislation at the heart of the present dispute) continue to apply in Northern Ireland as part of the Protocol on Ireland/Northern Ireland/Windsor Framework annexed to the Withdrawal Agreement. This meant that since 1st January 2021, Directive 95/60 had ceased to apply to the UK except in respect of Northern
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Ireland, with the consequence that from that date until 1st October 2021, the continuation of the UK’s failure to comply with the initial judgment of the Court of Justice only applied in relation to Northern Ireland. The Dissuasive and Proportionate Nature of Penalty Payments Against this background, the Court of Justice moved to consider the amount that the UK should pay by way of
penalty under Article 260 TFEU for non-compliance with its initial judgment. In so doing, the Court found that it was irrelevant that recent changes to UK law had brought the UK into compliance with that judgment – it
was for the Court to determine the appropriate financial penalties in the light of the circumstances of the case
and according to the degree of persuasion and deterrence which appears to it to be required in order to prevent the recurrence of similar infringements of EU law. In making this determination, the Court addressed the UK
and Commission’s arguments pertaining to the seriousness of the UK’s infringement and the UK’s ability to pay. Whereas the Court’s judgment on these points touched upon various aspects of institutional and substantive EU law, the remainder of this blog post focuses on the Brexit dimension to these questions.
With regards to the seriousness of the infringement, the Court noted that account must be taken of the fact that, since 1st January 2021, the Fuel Marker Directive no longer applied in the UK except in respect to Northern Ireland and, crucially, this meant that the effects of the UK’s infringement were reduced from that date.
Turning to the ability of the UK to pay a penalty, the predominant factor in assessing both that ability, and whether any penalties are sufficiently dissuasive and proportionate to prevent a repeat of similar infringements
of EU law in future, is the GDP of the Member State concerned. The Court rejected the UK’s argument that, when it came to calculating the UK’s ability to pay, the GDP of Northern Ireland only should be considered for the entirety of the infringement period. Similarly, the argument that the GDP of Northern Ireland only should
be considered when assessing the fine for the period between the end of the transition period and the date on which the UK complied with the initial judgment of the Court was rejected. This was because Article 12(1) of the
Northern Ireland Protocol provided that it was the UK authorities (and not the Northern Irish authorities) who
were responsible for implementing and applying provisions of EU law made applicable to the UK in respect of Northern Ireland by the Protocol. Moreover, taking account of the ability of a Member State to pay is necessary
to ensure that penalties are fixed at a level which are sufficiently dissuasive and proportionate to prevent similar infringements in the future. Such a deterrent effect would be undermined if the Court were to only look at the
GDP of Northern Ireland, since it would result in a penalty that was not sufficiently dissuasive to prevent future infringements. Therefore, it was appropriate to consider the GDP of the UK as a whole for the entire period of the
infringement when assessing the ability of the UK to pay. Similarly, the Court rejected the UK’s argument that it could only consider the GDP of the territory to which EU law applied (i.e., Northern Ireland) at the date of the
Court’s examination of the facts. For these reasons, the Court considered, in light of the facts and circumstances of the case, that the UK should pay a lump sum penalty of EUR 32 000 000 for an infringement running from 17 October 2018 to 30 September 2021.
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Comment On the one hand, the significance of the judgment may be rather limited. The Court of Justice is unlikely to be called upon to settle many more Article 260 TFEU penalty payment claims for infringements which involved a
rather specific set of facts, and which took place within a unique timeframe that spanned the UK’s period of EU membership, the transition period and UK-EU post-Brexit arrangements.
On the other hand, as has been pointed out elsewhere, the judgment appears to lay down a series of principles
pertaining to the seriousness of infringements of EU law and the ability of the UK state to pay penalties for such infringements which are likely to be applicable to any future action brought on the basis of the Northern Ireland Protocol/Windsor Framework. In this regard, the judgment is notable for the way in which the Court treats the continued applicability of EU law in Northern Ireland differently with regards to the seriousness of the UK’s infringement and the UK’s ability to pay a penalty. Whereas this fact was to be considered in mitigation when assessing the former, the same was not true of the latter. In much the same way as national authorities of
Member States are ultimately responsible for ensuring that EU law is fully implemented and applied in their own territories, Article 12(1) of the Protocol makes it clear that it is the UK authorities who are responsible for
implementing and applying provisions of EU law made applicable in Northern Ireland. Consequently, the effects
produced by the end of the transition period on the rest of the UK (minus Northern Ireland) was irrelevant for the purposes of calculating the UK’s ability to pay a penalty under Article 260 TFEU. It was not appropriate to
treat the UK differently from EU Member States in making such an assessment. Above all else, it is the objective of deterring future instances of non-compliance through dissuasive and proportionate penalties which drives the Court’s reasoning. This rationale appears to be equally compelling whether it be applied within the context of EU law obligations flowing from EU membership, or EU law obligations flowing the Northern Ireland Protocol/
Windsor Framework annexed to the UK-EU withdrawal agreement. As a result, UK-wide GDP will likely be the reference point moving forward when considering the UK’s ability to pay penalties for infringements of EU law committed solely within the context of EU law’s continued applicability to and in Northern Ireland. There
might, therefore, be yet further evidence of the continuing reality that Brexit has not brought about an end to
the jurisdiction of the Court of Justice in quite the manner that was envisaged by those who appear to take great pride in having gotten Brexit done.
Dr Darren Harvey is a Senior Lecturer in Law at King’s College London. He has published journal articles on the role of the European Parliament in the Brexit process and the UK government’s breach of good faith obligations during the
Brexit process. Together with Prof. Steve Peers, he is the author of a chapter on Brexit in the textbook Barnard and Peers, European Union Law (Oxford University Press).
SUGGESTED CITATION: Harvey, D.; “Penalty Payments and Post-Brexit Britain – The Continued Jurisdiction of the Court of Justice over the UK (Commission v United Kingdom, C-692/20)”, EU Law Live, 06/11/2023, https://eulawlive.com/op-ed-penalty-payments-and-post-brexit-britain-thecontinued-jurisdiction-of-the-court-of-justice-over-the-uk-commission-v-united-kingdom-c-692-20-by-darren-harvey/
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“ ‘May the rental gods smile upon you’ But only when you lease property within the EU or EEA if Germany has anything to say (C-670/21 BA v Finanzamt X)” Yvette Lind Introduction to the tax matter When real estate property is sold or changes owner, a one-time real property transfer tax of the purchase price is levied if the purchase price or equivalent exceeds a stipulated threshold. This owner change normally includes gifting or transfer through an inheritance, as that too is a change in ownership. However, this view may vary
between countries dependent on the existence of a gift and inheritance tax and whether the transaction is considered as a change in ownership or if fiscal continuity is considered upheld. In Germany this tax is referred to as a Grunderwerbsteuer and the threshold is set to EUR 2 500. This real property transfer tax is normally paid by then the buyer or the receiver. The tax rate varies from federal state to federal state.
Germany, similar to many other countries, suffers from a lack in affordable housing. The German statistics for
2022 informs us that the main tenant households spent an average of 27,8% of their income on rent. These rental
estimates do not include operating costs nor heating expenses that, as has become evident over the last couple of years, add substantially to the overall housing costs.
As a response, Germany introduced a tax advantage to the German inheritance and gift tax of 1997 (Erbschaftssteur-
und Schenkungsteuergesetz) as a way of mitigating the housing situation by reducing the concentration of residential leasehold properties operated by investor groups and supporting individually owned ones instead. To the point, the tax advantage aims through the 10% reduction of the tax base to incentivise individuals who inherit
property leased for residential use to retain it rather than having to sell it due to the tax burden linked to the transfer of ownership.
In practise, paragraph 13c, entitled Special rules on immovable property leased for residential use, in above mentioned law allows the real estate in question to be valued at 90%, compared to full value, when calculating the inheritance tax burden. This tax advantage is awarded if the following requirements are fulfilled:
1. The taxpayer in question needs to be a natural person to be subject to the inheritance tax. Corporate taxpayers
are not subject to inheritance tax which makes this criterion more of a clarification rather than a requirement. This is stipulated in paragraph 1, subparagraph 1(1) to (3) of the German inheritance and gift tax.
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2. This natural person (the deceased/donor of the gift/inheritance alternatively the recipient of the gift/ inheritance on the date of the chargeable event) needs to have his or her permanent tax residence or habitual residence in Germany. In other words, the taxpayer needs to be liable for full taxation in Germany. This is stipulated in paragraph 13c (1) of the German inheritance and gift tax.
3. The real estate in question needs to be geographically located in either Germany, another EU Member State
alternately a Member State of the European Economic Area (EEA). This is stipulated in paragraph 13c (3) of the German inheritance and gift tax.
4. The real estate cannot form part of a business asset alternatively an agricultural or forestry holding asset
in accordance with paragraph 13a of the German inheritance and gift tax. This is logical given that many
countries offer tax concessions to these types of assets in particular as a way of mitigating tax effects linked to, for instance, generational shifts in ownership. Legal background of the case BA, the applicant and taxpayer in question, brought forward that his father, referred to as A, at the time of his death was a German resident. A bequeathed to BA, also a resident of Germany at the time of the transfer in
2016, a share of property located in Canada leased for residential purposes. The German tax office, Finanzamt X, assessed BA to inheritance tax with respect to the property. BA sought to have this decision amended as he argued that the property should be taxed in accordance with the special rules found in paragraph 13c of the German
inheritance and gift tax. Of the above-listed four requirements BA and his property fulfilled all but the third, that the property should be located within Germany, another EU Member State alternatively another EEA Member
State. BA submitted that this requirement, and subsequently the special rules, infringed the free movement of capital between Member States and third countries as enshrined in article 63 TFEU. The case was over time escalated to the German Finance Court in Cologne, Finanzgericht Köln. The German court concluded that the
Canadian property is to be considered to be in the same situation for the application of Article 65(1)(a) TFEU. Furthermore, the German court expressed doubt as to whether this restriction of movement may be justified by the standstill clause in Article 64 TFEU as argued by the German tax administration.
