The Week Nº26

IN-DEPTH:

On encrypted messages and clear verdicts – the EncroChat case before the Court of Justice (Case C-670/22, MN)

Lorenzo Bernardini

Discharge of the Claims Deriving from Public Law in European Union Insolvency Law

Remigijus Jokubauskas

The Power to Define: Privacy Rights, Criminal Investigations and the Concept of ‘Serious Crime’ (Case C-178/22

Procura della Republica presso il Tribunale di Bolzano)

Francesca Palmiotto

No Good Hiding Behind Others: Court of Justice strengthens Precautionary Fact-finding Duties under Pesticide Regulation (Case C-308/22, PAN Europe and Joined Cases C-309/22 and 310/22, PAN Europe)

Luca Knuth

National Security Derogations from Derived Residence Rights under Article 20 TFEU –Joined Cases C420/22 and C528/22 (information classifiées)

Stefan Salomon

C-222/23, Toplofikatsia Sofia: the First Judgment of the Court of Justice Addressing the 2020 Service Regulation

Carlos Santaló Goris

SYMPOSIUM ON CLIMATE PROTECTION AS A EUROPEAN FUNDAMENTAL RIGHT UNDER THE ECHR AND BEYOND

No Nature, no Human Rights: Implications of KlimaSeniorinnen for Biodiversity

Niels Hoek and Justine Muller

Climate Justice in the Jurisprudence of the European Court of Human Rights. Some notes on Carême v. France, Verein KlimaSeniorinnen v. Switzerland, Duarte Agostinho & al. v. Portugal & 32 Others

Marta Torre-Schaub

COMPETITION CORNER: SYMPOSIUM ON COMPETITION LAW AND REGULATION

REMIT II: new investigatory powers for the EU agency in Ljubljana to strengthen the fight against market abuse in the European energy markets

Giuliana D’Andrea

THE LONG READ:

Integrated Decision-making in The EU and Judicial Review – Can The Puzzle be Fixed?

Daniel Sarmiento

HIGHLIGHTS OF THE WEEK

IN-DEPT H

On encrypted messages and clear verdicts – the EncroChat case before the Court of Justice (Case C-670/22, MN)

Lorenzo Bernardini

Introduction

The long-awaited and seminal judgment MN, rendered on 30 April by the Grand Chamber of the Court of Justice, addresses the transfer via European Investigation Orders (EIOs) of evidence collected from the EncroChat network, described as ‘a secure messaging service and service provider used by organized crime to secure drug deals, trade weapons and plan killings’ ( The World Today, June & July 2021, p. 7). Specifically, the case dealt with the compatibility of such a transfer, from France to Germany, with several provisions of the Directive 2014/41 (‘EIO Directive’). Among the numerous issues addressed in MN, this Op-Ed zooms in on the admissibility of evidence obtained in breach of EU law.

Factual and legal background of the case

The case regards a French criminal investigation that extended into a joint operation with the Netherlands to monitor encrypted data transmitted through the EncroChat network. In 2020, Trojan software was installed on users’ devices via a simulated update from a French server, authorized by the Criminal Court of Lille (France).

Subsequently, German prosecutors sought authorisation by means of EIOs to use the EncroChat data in German proceedings, which was granted by the French court. On the basis of this evidence, MN, the defendant in the present case, was charged with drug offenses. Against this background, the Berlin Regional Court (‘the referring court’), casting doubts on the EIOs’ lawfulness under the EIO Directive, stayed the criminal proceedings against MN and posed five detailed questions to the Court of Justice

In essence, the referring court was uncertain: (i) whether or not an EIO for evidence transfer shall be always issued by a judge; (ii) whether the EIO Directive allows data transmission from broad telecommunications interceptions without specific evidence of serious crimes or verified data integrity; (iii) whether the EIO Directive prevents evidence transmission if the gathering method would be unlawful in the issuing State; (iv) whether certain surveillance practices fall under ‘interception of telecommunications’ in the EIO Directive and require judicial notification (Article 31 EIO Directive); (v) whether evidence obtained via an EIO that contravenes EU law can be excluded from criminal proceedings, considering principles of effectiveness and equivalence.