The Court of Justice has recently tested the validity of the standstill clause in another German tax case involving
the free movement of capital, namely C-135/17 X-GmbH. The case concerned the derogation from the
prohibition on restrictions to the free movement of capital with non-EU countries (the Standstill Clause), and its application to the German controlled foreign company (CFC) rules. Referring to case law on the matter, the
Court of Justice observed that a restriction on the free movement of capital involving direct investments in a third
country, is covered by the Standstill Clause. Moreover, the Court of Justice confirmed that the German CFC rules constituted a restriction to the free movement of capital but that it may be justified by overriding reasons in the public interest, in particular the need to prevent tax evasion.
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The German court argued that there appeared to be no overriding reason in the general interest capable of justifying the restriction. The German Government on the other hand put forward two overriding reasons in the general interest to justify the restriction.
1. That the facilitation of access to affordable housing was a European policy goal and the reason why the
German tax advantage had been extended to properties located in EEA Member States as well once it was introduced. The Government underlined that it was not up to Germany the EU, nor the EEA to facilitate access to affordable housing in third countries.
2. The Government further argued that there was need to ensure the effectiveness of fiscal supervision. The Commission supported the first argument supported on the social policy objective yet rejected the second
one concerning fiscal supervision. It was stated that the promotion of affordable housing could constitute a valid justification for a restriction of the free movement of capital irrespective of whether there is a comparable need in third countries. The Judgement Initially, the Court of Justice concludes that Article 64 TFEU does not appear to be applicable since the tax
advantage was introduced on 24 December 2008,with an effect from 1 January 2009, and consequently after 31 December 1993.
Thereafter, the Court of Justice expressed similar doubts that had been expressed by the German Court when
arguing that the overriding interest in the general interest, in particular the need to facilitate affordable housing, was too weak to justify the infringement. The German tax advantage did not apply to specific places proven to have
such housing issues within Germany, or EEA for that matter, but was instead universally applied. Furthermore, the tax concession did not separate between affordable rented accommodation or more luxurious residentials. Consequently, there was no overriding of the infringement.
This Op-Ed poses the question whether the Court of Justice would have come to a different conclusion, similar
to that of the Advocate General, had the tax advantage been more clearly specified towards urban areas and affordable rental properties. In other words, had the difference in treatment been more evident. Concluding remarks There is need to mention that Germany is currently reforming its property taxation and as of 2025 new rules
will be in place. These rules require all properties in Germany, irrespective if the properties are used for private
purposes or rented out, to be reappraised as a way of determining their new property tax value. It has been argued that these new property values will bring in additional tax revenues as many of the properties have not undergone
appraisal in the last 50 years. It should be stressed that the basic real property tax in Germany will be lowered from
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0,35% to 0, 034% or even 0,031%. The lowering of the tax rate may offset the potential increase in taxation due to
the new appraisal. Additionally, the new property tax and appraisal is administered through electronic filing which adds an additional layer of novelty, and potential problems, to the German homeowners.
It is reasonable to assume that there will be an increase in rents if landlords will need to offset an increase in property value taxes. Therefore, this author is intrigued of how this reform relates to the above-outlined German priority of mitigating the housing situation and ensuring affordable housing. It is possible to stipulate that the new tax rules go against the arguments brought forward by Germany in the BA v Finanzamt X case if the new
appraisals combined with the new rules results in an increased tax burden for the landlords and subsequently higher costs to those who rent. On the other hand, the lowering of the real property tax rate could very well offset
any increases, and potentially result in an overall lower property tax burden than was the case before the reform. And that would indeed ensure that the rental goods keep smiling towards its German flock.
To conclude, the outcome of the implementation in 2025 should be of interest to a broad audience of tax scholars and policymakers given that the housing market problem is widespread across jurisdictions.
Prof. Jur.dr. Yvette Lind is a Professor of Law at the Department of Law and Governance at BI Norwegian Business School. She specializes in tax law and has an expertise in international taxation, EU tax law, and EU state aid law. She has a distinctive expertise in Scandinavian tax law as she has researched and taught tax law in Sweden, Denmark, and Norway.
SUGGESTED CITATION: Lind, Y.; “May the rental gods smile upon you’ But only when you lease property within the EU or EEA if Germany has anything to say (C-670/21 BA v Finanzamt X)”, EU Law Live, 09/11/2023, https://eulawlive.com/op-ed-may-the-rental-gods-smile-upon-you-but-onlywhen-you-lease-property-within-the-eu-or-eea-if-germany-has-anything-to-say-c-670-21-ba-v-finanzamt-x-by-yvett/
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“To be or not to be a financial institution? Portuguese national law uncertainties ‘help’ the Court of Justice in shedding the light on ambiguities over EU law prudential terminology ( Joined cases C‑207/22, C‑267/22 and C‑290/22)” Pier Mario Lupinu Over the years, the Court of Justice has intervened several times in interpreting EU law in circumstances in
which the latter did not provide explicit definitions as, for example, in the case of monetary policy (Pringle C-370/12; De Witte and Beukers, 2013, 818). This task, however, is fulfilled also with regards to cases in which
EU law provides explicit definitions which, in turn, do not always reflect the terminology or interpretation of the corresponding laws of EU Member States. This could be either the result of the peculiar terms used by the
EU legislator (Lenaerts, 2007, 1015) or the faulty or incomplete transposition of EU laws (i.e., directives) into national law by Member States. Even when ‘EU terminology’ can be considered clear and when corresponding
laws have been duly transposed, different legal traditions and/or existing legislation might represent an obstacle to
a clear interpretation of EU law by national courts. This is the case of a recent judgement that the Court of Justice delivered on 26 October 2023 ( Joined cases C‑207/22, C‑267/22 and C‑290/22).
The case concerns the request for a preliminary ruling from two Portuguese courts (Tax Arbitration Tribunal (Centre for Administrative Arbitration) – Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa) and
the Supreme administrative Court – Supremo Tribunal Administrativo) over three cases in which just as many
holding companies brought actions against Portuguese tax authorities over stamp duties on credit transactions. The main point of all three cases concerned whether those holding companies were to be considered as ‘financial institutions’ according to EU law, which would exempt them from those duties.
In order to provide some clarity over the ambiguities that led the Portuguese courts to refer to the interpretation
of the Court of Justice, it is useful to briefly analyse the relevant Portuguese company law governing holding companies. The Portuguese Decree-Law 495/88, of December 30, 1998, as amended defining the legal regime
for holding companies, refers to ‘Pure Holding Companies’ (Sociedades Gestoras de Participações Sociais – SGPS). Those companies have the objective of holding and managing shareholdings via the modalities enshrined in the Decree-Law 495/88.
Hence, all the three companies (i.e., Lineas – Concessões de Transportes SGPS, Global Roads Investimentos SGPS and NOS-SGPS) fall within this definition as they manage holdings in businesses other than those
operating in the financial (and insurance) sector. In fact, they are engaged in the transportation sector. However,
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the crucial point of the case is whether those companies can be interpreted to fall within the definition of financial institutions under EU law, meaning according to point (22) of Article 3(1) of Directive 2013/36/EU (‘CRD’)
which, in turn, refers to point (26) of Article 4(1) of Regulation (EU) 575/2013 (‘CRR’). According to the latter
point, a financial institution under EU law is an undertaking whose principal activity is the acquisition of holdings or other activities listed in points 2 to 12 and point 15 of Annex I of the CRD. Similarly to the Portuguese Decree-Law 495/88, the CRR excludes insurance companies from this definition.
The identification of those Portuguese holding companies within the meaning of point (26) of Article 4(1) of
the CRR would imply the exemption of those companies from stamp duties as point (e) of Article 7(1) of the Portuguese Code on the tax on documented legal transactions (Código do Imposto do Selo) has listed financial institutions within the meaning of EU law among those being exempt from tax.
In light of the above framework comprehensive of EU and national law, the Court of Justice had to focus on
interpreting whether the objective of those Portuguese holding companies, i.e., the management of shareholdings
in other companies not directly carrying out activities in the financial sector, would be sufficient to consider them as financial institutions according to the above EU legal framework. In this respect, the judgement of the Court
of Justice shall not be seen as having repercussion exclusively for Portuguese companies and their legal framework, but the interpretation of the Court has the wider purpose of ensuring uniformity in the application of EU law
in all Member States. It is also relevant to draw the attention on a recent amendment to point (26) of Article
4(1) of the CRR by Regulation (EU) 2019/876 (‘CRR II’) which explicitly excludes ‘pure industrial holdings’ from the meaning of financial institutions. Although this modification would have facilitated the interpretation of the present case in light of the Portuguese regime enshrined in Decree-Law 495/88 as explained above, the
amendment brought up by the CRR II does not apply ratione temporis, meaning by reason of time, as pointed out both by Advocate General Medina’s Opinion and reiterated by the Court of Justice in its judgement.
AG Medina further argued that the mere absence in the activities of holding companies of an explicit reference
to credit institutions or investment firms should not preclude the classification of those holdings as financial
institutions due to the non-exhaustive nature of the list present in point 26 of Article 4(1) of the CRR. Nevertheless, AG Medina considers that non-exhaustive list as ‘guiding terms’ which, however, apply to elements already present
in the list. From this perspective, holdings considered as financial institutions are those containing institutions or other holdings having connections to banking and financial services. In this sense, the term ‘connections’ is used to refer to activities.
As for the judgment, the Court of Justice undertook a restrictive reasoning stating that undertakings professionally engaged in the acquisition of holdings which carry out activities other that those relating to the financial sector
are excluded from the definition or, better, the ‘concept’ of financial institution according to point (22) of Article 3(1) of the CRD as referring to point 26 of Article 4(1) of the CRR. The reasoning of the Court of Justice in
choosing for a restrictive interpretation of the provisions contained in both CRD and CRR is not limited to
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clarify selected EU law terminology and, thus, providing uniformity. Since the CRR has been enacted in order to
provide for a framework for the prudential regulation of a variety of financial institutions, the Court of Justice had to consider the multitude of regulatory standards and requirements to be applied to those institutions. This choice should be seen from the perspective of the post-GFC methodology and alignment with international standards which aimed at identifying risky activities and related institutions as targets of special regulatory regimes.
Hence, the impact of this case does not concern pure terminological issues or issues related to tax duties. By deciding on whether such companies qualify as financial institutions means, most of all, whether they should be subject to the complex set of rules that have been enacted at the EU level as a result of the GFC.