The Advocate General’s Opinion

In her thorough analysis, AG Ćapeta first highlighted that the present reference does not concern the validity of French interception measures, which were conducted independently from the German EIOs. Instead, the EIOs in

question were issued to acquire evidence already in possession of French authorities (Article 1(1) EIO Directive). The focus of the case thus lied on the potential clash between the EIOs issued by the German prosecutors and the EIO Directive, and the repercussions of such a breach (Opinion, paras. 14-22).

In sum, the AG clarified the concept of ‘competent issuing authority’ for evidence transfer in light of Article 6(1) (a) and (b) EIO Directive [question (i)]. Notably, she found that public prosecutors can issue EIOs, but only if they are competent in domestic cases for similar evidence transfers, as is the case in Germany (Opinion, points 38-48; cfr. points 87-103 and para. 59-75 for further considerations). In doing so, they cannot question the lawfulness of the underlying measures through which the evidence was gathered, in line with the principle of mutual recognition (Opinion, points 49-55 – also answering to question [iii]).

Moving to the necessity and proportionality assessment under Article 6(1)(a) EIO Directive [question (ii)], the AG adopted a nuanced viewpoint. She asserted that this evaluation, including, for instance, the existence of a suspicion of a serious offense, falls within the competence of national authorities and not the Court. Still, she emphasised that the assessment ‘must’ consider the significant intrusion into privacy posed by access to intercepted communications and balance this with a substantial public interest in crime investigation and prosecution (Opinion, points 76-86).

Regarding question (iv), the AG provided a concise response affirming that Article 31 EIO Directive applies to situations where interception measures are conducted unilaterally by one Member State. Therefore, French authorities should have notified their German counterparts. However, she clarified that the intercepting authority is not required to notify a judge in the notified State but can inform any suitable authority, including a public prosecutor (Opinion, points 104-115).

In addressing the final question (v), AG Ćapeta straightforwardly concluded that EU law does not govern the admissibility of evidence obtained through an EIO issued in violation of the EIO Directive. Accordingly, the admissibility of evidence remains a matter of national law only, albeit subject to the safeguards outlined in Articles 47 and 48 of the Charter, which protect fair trial rights and right of the defence (Opinion, points 116-131).

The Court’s judgement

The Court’s ruling largely aligns with the AG’s Opinion, though there are notable departures in its reasoning that warrant closer examination.

Firstly, the Court echoed the AG’s viewpoint in answering question (i) – where a public prosecutor has the authority to order the transmission of evidence in a domestic case, they possess the same authority in EIO proceedings (paras. 69-77).

Secondly, the Court addressed questions (ii) and (iii) together, noting that the necessity and proportionality test of an EIO hinges on national law. Also, the Court clarified that Article 6(1)(b) EIO Directive does not stipulate that the measures undertaken in the executing State need to meet the same substantive conditions as a similar

measure in the issuing State. Therefore, the issuing authority cannot challenge the lawfulness of the underlying measure, in line with the principle of mutual recognition. However, legal remedies against the EIO at stake shall be available (Article 14 EIO Directive). In this regard, the Court clearly stated that if a national court considers that a party was not in the position to comment effectively on a relevant piece of evidence transferred by way of an EIO, that court ‘must find an infringement of the right a fair trial and exclude that evidence in order to avoid such an infringement’ (paras. 78-106, emphasis added).

Thirdly, for what concerns the notification process [question (iv)], the Court agreed with the conclusions drawn by the AG, albeit with slightly broader reasoning (paras. 107-125).

Finally, in answering question (v), the Court deviated somewhat from the AG’s conclusions. While it recognised that, in principle, the admissibility of evidence in criminal proceedings falls under domestic law, it highlighted that Article 14(7) EIO Directive mandates that Member States safeguard fair trial rights in EIO-related procedures. Echoing its judgments in Prokuratuur (C-746/18) and La Quadrature du Net and Others (C-511/18, C-512/18 and C-520/18), the Court reiterated that if a domestic court determines a party was unable to effectively comment on a crucial piece of evidence obtained via an EIO, it must recognize a violation of the right to a fair trial and exclude that evidence to prevent such a breach (paras. 126-131).