Pier Mario Lupinu holds a PhD in Banking and Finance Law jointly from the Universities of Luxembourg and Roma Tre and he is currently employed as a Legal Analyst at the European Central Bank. He has been a young researcher at the European Banking Institute, a Visiting Scholar at the Columbia Law School in New York and a DAAD-funded Visiting Researcher at the Leibniz Institute for Financial Research SAFE at the Goethe University Frankfurt.
SUGGESTED CITATION: Lupinu P..; “To be or not to be a financial institution? Portuguese national law uncertainties ‘help’ the Court of Justice in shedding the light on ambiguities over EU law prudential terminology ( Joined cases C‑207/22, C‑267/22 and C‑290/22)”, EU Law Live, 07/11/2023, https://eulawlive.com/op-ed-to-be-or-not-to-be-a-financial-institution-portuguese-national-law-uncertainties-help-the-court-of-justice-in-sheddingthe-light-on-ambiguities-over-eu-law-prudentia/
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“Clariant Fails to Overturn €155.8 Fine in Ethylene Cartel Case (Case T-509/20)” Thomas Harbor In Case T-590/20, Clariant AG and Clariant International AG v European Commission, the General Court
dismissed Clariant’s action for annulment against a Commission decision of 2020 imposing a €155.8 million fine for a taking part in a buyers’ cartel on the ethylene market. It was the first purchasing cartel settlement decision in the chemicals sector. Background The Commission found that Clariant, alongside three other undertakings, colluded to lower the price paid for ethylene between 2011 and 2017 in Belgium, France, the Netherlands, and Germany. The undertakings aligned in setting a monthly benchmark price prior to their negotiations with suppliers. None of the undertakings are established in the EU.
One of the participants blew the whistle first in June 2016, seeking immunity from a fine pursuant to the Leniency Notice. The Commission initiated proceedings in July 2018, and the undertakings concerned agreed to a settlement. The Commission adopted its infringement decision in Case AT.40410 on 14 July 2020.
Clariant International AG (jointly and severally responsible with its parent company Clariant AG) was imposed the largest fine, whereas the immunity applicant avoided a fine altogether. Clariant sought the partial annulment of the Commission decision, and in the alternative a reduction of the fine. The Commission’s Broad Discretion on Setting Fines In calculating Clariant’s fine, the Commission increased the base amount (i) by 50% due to the aggravating
circumstance of recidivism, pursuant to point 28 of the guidelines on the method setting fines (the ‘Guidelines’);
and (ii) by another 10% to achieve a sufficient level of deterrence in the fine, pursuant to point 37 of the Guidelines. The Commission then granted (i) a 30% reduction to ensure that the fine does not exceed 10% of the turnover of the companies in 2019; and (ii) a 10% reduction to for their cooperation in the settlement procedure.
The Court found that the Commission did not err in law in applying points 28 and 37 of the Guidelines. Clariant
had participated in a similar infringement to Article 101 TFEU in 2005. The Court stressed that ‘any repeat infringement is among the factors to be taken into consideration in the analysis of the gravity of the infringement in
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question’ (para. 38). This also applies where the repeat offender previously escaped a fine as a leniency applicant, as was the case for Clariant in the 2005 acid cartel case.
The Court held that the Commission exercised its right of discretion in applying the increase in the basic amount of the fine, without any disregard to the ‘principles of proportionality, equal treatment, the protection of legitimate expectations and legal certainty’ (para. 64).
In particular, the Court found the Commission was right to conclude from the relatively short time frame between the two infringements (seven years) to infer that Clariant did not ‘draw the appropriate inferences from the finding that it had infringed the competition rules referred to in that decision’ (para. 81).
Clariant also held that the Commission had incorrectly increased the fine pursuant to point 37 of the Guidelines. The Court noted that, in line with established case law, its review of the legality is limited to the absence of
manifest error in assessing the deterrent effect of the increase in the fine. The Court endorsed the Commission’s
discretion in assessing the deterrent effect, noting that it is not required to take into account the actual effect of the conduct (para. 141).
Right of Appeal Against Fines in Settlement Cases The Commission had asked the Court to increase Clariant’s fine by another 10%, thus eliminating the effect
of the reduction obtained for settling pursuant to point 32 of the Guidelines. The Commission considered that
Clariant’s decision to cooperate and settle ‘was purely strategic and nothing more than a means of achieving a
reduction of the fine, with a view to subsequently challenging the decision on the basis of the same facts and matters which formed part of that common understanding, in order to obtain further reductions from the EU Courts’ (para. 200). However, the Court endorsed Clariant’s right to appeal the decision, noting that it was in the Commission’s power to discontinue settlement discussions.
Overall, Case T-509/20 gives a welcome clarification on the Commission’s margin of discretion in setting fines in cartel cases in light of broader policy imperatives and of applicants’ rights to challenge such fines.
Thomas Harbor works in the competition practice of an international law firm in Brussels. He holds an LL.M in EU Law from the College of Europe, a Master in Management from HEC Paris, and a Master in Public Economic Law from Sciences Po. Thomas is the Founding Editor of What’s up EU, a weekly newsletter on current EU affairs. The views expressed in this blog post are the author’s and do not represent the views any of his current or past employers.
SUGGESTED CITATION: Harbor. T.; “Clariant Fails to Overturn €155.8 Fine in Ethylene Cartel Case (Case T-509/20)”, EU Law Live, 09/11/2023, https://eulawlive.com/analysis-clariant-fails-to-overturn-e155-8-fine-in-ethylene-cartel-case-case-t-509-20-by-thomas-harbor/
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“The Court of Justice upholds the Austrian derogation regarding VAT on broadcasting services despite earlier case law on the supply of services for consideration (Case C-249/22 BM v GIS)” Sam van der Vlugt The current case (C-249/22, BM v GIS) is the continuation of an earlier dispute handled by the Court in Case
C-11/15 (Český rozhlas), as is also pointed out by Advocate General Szpunar in his Opinion (which unfortunately
is not available in English yet). In that earlier case, the Court ruled that the activities of public radio organisations
that are financed through a mandatory contribution (a ‘broadcasting fee’) by the possessors of a radio must not
be seen as a supply of services for consideration within the territory of a Member State that falls within the working of the Sixth EU VAT Directive (in Art. 2(1)(c) of that directive). One would suppose that such a verdict can be straightforwardly applied to the situation at hand, however, the case is complicated by the existence of a derogation that was part of the Austrian Act of Accession to the Union that allowed it to remain levying VAT on these services (see Article 151(1) and the second indent of the first subparagraph of point 2(h) of Part IX of
Annex XV to the Act of Accession). Again, this seems to turn this case into a straightforward one, but both the
Advocate General and the Court demonstrates in their Opinion and Judgment respectively that there are several
interesting observations to make as to the nature of the supply of services for consideration, the interpretation of derogations and the effectiveness of EU law.
Considering the facts, which have been slightly disclosed already above, BM (the claimant) receives radio- and television programmes, for which she has to pay a fee to GIS. She requested a return of the VAT on this fee
(amounting to 100,57 EUR for the period of 1 October 2013 up to 31 October 2018), on grounds of this VAT
being charged unduly with reference to the Český rozhlas case. This made that, in essence, the current case dealt
with the question if there are any circumstances that make it logical to deal differently with this case and derogate from the earlier Judgment. The earlier mentioned derogation that was awarded to Austria upon accession to the Union obviously plays a pivotal role.
However, the first question to be resolved, and that came up also because of the elaborate references of the
referring Court to previous case law, is whether the facts lead to the conclusion that one is actually dealing with ‘the supply of services for consideration’ as contained in Art. 2(1)(c) of the VAT Directive. As the Court points
out, a supply of a service ‘for consideration’ presupposes a causal and direct link between the service supplied and the consideration received. The main conclusion from the Český rozhlas case was that this was not the case when
a mandatory contribution was made for the possession of a radio as ‘the payment of that fee does not form part
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of a legal relationship involving a reciprocal exchange of services but rather is the performance of an obligation imposed by law.’ Again, analogous application seemed not far away in the Austrian case.
However, that conclusion would not be taking into account the derogation. In this case, the Court had to balance
this derogation and the Directive itself. The derogation is however itself a part of the VAT Directive and enclosed in Art. 378 (1) of said Directive. In this context, the Court clarifies that the derogation must be seen as giving
Austria the opportunity to maintain an existing system of taxation on the broadcasting fee, but not introduce a new one. The 2011 amendment to the Austrian legislation made because of technological innovations does not mean
that a new form of taxation has come into existence in this respect. The Court then does not contradict its earlier case law on the criterion of the supply of a service ‘for consideration’, but rather swiftly moves past this earlier
conclusion by reference to the derogation and thereafter looks at the objective pursued by the relevant Articles of the VAT Directive, that thus also contains and implements the Austrian derogation. It can do so because of the
fact that, by means of the derogation, the Austrian system itself has not been part of the harmonised EU law VAT system from the outset.
The only provision that the Court thus effectively must take account of is the derogation contained in the VAT Directive. In interpreting that derogation it takes account of not only the wording, but also the context and
objectives of the legislation of which it forms part. That objective is to have Austria maintain its value added tax on public broadcasting activities, irrespective of whether that activity is covered by the concept of a ‘supply of services
for consideration’. By means of these legal gymnastics, a case that seemed very straightforward at a first glance has an additional depth to it that provides for interesting reading.
Sam van der Vlugt is PhD student at the university of Salerno and the university of Antwerp.
SUGGESTED CITATION: Van der Vlugt, S.; “The Court of Justice upholds the Austrian derogation regarding VAT on broadcasting services despite earlier case law on the supply of services for consideration (Case C-249/22 BM v GIS)”, EU Law, https://eulawlive.com/analysis-the-court-of-justiceupholds-the-austrian-derogation-regarding-vat-on-broadcasting-services-despite-earlier-case-law-on-the-supply-of-services-for-consideration-case-c249-22-bm-v/.