A judgement that does not emerge out of the blue

Even from a brief reading, MN stands out as a potential landmark judgment in the area of judicial cooperation in criminal matters for various reasons. The Court not only provided essential clarifications on many aspects of the EIO Directive that were sorely needed but also demonstrated a mature approach regarding fair trial and defence rights in cross-border criminal proceedings. In this context, I would define MN as an important attempt to maintain a balance between, on one hand, the efficiency of judicial cooperation tools, and on the other hand, the respect for fundamental rights (fair trial and defence rights) in cross-border procedures.

This does not come as a surprise, though. Indeed, as supreme courts in several Member States – including the Netherlands, Italy (here and here), Germany and France (here and here) – have already issued rulings on different facets of the case, it is likely that the Court of Justice had the opportunity to consider these decisions before making its own. Notably, even though the aforementioned national courts opted not to submit preliminary references to the Court of Justice, it is intriguing to observe that – except from French decisions – the conclusions of these judgments frequently pinpoint the principle of mutual trust and the respect for fair trial and defence rights in their reasoning. This would suggest that the cross-fertilisation between the Court of Justice and domestic courts in this field is an ongoing process, that – fostering a fruitful dialogue among judges – proves to be beneficial for both actors.

On the flip side, this also indicates that MN did not come about in a vacuum. Rather, it seemingly drew upon the extensive doctrinal (inter alia, Oerlemans & van Toor; Daniele; Sagittae; Nicolicchia; Griffiths & Jackson; Stoykova) and judicial groundwork laid by national scholars and jurisdictions in recent years. In an area particularly

sensitive to fundamental rights, such a backdrop is rare and likely influenced the outcome of the judgment. In what might be seen as a ‘butterfly effect’, the fact that several supreme courts refrained from submitting preliminary references to the Court of Justice in the context of domestic EncroChat-related cases may have inadvertently aided the Court more than expected. From this perspective alone, MN is arguably not a revolutionary judgment but rather a judicious reworking of established – and authoritative – domestic case law and academic reflections.

A brand-new, EU-shaped, exclusionary rule?

The truly ground-breaking aspect of MN, in my view, lies in the stance taken by the Court of Justice regarding the topic of admissibility of evidence, which is deeply entrenched within domestic legal frameworks, with Member States being highly protective of their prerogatives in this area (cfr. Allegrezza & Mosna; Bachmaier; ClaverieRusset; Fair Trials). However, MN marks a novel – and to some extent unprecedented – approach to this issue in the area of judicial cooperation in criminal matters. While the AG maintained that the issue falls under national law and did not address the ‘destiny’ of cross-border evidence collected in violation of EU law, the Court adopted a bolder stance. The latter hinges on the right to a fair trial as enshrined in Article 47 of the Charter, which must be respected by Member States when evaluating evidence obtained through an EIO (Article 14(7) EIO Directive).

The Court structured its reasoning in three clear steps to articulate this stance: (i) a trial is fair if the defendant can ‘comment effectively’ on evidence against them, especially when such evidence is likely to significantly influence the factual findings; (ii) if the defendant is unable to effectively comment on such crucial evidence, there is a breach of the right to a fair trial; (iii) as a direct consequence of such a breach, the evidence in question ‘must’ be ‘excluded’ to prevent an infringement of the right to a fair trial (paras. 106 and 130).

In essence, the third step articulates specific procedural consequences following a violation of fair trial rights, setting a clear, precise, and straightforward rule. This approach not only enhance the functioning of mutual recognition mechanisms, making them more efficient, but also address the inconsistencies and case-specific rulings found in the European Court of Human Rights (‘ECtHR’) case-law on evidence admissibility which – not coincidentally – is not even referred to in the body of the judgment. While decisions like Budak or Yüksel Yalçinkaya hint at similar directions, the rule in MN is more explicit, particularly clarifying the consequences of violating the right to a fair trial – specifically, that such evidence, in any case, must be ‘excluded from the criminal proceedings’ (yet, the Court of Justice stops short of requiring Member States to label such evidence as ‘inadmissible’ – although the practical consequences seem the same, this linguistic restraint might illustrate the cautious approach of the Luxembourg Court in this sensitive area). All in all, the absence of reference to the ECtHR’s case-law should be viewed as a reaffirmation of the EU’s autonomy in this field (cfr. the insightful comment of Groussot & Engel on La Quadrature du Net and Others [C-470/21]).