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Op-Ed: “Science to the people? The reach of transparency into EU agency science” Marta Morvillo This Op-Ed is part of a Symposium on EU Agencies. See also the Op-Ed by Merijn Chamon, by Marta Simoncini, by Graham Butler, by Miroslava Scholten, by Jonathan Bauerschmidt and Diane Fromage, by Ruben Della Pia and Mariolina Eliantonio, by Annalisa Volpato by Tomáš Buchta , by Marko Milenković and by Oana Stefan. More Op-Eds will follow shortly on EU Law Live.
The past years have seen momentous developments in terms of transparency of EU agency science. The European
Food Safety Authority (EFSA) has undergone a far-reaching reform, following two landmark judgments of the Court of Justice of the European Union (Tweedale and Hautala) and wide public contestation over the
authorisation of the pesticide glyphosate (see here and here). The COVID-19 pandemic put the European Medicines Agency (EMA) in the spotlight, in particular with regard vaccines approval. The Agency reacted with
an unprecedented level of disclosure of clinical trial data. These developments have been taking place against the
backdrop of growing mistrust in regulatory science, often fueled by concerns over agencies’ independence and the quality of their scientific opinions.
What is the role of transparency in a field, such as risk regulation, characterised by high technical complexity?
And where do EU agencies stand when it comes to making the scientific studies underpinning their assessments
accessible to the public? In this Op-ed, I will articulate four dimensions of transparency in risk regulation and argue that, while in the aftermath of scandals and crises EU agencies seem to have taken a promising path towards proactive transparency, issues of fragmentation and opacity persist. At the juncture of science and public interest The scientific studies assessed by EU agencies are located at a critical juncture of the EU’s decision making in the
field of risk regulation. The collection and evaluation of scientific data, such as those contained in clinical trials and
toxicity studies, lies at the core of the activities EFSA, ECHA, and EMA carry out in the context of registrations
and marketing authorisations for products such as chemicals, pesticides, and human medicines. The Agencies’ risk
assessments form the basis of the Commission’s risk management measures (e.g. the authorisation or registration of a product or substance).
These procedures entail a strong public interest component, in so far as they aim at ensuring the quality and
safety of the products entering the internal market, for humans, animals, and the environment. In this context, it is important to keep in mind that the scientific data on which agencies’ risk assessments are based is in large
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part provided by private actors seeking the authorisation or registration of their products. As a result, they often contain information which is claimed to be commercially confidential. Four dimensions of transparency What is the role of transparency in this context? First, considering the highly influential yet contested nature of
EU agencies’ risk assessments, a high standard of accountability is of the essence, and transparency can play an important role in these respects: by making decision-making processes, including their scientific bases, visible, it is a precondition for effective public scrutiny.
Second, transparency enhances trust. In the landmark Tweedale and Hautala cases, the Court of Justice stated that: ‘by allowing divergences between various points of view to be openly debated, [transparency] also contributes to increasing those citizens’ confidence in those institutions’ (para. 75). At a time of mistrust in science, making the scientific evidence underpinning risk management decisions publicly available can therefore play a critical role in fostering citizens’ confidence in the EU’s experts.
Third, the transparency of scientific studies opens up the peer-review process to the scientific community at large. Scientists beyond the experts working at EU agencies can therefore contribute to ensuring the very epistemic quality of the agencies’ risk assessments.
Fourth, transparency is key to the broader goal of open science: by granting wider access to raw data, research
protocols and methodologies, it fosters a more inclusive and sustainable scientific process, based on data sharing and avoiding duplication of studies.
Horizontal and sectoral transparency regimes Transparency is ingrained into the EU legal order at constitutional (Article 11 TEU and Article 15(1) and (3) TFEU) and legislative level. Article 1 of the Access Regulation establishes the principle of the ‘widest possible
access’ to all documents held and generated by EU institutions and also applies to the scientific studies examined
by EU agencies. The Aarhus Regulation sets an even higher transparency standard for environmental information, for which it establishes an overriding public interest in disclosure (Article 6(1)). Both the meaning and the reach of environmental information have been interpreted broadly by the Court of Justice. Transparency is however not
an absolute value. The EU legal framework also provides protection to competing interests that might be hindered by disclosure, such as commercial confidentiality, the administration’s space to think, and personal data (Article 4(2) Access Regulation). These are however exceptions and should be interpreted strictly.
Besides the horizontal rules enshrined in the Access and the Aarhus regulations, the public accessibility of
scientific studies is governed by the sectoral rules set out in the EFSA, ECHA, and EMA founding regulations
and transparency policies (here, here, and here). These sectoral frameworks have direct implications on the level
of transparency enjoyed by the scientific studies, depending on the agency considered: until recently, for example, only the EMA provided for a definition of commercially confidential information.
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Proactive transparency It is precisely these sectoral frameworks that have undergone significant developments in the last few years. The EMA has been the first pharmaceutical regulator worldwide to publish clinical trial data. Their publication
is now enshrined in the Clinical Trials Regulation. Since 2005, EMA also publishes a Public Assessment Report (EPAR) for each of its authorisation procedures, including information over the product and the Agency’s risk assessment process. The EPAR is published upon conclusion of the procedure and includes a public-friendly overview.
The reform of the General Food Law (GFL) re-designed EFSA’s transparency policy: the agency is now adopting a system of notification of studies, offers pre-submission advice to applicants, and requires applicants to submit two versions of the application dossier, one for immediate disclosure, the other to be checked by the Agency for
the presence of commercially or otherwise confidential information (see the ‘new’ Article 38(1) GFL). EFSA’s
new transparency policy has been mainstreamed into all the sectoral regulations in the food safety realm and entered into force in 2021.
These developments have been seen as signaling a shift from reactive to proactive transparency. The former is
based on requests for access to documents lodged by individuals according to the Access Regulation. Proactive transparency, on the other hand, presupposes the systematic disclosure of scientific data by the agencies, regardless of specific requests.
In a context of proactive transparency, the comprehensibility of the disclosed information to a non-expert audience
becomes of the essence. For transparency not to become a merely performative exercise, it is critical that the new transparency mechanism take communication strategies (e.g. laymen summaries and risk communication more generally) seriously.
Sectoral fragmentation While the shift towards proactive disclosure is a welcome development, the picture of agency science’s transparency
remains a fragmented one. First, this shift has not yet reached the ECHA. Once a pioneer of open and collaborative governance, the Chemicals Agency is currently lagging behind in terms of transparency. Its transparency policy dates back to 2014 and, as noted by Hickey and Weimer, the REACH regulation does not include the possibility of an overriding public interest in disclosure leaving instead space for presumptions of confidentiality for certain categories of information (see Article 118 REACH).
Second, research shows that even between EFSA and EMA, differences remain on crucial elements such as the meaning and scope of commercially confidential information. Article 39(2) of the GFL contains an exhaustive list of the information for which confidential treatment can be requested, while the EMA still enjoys significant
discretion when defining the content of commercial confidentiality. These different degrees of discretion are
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While they may be explained with the different regulatory contexts in which the agencies operate, they seem
hard to justify in light of the numerous areas in which agencies are required to cooperate, such as antimicrobial resistance and pesticides residues in food. Outlook The shift from reactive to proactive transparency has far-reaching implications. On the systemic level, it represents an important change of ‘regulatory mindset’, where transparency is effectively the rule and confidentiality the
exception, to be granted only in cases of a clearly substantiated and legitimate interest. It also poses the question of what will be the future of access to documents: will it become residual vis-à-vis the consolidation of proactive
transparency, at least in the field of risk regulation? Will this shift be able to reinvigorate the long-stalled discussion over the reform of the Access Regulation?
On the more pragmatic level, proactive transparency significantly increases the agencies’ workload. For agencies to be able to fully carry out their tasks under a proactive paradigm, including ensuring the comprehensibility of the information they disclose, their new tasks need to be met with adequate resources in terms of both finances and staff.
The developments discussed above have been taking place through a circulation of transparency mechanisms from one agency to the other. Think for example of pre-submission advice, an established practice within EMA, which
has now been adopted also by EFSA. One can therefore wonder whether the innovations introduced through the reform of the GFL will ‘circle back’ to EMA and perhaps even reach ECHA, in what looks like an incremental
development of proactive transparency. Against this background, addressing the existing discrepancies in terms of agency discretion and reach of the exceptions to disclosure is a priority in order to ensure the effectiveness of proactive transparency in a context of increased agency collaboration.
Marta Morvillo is Assistant Professor in European Legal and Economic Governance at the Department of European Studies, University of Amsterdam and author of ‘The role of experts in political decision-making’ Max Planck Encyclopedia of Comparative Constitutional Law (2022); ‘Who shapes the CJEU regulatory jurisprudence? On the epistemic power of economic actors and ways to counter it’ European Law Open (2022) (with Maria Weimer). This Op-ed builds an article co-autored with Alie de Boer and Sabrina Roettger-Wirtz: ‘Fragmented Transparency: The Visibility of Agency Science in European Union Risk Regulation’ European Journal of Risk Regulation (2023).
SUGGESTED CITATION: Morvillo, M.; “Science to the people? The reach of transparency into EU agency science”, EU Law Live, 10/11/2023, https:// eulawlive.com/op-ed-science-to-the-people-the-reach-of-transparency-into-eu-agency-science-by-marta-morvillo/
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“Quasi-judicial review in EU agencies: opportunities and challenges” Oana Stefan This Op-Ed is part of a Symposium on EU Agencies. See also the Op-Ed by Merijn Chamon, by Marta Simoncini, by Graham Butler, by Miroslava Scholten, by Jonathan Bauerschmidt and Diane Fromage, by Ruben Della Pia and Mariolina Eliantonio, by Annalisa Volpato by Tomáš Buchta and by Marko Milenković. More Op-Eds will follow shortly on EU Law Live.
No matter if we look at EU’s agencies through an experimentalist governance lens, or from the perspective of the
principal/agent theory, two important conclusions emerge. EU agencies are some sort of work in progress, as we
experiment with regulation in complex, highly technical areas; and control, for political scientists, or accountability, for the lawyers, in such evolving landscapes is tricky to pin down. This is reflected better in the puzzling case law
and institutional or regulatory practice regarding the Boards of Appeals of EU agencies (BoAs) which places the
latter’s work at various points of a spectrum ranging from a purely administrative to a quasi-judicial character. There are currently 38 EU agencies, eleven of which enjoy such independent internal body tasked with reviewing their decisions (there is one Joint Board of Appeal –JBoA– for the financial agencies). The literature on BoAs
is abundant, including a recent monograph, whilst an empirical project aims to create a systematic data base of all their decisions. This contribution limits itself to sketching some of the opportunities and challenges of such review fora.
BoAs: new opportunities for enhanced review BoAs instil extra accountability channels for the work of EU agencies. As documented by Krajewski, the BoAs present the opportunity of being more thorough in technical assessment, as well as engaging deeper with the
litigants, enhancing the legitimacy of the dispute resolution process. The Court of Justice holds these boards to
very high standards of review. In Aquind, the Court found that, in the interest of individual rights protection,
BoAs are expected to perform thorough substantive reviews of contested decisions. Since the Court has limited jurisdiction to check agency decisions only with regards to manifest errors of appraisal, misuse of powers, or
manifest excess of discretion, the review bodies seem more appropriate for a more comprehensive control including complex technical and economic appraisals. Indeed, research and practice show that Boards are engaging in more sophisticated analysis, suggesting a positive outlook for individual rights.
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The BoA system also alleviates to a certain extent the docket of the European Courts, whilst offering specialised
ways of redress. This is mentioned in the regulatory framework instituting these BoAs. EASA’s founding Regulation
refers to the need for remedies suited to the special character of the field of aviation; ACER’s Regulation mentions
procedural economy as a raison d’etre for the BoA. Procedural reforms of the Court reflect concerns around the case load. In 2019, Article 58a was added in the Statute of the Court of Justice, creating a filtering mechanism for appeals against decisions of the General Cout concerning a decision of an independent BoAs of four EU
agencies, or independent BoAs set up after May 2019. Accordingly, such appeals are allowed to proceed by the
Court of Justice only in so far as they raise issues which are significant with respect to the unity, consistency, or development of Union law. A current proposal for further reform extends the application of the filtering mechanism to independent BoAs of other agencies existing already in 2019 but not mentioned in the Statute. BoAs: ambiguous status and rule of law challenges In Aquind, the Court of Justice made sweeping statements tagging BoAs of agencies as ‘administrative revision bodies’ which perform ‘quasi-judicial’ functions (para. 59). Such general approach is problematic, as these boards are very different.
Pander Maat and Scholten identify different configurations of organisational and functional independence of
BoAs. They have procedures and powers that resemble to a varying degree those of a mini-court. In Scope Rating, the JBoA was deferent to the ‘margin of appreciation’ to which ESMA was entitled because it did not consider
itself to be in ‘functional continuity’ with the Board of Supervisors, similarly to EASA’s BoA, but unlike EUIPO’s BoA. Some BoAs have inquisitorial features, such as the EUIPO and CPVO, and have the obligation to assess all
relevant matters of fact and of law, even if a specific grounds of appeal was not brought by the appellants. Yet, other boards, such as that of the ECHA, employ adversarial procedures, and are limited to assess only the issues raised
by applicants (as confirmed by the Court here and here). In this context, it is hard to consider that BoAs provide for proper judicial review. De Lucia warns that the current filtering mechanism of Article 58a of the Statute of the Court of Justice (and implicitly its potential extension) might lead to outcomes contrary to Art. 47 of the Charter
of fundamental rights. This is because, already now, very few appeals are, in practice, allowed to proceed. Moreover, not all agencies can bring cases against their BoAs decisions in front of the General Court. Whilst the solution
mostly lies with the legislator in strengthening the independence of these bodies, practices of the General Court might need to change, such as that of not admitting new elements of law and fact in appeals.
The remit of BoAs’ powers also varies, which might undermine coherence. For instance, the BoAs of EUIPO, CPVO, and ECHA may exercise any power which lies within the competence of the Agency. However, as observed by Chamon and Volpato, this competence has a different meaning in the case of ECHA, as its BoA can only
address points raised by applicants. A 2019 reform limited ACER’s BoA competence to either confirm a decision, or remit the case to the competent body. If the latter is chosen, the BoA ‘is capable of shaping the decisions taken
by the Agency in so far as the latter is bound by the statement of reasons of the Board of Appeal’ (T-735/18,
55). Yet, the decision-making procedures by agencies involve rounds of consultations with the stakeholders
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and structured input from market operators or national competent authorities. Following such processes whilst complying to the letter with the decision of the BoA becomes a rather complex enterprise.
It emerges that some of the challenges of the BoAs system are intrinsic in the sheer variety of these bodies. At the same time, the legislative framework and the organisational infrastructure is not yet allowing to unleash the whole individual rights protection potential of BoAs. Academics and even Court members have been actively calling
for more control over non-binding, informal instruments, such as the soft law issued copiously by EU agencies. These instruments are not directly reviewable by EU Courts, although they can be checked indirectly following preliminary references. Yet, BoAs were not granted the competence to assess agency soft law instruments, although this was proposed by the European Parliament. Another issue for reform is locus standi. In most of the cases, the
Agency Regulations mirror the restrictive pre-Lisbon procedures on direct actions against EU acts in front of the Court of Justice, requiring for direct and individual concern to be satisfied for challenges of decisions which are not
addressed to the appellant. As confirmed by decisional practice, BoAs interpret direct and individual concern in
the same way these are interpreted by the Court under Article 263 TFEU. Yet, given that some of the challenged Agency decisions might fit the description of regulatory acts, it appears that in certain cases the threshold for standing is more stringent in the front of the BoA than in front of the Court. Far from being of only academic
interest, this issue was flagged by a BoA (commentary here), and is currently pending before the General Court. From an organisational infrastructure point of view, requiring high standards of substantive review from all BoAs appears to disregard the fact that resources available to these bodies are not equal. As documented, the boards of
EU financial agencies are very different in the support they get, and lack appropriate registries. At the same time, ECHA’s BoA enjoys members who are employed full time and have supporting staff. ACER’s BoA has a separate budget line in the budget of the agency, yet this budget is limited to start with, as ACER can only raise fees in relation to certain services it performs whilst relying otherwise on donations and voluntary contributions. It seems
thus rather idealistic to claim that resources are immaterial and that the BoAs should exercise their duties under any circumstances.
A somewhat paradoxical challenge is that the current setting appears sometimes detrimental to procedural economy. An example is HUAT, where the General Court annulled both a BoA decision confirming a decision
by ACER and part of a Commission Regulation on which ACER’s decision was based. During all this back and forth from the BoA to the General Court, a bidding auction for a project was launched as required by the contested ACER decision, yet it was abandoned as there was no interest from the market. Lacking both object
and legal basis of the contested ACER decision, the resumption of proceedings in front of the BoA appears rather
superfluous. Yet, Article 266 TFEU requires the institution whose act has been declared void to take the necessary measures to comply with the judgment of the Court of Justice. Thus, in HUAT, proceedings were relaunched
before the BoA, parties were invited to submit observations, which lead to a quite lengthy decision that there was no need to pursue the case.
Stemming from this example, a more general observation is that proceedings before BoAs and subsequent appeals
to the General Court take time. Yet, time is of essence in most of the sectors in which EU agencies are active. Add www.eulawlive.com
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to this sudden crises shifting the very paradigms on which entire sectors are based, and it does not require much imagination to envisage situations in which the BoAs and the Courts decisions on cases lag behind the rapidly evolving regulatory frameworks. This can challenge principles such as non-retroactivity, as BoAs are required
to conduct their assessment in the light of new legal provisions which were not in force at the time when the contested decision was issued. Conclusion This contribution appears to have dedicated a larger word space to the challenges raised by BoAs in the European system of administrative and judicial review. Yet, it is fair to state that the benefits of the BoAs outweigh these
challenges, with Stefan&den Hertog and Volpato calling for strengthening control of agencies lacking such bodies. Whilst BoAs could prove themselves useful in providing for more effective review of the impressive output of EU agencies, outstanding issues with the design of the system show that compliance with the rule of law is a work in progress. This requires holistic reforms involving, beyond mere extensions of the filtering mechanism at the Court
of Justice level, a substantive tweaking of the rules with regards to the independence, composition, procedures, and powers of the BoAs themselves.
Dr Oana Stefan is Reader (Associate Professor) in European Law at King’s College London. She has taught amongst others at Sciences Po Paris, HEC Paris, University College Dublin, the College of Europe, ESSEC and Bocconi Milano and has worked as an advisor for European integration during Romania’s accession. Dr Stefan researches on the European Union, in particular energy, State aid law, soft law and judicial politics. A selection of Dr Stefan’s publications is available here.
SUGGESTED CITATION: Stefan, O.; “Quasi-judicial review in EU agencies: opportunities and challenges, EU Law Live, 08/11/2023, https://eulawlive. com/op-ed-quasi-judicial-review-in-eu-agencies-opportunities-and-challenges-by-oana-stefan/
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THE LONG READ
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EU Women on Boards Directive: Wrong tool, wrong problem? Eleanore Hickman* Late last year the EU Women on Boards Directive (the ‘Directive’) was dusted off after over 10 years of delay, and finally brought into effect. The Directive requires Member States to impose a 40% quota for the underrepresented
gender amongst the non-executive directors of listed companies. In this Long-Read, longstanding questions as to
whether a quota is the right course of action are considered in the light of the new Directive and in the context of boardroom diversity across the EU. Accepting that action to address the diversity of corporate boards is still necessary, this Long-Read also considers the Directive’s potential effectiveness. What does the Directive require from companies? The Directive’s purpose is to diversify corporate boardrooms in Europe in order to ‘boost economic growth,
encourage labour market mobility, strengthen the competitiveness of listed companies and achieve gender equality
on the labour market’.1 It requires EU Member States to put in place a 40% quota for the underrepresented gender on non-executive boards in listed companies, or 33% across the whole board (thereby including the executive).2
This quota should remain in place until the Directive expires automatically at the end of 2038, whether or not it has achieved its objective.3
Indirectly, the Directive places a number of requirements on companies. Procedurally, companies will need to
report to the relevant competent authority in their own Member State, in order to state the details of their quota compliance.4 The target date for companies to reach the 40% quota is 26 June 2026. Companies that have not met the quota requirements are required to provide reasons, together with ‘a comprehensive description’ of what measures they have implemented or plan to implement in order to address this.5 Such companies must also
address their appointment processes by ensuring they apply ‘clear, neutrally formulated and unambiguous criteria’
* Lecturer in Corporate Law and Governance, University of Bristol. This Long-Read draws on a previous article: Eleanore Hickman, ‘The EU Directive on Women on Boards’ (2023) European Company Law. Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 November 2022 on improving the gender balance among directors of listed companies and related measures (Text with EEA relevance) 2022 recital 25. 2. Directive (EU 2022/2381) Article5 (1)(a). 3. Directive (EU 2022/2381) Article 14. 4. Directive (EU 2022/2381) Article 7(1). 5. Directive (EU 2022/2381) Article 7(2).
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established in advance of the selection phase.6 There are no EU penalties imposed for failing to meet the quota.
However, failure to fulfil the procedural requirements that kick in as a consequence of not meeting the quota, should result in an ‘effective, proportionate and dissuasive’ penalty, which can include fines or even the annulment of a board appointment.7
There are similarities between the ‘comply or explain’ mechanisms used in various soft laws (including the
UK Corporate Governance Code 2018), and the Directive’s implementation method which might similarly
be described as ‘achieve or explain’. The comply or explain regulatory mechanism is appreciated because of its flexibility. The explanatory element to the Directive is similar in that it considerably softens the application of the mandatory rule to the point it can hardly be considered mandatory. The value judgement needed to decide whether explanations for failure to comply are adequate in each case are considerable and unclear.
Perhaps the least practically effective requirement of the Directive, is the obligation to give priority to the
underrepresented gender in board candidates of equal merit.8 It is unlikely to be impactful because candidates for
roles on the boards of listed companies will not have the same ‘suitability, competence and professional performance’.9
Even in the improbable scenario that the candidates have the same length and seniority of experience at the same
type and prominence of companies, even if they score precisely the same in terms of competence metrics, fitness
and propriety and neither have any conflicts of interest, there will always be something upon which they can be differentiated that goes beyond gender. If an appointment committee has a preferred candidate, it will always be possible for them to point to factors in a candidates background to justify their decision.
To mitigate against the possibility that companies will ultimately appoint the candidate they prefer, regardless
of merit, the Directive makes it possible for unsuccessful candidates to challenge the appointment decision. In that case the company would need to show that the successful candidate was equally qualified (if of the
underrepresented gender) or better qualified.10 This obligation conflicts with the confidential nature of board
appointment processes. Realistically, candidates for corporate board positions are highly unlikely to make an
overt challenge to a listed company’s decision to appoint another candidate. The evidentiary requirements are
exceptionally high, given the candidate would need to establish they are more meritorious than their competitor. Adding weight to this difficulty would be the risk of negative publicity within a candidates’ industry regarding their position, making attainment of future jobs much harder. What does the Directive require from Member States? It is for Member States to impose ‘effective, proportionate and dissuasive’ penalties on companies who fail to
6. Directive (EU 2022/2381) Article 6(1). 7. Directive (EU 2022/2381) Recital 48. 8. Directive (EU 2022/2381)
Article 6(2). 9. Directive (EU 2022/2381) Article 6(2). 10. Directive (EU 2022/2381) Article 6(3). www.eulawlive.com
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comply with the quota provisions of the Directive.11 What the penalties are is for Member States to decide.
From the experience of jurisdictions where there are already quotas in place it is clear there is much that can be
varied in this regard. In a study examining the 10 European jurisdictions in which there was already a quota, only
seven of them provide any method of enforcement.12 These jurisdictions employ a wide variety of methods, from
dissolution for non-compliance in Norway, to suspension of the payment of fees for other board members in
France.13 However, whilst the specifics of enforcement remain a matter to be decided at a national level, the fact that effective and dissuasive enforcement is mandated sets a base level for Member States to meet, albeit one that is subject to interpretation.
Other than imposing and enforcing the quota on companies in their jurisdiction, Member States are required to report to the European Commission by the end of 2025 and at two-year intervals thereafter, on the progress of the
relevant companies. The report should be comprehensive about what has been done to achieve the gender balance sought by the Directive.14 The European Commission will review the reports and then make its own report to the
European Parliament by the end of 2030 (and every two years thereafter). Particular concern will be paid to how
‘efficient and effective’ the Directive is at achieving its objectives.15 Undoubtedly the Directive bestows additional
administrative burden on companies and Member States. The extent of the burden will depend on how seriously the obligations are taken. Jurisdictions who responded favourably to gender balancing regulations in the first
place may prove more diligent than others. However, Member States should be judged on the authenticity of the actions they take as opposed to the statistics of boardroom diversity because each Member State has different
cultural and contextual backgrounds. In any event, the wheels of this EU regulatory machinery are likely to be
slow, making it a long time before we can ascertain how seriously Member States are taking their obligations and consequently the ultimate impact of the Directive. Why impose quotas now? Given that six EU countries already have a quota in place and that ten (including all those with quotas) have over 30% women on boards, it may seem as though the Directive is being introduced after the hard work has been
done. France already exceeds the quota requirement with 45% women on boards.16 France has had a quota since
2011. 17 However, there remains minimal consistency across the EU and most Member States continue to suffer
from a substantial imbalance in boardroom gender representation. As of 2022, Hungary, Estonia and Cyprus continue to have less than 10% women on listed company boards.18 More than half of EU countries continue 11. Directive (EU 2022/2381)
Article 8 (1). 12. Heike Mensi‐Klarbach and Cathrine Seierstad, ‘Gender Quotas on Corporate Boards: Similarities and Differences in Quota Scenarios’ (2020) 17 European Management Review 615, 619. 13. Mensi‐Klarbach and Seierstad (n 12). 14. Directive (EU 2022/2381) Article 13(1). 15. ibid Article13(4).
16. European Women on Boards, ‘Gender Balance Quota and Targets in the European Union’ (2022) 3. 17. ‘French Law to Increase Number of Women Directors’ (Eurofound) 18. European Women on Boards (n 16).
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to have less than 30% women on boards. These are all countries that have no quota or very loose measures for
improving boardroom gender balance in place. By contrast, the 6 countries that have imposed their own quota are all in the top eight countries for highest proportion of women on boards in the EU.19 This data suggests that not
only does work still need to be done, but that quotas are the way to do it. I argue that to come to such a conclusion in respect of the Directive, is to overlook the challenges and flaws in the Directive.
The imposition of a quota in Member States that adopted one voluntarily would be administratively burdensome
and unnecessary in at least some cases (some quotas operate better than others). For the countries that have
quotas in place, the sensible option may be to opt out of the application of the Directive altogether. To do this, a Member State must be able to demonstrate that, by December 2022 at least 30% non-executive or 25% of all
director roles in listed companies were filled by the underrepresented sex, and there were provisions in the national
law to effectively mandate for these levels and the publication of the board representation data.20 Provided these
conditions are met, the procedural requirements relating to director appointment and reporting obligations are
also suspended.21 In effect the more onerous targets of 40% and 33% respectively, will be reduced to 30% and 25%.22 Germany, who blockaded the passing of the Directive for over a decade, have opted out of the Directives
provisions on the basis of the mandatory quota that had recently been imposed.23 Lowering the quota to 30% and
25% for those countries that are already doing better than most other member states is tricky to justify.24 To some
it may appear unfair and a widespread view of this nature would be detrimental to the operation of the Directive. It is hoped that the Directive will bring about consistency. Prior to its implementation some Member States had quotas, some had soft law and some had very little in place to address boardroom diversity. Within these categories there is even further variation. The Directive provides welcome clarity over which companies are subject
to the quota i.e. listed companies. This will simplify matters for a number of jurisdictions whose quotas were applicable subject to factors that were much harder to monitor, such as company size and number of employees.25
On the other hand, it also means that some companies will fall outside of the scope of the quota. Large private companies to whom the directive could usefully apply, will be outside of the Directive’s remit. Is consistency achievable? Ultimately, it is unrealistic to expect all Member States to achieve the minimum 40% women on boards by the 2026 deadline. There will be cultural and contextual reasons why some Member States are considerably further
away from the quota than others. The imposition of a quota will not resolve this. The rigour with which a Member
State adheres to the spirit of the Directive is likely to be weakened where they do not support the idea of a 19. ibid 3.
20. Directive (EU 2022/2381) Article 12(1). 21. Directive (EU 2022/2381) Article 7(4). 22. Directive (EU 2022/2381)
Article 12(1). 23. ‘Lisa Paus: “Ein Meilenstein Für Die Gleichstellung in Europa”’ (BMFSFJ, 25 November 2022) 24. European Women on Boards (n 16). 25. Mensi‐Klarbach and Seierstad (n 12). www.eulawlive.com
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quota and/or quotas are misaligned with institutional context. Research suggests that ‘in unfavourable/neutral institutional contexts, soft corporate board quotas do not necessarily result in meeting their goals’.26
Part of the challenge when imposing a quota across multiple jurisdictions is the divergence in corporate governance laws, norms and practices.27 One example of potential divergence in the quota’s impact are jurisdictions where non-
executive directors are nominated by the employees. The quota will apply regardless, and it is for Member States to work out how to achieve it within the context of their national regulations.28 This does not effectively address the
contradictions. The interaction with company law in different Member States raises other issues. Birkmose notes that, because the Directive cannot force shareholders to vote on directors in a gender balanced way, the impact of the directive relates to the nomination of directors, as opposed to their appointment by shareholders. 29 Again
the Directive lacks sufficient clarity on this point. It is partly for these reasons that the European Company Law
Experts Group suggest that what the Directive should have done was impose a quota but leave it to each member state to work out how best to achieve it in their own jurisdictions.30 Opportunities missed? On top of the challenges in its application, there are at least two respects in which the Directive does not go as
far as perhaps it should. Firstly, in relation to the executive directors and secondly in relation to other aspects of diversity. In 2012 the European Women’s Lobby highlighted the dichotomy created by focusing on non-executives in that ‘one half of the boards meet demands for gender balance and the other half run the company’.31 In many
respects this prediction seems to have come to pass. For as long as the full-time managerial board positions remain dominated by white males, many of the hoped-for benefits to improved decision making and social justice
concerns will be superficial. The Directive does very little to address this other than to reduce the quota to 33%
where the proportion of the board under consideration includes the executive directors.32 The optionality that is
introduced by having two possible quotas in place, removes any pressure to address the diversity of the executive. Companies that do focus on the 40% quota for non-executives only must then set quantitative objectives as to
how diversity among the executive will be achieved. But there are no specifics about what this might look like or
how it is to be enforced. The combined effect is a weak impetus for change to the diversity of corporate power. A better approach would have been that now adopted in France, whereby fulfilment of the quota must include the
26. Directive (EU 2022/2381)
624.
27. See for example Klaus Hopt, ‘Comparative Corporate Governance: The State of the Art and International Regulation’
(2011) 59 American Journal of Comparative Law 1. 28. Directive (EU 2022/2381) recital 33. 29. Hanne S Birkmose, ‘Improving the Gender Balance Among Directors of Listed Companies in the EU’ (2023) 20 European Company and Financial Law Review 166. 30. European Company Law Experts Group, ‘Gender Balance Broom Wagon – The Resurrection of the Commission Proposal
on Improving the Gender Balance among Board Members | ECGI. 31. European Womens Lobby, ‘Women on Boards in Europe from a Snail’s Pace to a Giant Leap?’ (2012) 16. 32. Directive (EU 2022/2381) Article 5 (2).
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executives.33 This new French quota sets 30% as the goal across executives and non-executives for March 2026 and
40% by March 2029. By explicitly including executives, in a way which cannot be opted out from, the importance of gender diversity in positions of power is strongly reinforced.
From a broader diversity perspective, it is perhaps surprising that, at a time when discussions on diversity are broader and more inclusive than ever before, the Directive continues to focus solely on gender. Admittedly, to
impose a quota that focuses on more than gender is difficult to construct effectively, especially if you also want to incorporate the executives. It raises some exceptionally hard questions such as; what is the appropriate level of
detail in respect of which protected characteristics benefit from a quota? Quotas could end up doing considerably
more harm than good by virtue of what is left out. Unless quotas can accommodate broader understandings of diversity then I suggest we should not have them at all. There are other alternatives. In the UK, the corporate governance code expects diversity of ‘gender, social and ethnic background, cognitive skills and personal strengths
to be promotes’.34 This approach has its own flaws but at least moves towards a more current understanding of what diversity means. Gatekeepers to the stock exchange can also play a role, as Nasdaq do. For entry into the
New York Stock Exchange, companies with boards of more than five members must have at least one female
director and one director who is an underrepresented minority or LGBTQ+, or explain why they do not. This method has led to a 1556% increase in companies in Nasdaq that have an LGBQ+ policy.35 How that translates
to board members is another question. Conclusion
Quotas have become commonplace in the EU, and the Directive seeks to make them more so, with the admirable
aim of achieving consistently high levels of board gender diversity across the EU. But the debate has moved on
and our sights should be set higher, both in terms of the inclusion of executives and the meaning of diversity. In this way the Directive focuses on the wrong problem.
Unfortunately, even with the sights set largely on gender in the non-executives, the rigidity with which the
Directive applies to countries that have much further to come in relation to diversity, and its interaction with national laws and norms, places the Directives potential effectiveness in doubt. Ultimately, the quota is probably the wrong tool in this context.
33. ‘LOI N° 2021-1774 Du 24 Décembre 2021 Visant à Accélérer l’égalité Économique et Professionnelle (1) - Légifrance’
Article 14.
34. UK Corporate Governance Code, Principle J.
35. OutLeadership, ‘LGBTQ+ Board Diversity: Progress and Possibilities’ (2023).
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HIGHLIGHTS OF THE WEEK
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Action for annulment concerning Commission Decision imposing fines for breach of the EU Merger Regulation, brought before the General Court Monday 6 November
Official publication was made of a case concerning an action for annulment, where the applicant, Illumina, has claimed, primarily, that the General Court should annul the Commission’s Decision C(2023) 4263 final of 12 July 2023 imposing
fines, under the EU Merger Regulation (EUMR), due to the implementation of a merger before the Commission’s approval: Illumina v Commission (T-591/23). Read on EU Law Live
Emilio De Capitani challenges Council’s document access denial Monday 6 November
Official publication was made of an action for annulment brought by Emilio De Capitani against the Council of the European Union, whereby he has sought to challenge the Council’s refusal to provide access to certain documents requested under Regulation 1049/2001: De Capitani v Council (Case T-590/23). Read on EU Law Live
New Presidents elected for Court of Justice Chambers of three Judges Monday 6 November
On September 19, 2023, the judges of the Court of Justice held an election, which resulted in the appointment of several judges as Presidents of the various Chambers. Read on EU Law Live
Preliminary reference on reimbursement mechanism of tariffs provided to incentivize the production of electricity from renewable sources, published in OJ Monday 6 November
A request for a preliminary ruling from the Consiglio di Stato (Italy), lodged on 8 August 2023, concerning the interpretation
of the principles set out in Article 3 of Directive 2009/28/EC on the promotion of the use of energy from renewable sources and Article 4 of Directive 2018/2001 on the promotion of the use of energy from renewable sources, was officially published in the OJ: Tiberis Holding (C-514/23). Read on EU Law Live
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Preliminary ruling request on the interpretation of Article 102 TFEU, in the context of antitrust procedures conducted by the Italian Competition Authority, published in OJ Monday 6 November
A case concerning a preliminary ruling request from The Regional Administrative Court of Lazio (Italy), lodged on 8 August 2023, concerning the interpretation of Article 102 TFEU, in the context of antitrust procedures conducted by the Italian National Competition Authority, was officially published in the OJ: Caronte & Tourist (C-511/23). Read on EU Law Live
Commission requests information from AliExpress on DSA Compliance Monday 6 November
The European Commission formally issued a request for information to AliExpress under the Digital Services Act, aiming to gather details about AliExpress’s efforts to adhere to obligations related to risk assessments and measures to protect online consumers, especially in preventing the dissemination of illegal products, such as counterfeit medications. Read on EU Law Live
Court of Justice to clarify the concepts of ‘belonging’ and ‘control’ of assets held in a trust, with reference to the figure of the settlor of the trust Tuesday 7 November
Official publication was made of a preliminary ruling request concerning the interpretation of Article 2(1) of Regulation
(EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine, as amended by Regulation (EU) No 476/2014; in particular, interpretation of the concepts of ‘belonging’ and ‘control’ of assets held in a trust, with reference to the figure of the settlor of the trust: T Trust (C-483/23).
Read on EU Law Live
EU co-legislators agree on new regulation for transparent and targeted political advertising Tuesday 7 November
The Council presidency and European Parliament negotiators reached a provisional agreement on a new regulation focusing
on the transparency and targeting of political advertising, in response to concerns about information manipulation and foreign interference in elections. Read on EU Law Live
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Preliminary ruling on the interpretation of rules concerning the Community postal services, published in OJ Tuesday 7 November
Official publication was made of a preliminary ruling request from the Varhoven administrativen sad (Bulgaria), lodged on 25
July 2023, concerning the interpretation of Article 22(3) of Directive 97/67 as amended by Directive 2008/6 regarding the
full accomplishment of the internal market of Community postal services, and of Article 47 of the Charter of Fundamental Rights: Star Post (C-476/23). Read on EU Law Live
Preliminary reference on the interpretation of the notion of ‘beneficiary’ of State aid, in the context of European Structural and Investment Funds, published in the OJ Tuesday 7 November
A preliminary ruling request concerning the interpretation of the category of a ‘beneficiary’ of aid, in the context of State
aid, within the meaning of Article 2(10) of Regulation 1303/2013 was officially published in the OJ: Obshtina Veliko Tarnovo (C-471/23).
Read on EU Law Live
New proposal on combining transport modes for more sustainable freight adopted by the Commission Tuesday 7 November
The European Commission unveiled a new proposal aimed at enhancing the sustainability of freight transport through
combined transport methods, which seeks to bolster the competitiveness of intermodal freight, which involves the transportation of goods using multiple modes of transport, in comparison to road-only transportation. Read on EU Law Live
Commission seeks Member States’ input on adjusting State Aid Temporary Crisis and Transition Framework Tuesday 7 November
In response to Russia’s aggression against Ukraine and the energy price surge, the European Commission is consulting Member States on a proposed adjustment to the State Aid Temporary Crisis and Transition Framework. Read on EU Law Live
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Court of Justice streaming hearing today of case concerning the interpretation of Directive 2010/75/EU on industrial emissions Tuesday 7 November
This morning’s Court of Justice’s hearing in Ilva and Others (C-626/22), a case concerning a preliminary ruling request on the
interpretation of Directive 2010/75/EU on industrial emissions and the principles of precautionary and protection of human health, referred to in Article 191 TFEU and Article 174 of the EC Treaty, was streamed on the Court of Justice’s website. Read on EU Law Live
Notice of expiry review of anti-dumping measures applicable to imports of lever arch mechanisms originating from China, published in OJ Wednesday 8 November
Official publication was made of a Notice of initiation of an expiry review of the anti-dumping measures applicable to imports of lever arch mechanisms originating in the People’s Republic of China. Read on EU Law Live
Council and Parliament reach provisional agreement to boost instant payments and foster financial autonomy Wednesday 8 November
The Council and the European Parliament reached a provisional political agreement on an instant payments proposal aimed
at enhancing the accessibility of instant payment options in the euro currency for consumers and businesses across the EU and the European Economic Area (EEA) countries. Read on EU Law Live
Council and Parliament reach provisional agreement to boost instant payments and foster financial autonomy Wednesday 8 November
The Council and the European Parliament reached a provisional political agreement on an instant payments proposal aimed
at enhancing the accessibility of instant payment options in the euro currency for consumers and businesses across the EU and the European Economic Area (EEA) countries. Read on EU Law Live
Annual overview of antisemitic incidents from the EU Agency for Fundamental Rights, published Wednesday 8 November
The EU Agency for Fundamental Rights released its annual overview of antisemitic incidents for 2022, shedding light on the concerning state of antisemitism in Europe, emphasizing the critical need to harness data effectively to combat it. Read on EU Law Live
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General Court rejects arguments of Russian businessperson in case concerning Council sanctions adopted as a response to Russia’s aggression against Ukraine Wednesday 8 November
The First Chamber of the General Court delivered its judgment in Mazepin v Council (T-282/22), a case concerning sanctions adopted by the Council in the context of Russia’s aggression against Ukraine. Read on EU Law Live
General Court upholds restrictive measures in Varabei and Zaytsev Cases Wednesday 8 November
The General Court delivered its judgments in Varabei v Council (T-245/21) and Zaytsev v Council ( Joined cases T-563/21 and T-564/21) concerning restrictive measures adopted against Belarus. Read on EU Law Live
Commission’s 2023 Enlargement Package: key recommendations and progress report Wednesday 8 November
In its latest move toward European integration, the European Commission unveiled the 2023 Enlargement Package, offering an extensive evaluation of the advancements made by several countries on their journeys toward joining the EU. Read on EU Law Live
Commission registers four new European Citizens’ Initiatives Wednesday 8 November
The European Commission decided to register four European Citizens’ Initiatives (ECI), entitled: ‘EU Live Bus Stop Info’, ‘Trust and Freedom’, ‘“I’m Going European”: An ECI to Connect your National and European Citizenship’ and ‘Creation of a European Environment Authority’. Read on EU Law Live
Court of Justice reappoints two judges and an advocate general for 2024-2030 term Wednesday 8 November
The representatives of EU member states reappointed Mr. Constantinos Lycourgos and Mr. Jan Passer as judges to the Court of Justice, while Mr. Giovanni Pitruzzella was reappointed as Advocate-General to the Court of Justice. Read on EU Law Live
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The Week
ISSUE Nº2 6-10 NOVEMBER 2023
Council and Parliament reach provisional agreement on new framework for a European digital identity (eID) Thursday 9 November
The Council and the Parliament reached a provisional agreement on a new framework for a European digital identity (eID), which aims to ensure universal access for people and businesses to secure and trustworthy electronic identification and authentication.
Read on EU Law Live
Catalyzing sustainable food systems amidst urgency and contestation - The role of EU law and governance, ACELG Annual Conference 2023, 17 November 2023 Thursday 9 November
The “ Catalyzing sustainable food systems amidst urgency and contestation - The role of EU law and governance” conference organized by the Amsterdam Centre for European Law and Governance (ACELG), slated for November 17, 2023, will
take on the pressing challenge of revitalizing the EU’s food system, which confronts a complex web of interconnected issues spanning environmental, climate, health, and social dimensions, necessitating a swift systemic overhaul. Read on EU Law Live
Information society services directive precludes national rules which subject communication platforms established in other Member States to general and abstract obligations Thursday 9 November
The Court of Justice handed down its judgment in Google Ireland and Others (C-376/22), a case concerning, in essence, the freedom of establishment. Read on EU Law Live
Court of Justice rules on proportionality of accelerated enforcement of a consumer credit loan in of outof-court enforcement proceedings Thursday 9 November
The Court of Justice delivered its judgment in the case Všeobecná úverová banka (C-598/21), a preliminary reference from the Regional Court of Prešov (Slovakia) on the link between enforcement proceedings, consumer law and fundamental rights as enshrined in the Charter. Read on EU Law Live
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The Week
ISSUE Nº2 6-10 NOVEMBER 2023
AG Pitruzzella: Court of Justice should set aside judgment annulling Commission Decision finding tax rulings granted to Apple by Ireland as constituting State aid Thursday 9 November
AG Pitruzzella delivered his Opinion in Commission v Ireland and Others (C-465/20 P), an appeal concerning primarily the setting aside of the judgment of the General Court in Joined Cases T-778/16 and T-892/16, which upheld the claim to annul the Commission decision on State aid (SA.38373) implemented by Ireland to Apple. Read on EU Law Live
Article 7(1) of Directive 2003/88/EC is applicable in relations between a private transport operator, with a single public service delegation, and its employees: Court of Justice Thursday 9 November
The First Chamber of the Court of Justice rendered its judgment in Keolis Agen ( Joined cases C-271/22; C-272/22; C-273/22; C-274/22; C-275/22), concerning primarily clarification on whether Article 7(1) of Directive 2003/88/ EC regarding certain aspects of the organization of working time is to be interpreted as being directly applicable in relations between a private transport operator, with a single public service delegation, and its employees, in the light, in particular, of the liberalization of the rail passenger transport sector. Read on EU Law Live
Court of Justice dismisses appeal in Chemours Netherlands v. ECHA Thursday 9 November
The Court of Justice delivered its judgment in Chemours Netherlands v. ECHA (C-293/22 P), following the General Court’s judgment in Chemours Netherlands v. ECHA, concerning the interpretation of Regulation 1907/2006 concerning the Registration, Authorisation and Restriction of Chemicals (REACH). Read on EU Law Live
Court of Justice rules on the refusal to enforce a foreign judgment when in the executing court’s view the judicial system of the other MS is not in conformity with the principle of the rule of law Thursday 9 November
The Fourth Chamber of the Court of Justice rendered its judgment in Staatsanwaltschaft Aachen (C-819/21), a case concerning a preliminary ruling request on whether a court of the executing Member State of an EAW, which has been called on to rule on a declaration of enforceability, can refuse to recognize and enforce the judgment of another Member State, where there are reasons to believe that the conditions prevailing in that Member State are incompatible with the fundamental right to a fair trial. Read on EU Law Live
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The Week
ISSUE Nº2 6-10 NOVEMBER 2023
Ruling by Supreme Court in Micula case puts UK in breach of Union law, argues AG Emiliou Thursday 9 November
Advocate General Emiliou delivered his Opinion in Commission v. United Kingdom (C-516/22), where he held that the UK violated its obligations under Articles 4(3) TEU and Article 267 TFEU, both read in conjunction with Article 127(1) of the Withdrawal Agreement. Read on EU Law Live
Judgment dismissing the annulment of a provision of Commission Decision imposing fines for breach of the Merger Regulation must be set partially aside, holds the Court of Justice Thursday 9 November
The Court of Justice delivered its judgment in Altice Group Lux v Commission (C-746/21 P), a case on appeal, whereby the appellant primarily sought to have set aside the judgment of the General Court in case T‑425/18 by which the Court set the amount of the fine imposed on that company by Commission Decision C(2018) 2418 imposing a fine for putting into effect a concentration in breach of Article 4(1) and Article 7(1) of the Merger Regulation. Read on EU Law Live
Advocate General Ćapeta: Court of Justice should set aside the GC’s judgment in Fundación Tatiana Pérez de Guzmán el Bueno and SFL v. SRB Thursday 9 November
Advocate General Ćapeta delivered her Opinion in Commission v. Single Resolution Board (C-551/22 P), the latest case in the longstanding ‘Banco Popular’ saga. Read on EU Law Live
Commission sends requests for information to TikTok and YouTube under the Digital Services Act Thursday 9 November
The European Commission sent requests for information under the Digital Services Act (‘DSA’) to TikTok and YouTube, requesting the companies to provide more information on the measures they have taken to comply with their obligations related to protection of minors under the DSA. Read on EU Law Live
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The Week
ISSUE Nº2 6-10 NOVEMBER 2023
AG Medina proposes to uphold judgments of the General Court dismissing actions for annulment concerning Germany’s State aid scheme for baseload consumers Thursday 9 November
AG Medina delivered her Opinions concerning a number of joint cases on appeal seeking the setting aside of judgments of the General Court, by which actions seeking the annulment of the European Commission’s State aid Decision of 28 May 2018 on the aid scheme implemented by Germany for baseload consumers were dismissed. Read on EU Law Live
Court of Justice dismisses appeals concerning judgments on actions for annulment raised against the inclusion of certain chemical products in the Annex to the REACH Regulation Thursday 9 November
The Fourth Chamber of the Court of Justice delivered its judgments in Global Silicones Council and Others v Commission and Others (C-558/21 P) and Global Silicones Council and Others v ECHA and Others (C-559/21 P), cases on appeal, where the appellant sought the setting aside of the General Court’s judgments, by which it dismissed actions seeking the annulment of the REACH Regulation and the Decision of the European Chemicals Agency concerning the inclusion of certain chemicals in the Candidate List for eventual inclusion in Annex XIV to that Regulation. Read on EU Law Live
ECtHR: Violation of Article 6 § 1 of the ECHR and a violation of Article 1 of Protocol No. 1 in Legros and Others v. France Friday 10 November
The ECtHR delivered its judgment in the case of Legros and Others v. France (applications nos. 72173/17 and 17 others), in which it unanimously held, that there had been: a violation of Article 6 § 1 (right of access to a court) of the ECHR, and a violation of Article 1 of Protocol No. 1 (protection of property) in the case of Mr Legros (application no. 72173/17). Read on EU Law Live
Council and Parliament reach agreement on Regulation to restore and preserve Union habitats Friday 10 November
The Council presidency and the European Parliament reached a provisional political agreement on a Regulation on nature restoration, which aims to put measures in place to restore at least 20% of the EU’s land and sea areas by 2030, and all ecosystems in need of restoration by 2050. Read on EU Law Live
www.eulawlive.com
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The Week
ISSUE Nº2 6-10 NOVEMBER 2023
UK Information Commissioner’s Office and EDPS sign Memorandum of Understanding Friday 10 November
The European Data Protection Supervisor (EDPS) and the UK Information Commissioner’s Office (ICO) signed a Memorandum of Understanding (MoU), concerning their common mission to uphold data protection and privacy rights of individuals, and cooperate internationally to achieve this goal. Read on EU Law Live
Council extends for one year its sanctions regime regarding Türkiye’s unauthorized drilling in the Eastern Mediterranean Friday 10 November
The Council renewed, for an additional year, its restrictive measures adopted in relation to Türkiye’s unauthorized drilling activities in the Eastern Mediterranean in 2019. Read on EU Law Live
ESMA elevates cyber risk to strategic supervisory priority alongside ESG disclosures Friday 10 November
The European Securities and Markets Authority (ESMA) announced a shift in its Union Strategic Supervisory Priorities (USSPs), introducing cyber risk and digital resilience as key areas of focus alongside environmental, social, and governance (ESG) disclosures. Read on EU Law Live
www.eulawlive.com
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