As I also argued in another Op-Ed, I believe that the Court of Justice’s ‘emancipation’ from the ECtHR’s minimalistic approach in the field of fair trial/defence rights shall be welcomed. Specifically, I deem this approach significant for at least two reasons. Firstly, it bolsters procedural rights and ensures the upholding of fair trial

rights more robustly than the ECtHR’s fragmented approach. Besides, it provides clear, straightforward rules that enhance greater mutual trust among Member States, crucial for the effective operation of mutual recognition mechanisms (cfr. Opinion of AG Ćapeta in BK [C-175/22], points 62-73). After all, the approach developed in MN is a welcome development as it may ensure that evidence compromising fair trial rights, such as potentially the EncroChat-related evidence, is properly scrutinized and excluded if it cannot be contested effectively at any stage of the procedure

However, there seems to be room for further refinements in this area. Why should only violations related to the lack of opportunity to ‘effectively’ comment on the evidence lead to its exclusion from the trial? What about other violations of fair trial or defence rights? Could the adverb ‘effectively’ also cover situations where, for instance, the defendant did not receive legal assistance and thus was unable to ‘effectively’ contest the evidence? Does the same hold true where the right to interpretation and translation has been breached?

Gathering inadmissible evidence through the ‘abuse’ of cross-border procedures – abuse of what, exactly?

Another issue linked to the admissibility of evidence concerns one of the arguments presented by the defendant before the Court. According to MN, ‘the German authorities turned to their French counterparts to obtain evidence contrary to German law’ (Opinion, point 49). The AG argued that there were no grounds to claim an ‘abuse’ of cross-border procedures, as the French authorities independently gathered the evidence in question with no involvement on the part of German ones. Thus, no ‘circumvention of protection of suspects and accused persons’ occurred (Opinion, point 49-50). The Court echoed this wording, stating that it is for the referring court to determine whether the gathering and transmission of evidence had the ‘aim’ or ‘effect’ of such ‘circumvention’, albeit suggesting that the latter did not occurred (para. 98).

Identifying a situation of ‘abuse’ of cross-border procedures might be challenging, given that all evidence within the scope of the EIO Directive can potentially be gathered and/or transferred to issuing States, according to the relevant provisions contained therein. All Member States are fully aware of this situation, and the evidence collected in the EncroChat-related joint investigation makes no exception. Arguably, the Court is referring to cases where the issuing State deliberately asks – via informal means – the executing State to collect evidence that is prohibited by the issuing State’s procedural law, and then requests the transfer of such evidence through an EIO, thus bypassing domestic rules. Still, to prevent the circulation of inadmissible evidence, some best practices have been implemented domestically. For instance, Dutch prosecutors typically request a judicial warrant to select a subset of the (already received) EncroChat data that can be used domestically, referred to as an ‘extra-warrant’, foreseeing an additional oversight over such evidence (Oerlemans & van Toor).

All in all, it seems to me that several questions remain unanswered – why is the Court timidly engaging in this issue? Is evidence gathered in the context of an ‘abuse’ of cross-border procedures to be considered contrary to EU law? Is the Court suggesting that if a ‘circumvention’ of domestic law or ‘abuse’ of cross-border procedures is found, such evidence should be excluded from the proceedings?

The interplays with the Data Retention Saga and the way forward

Finally, a standout aspect of the judgment related, again, on evidence admissibility deserves attention. As already said, the Court’s viewpoint that evidence, which the defendant cannot effectively comment on, should be excluded from criminal procedures to avoid violating fair trial rights is particularly noteworthy. To reach this conclusion, the Court took a progressive and innovative stance. It referenced relevant case-law related to the Directive 2002/58 (‘ePrivacy Directive’) such as Prokuratuur (C-746/18 – see, for a valuable comment, Panzavolta & Maes), which, importantly, does not apply to the case at hand.

Essentially, the ePrivacy Directive – aimed at protecting the privacy of individuals whose data is collected by Internet Service Providers (ISPs) – does not apply when national authorities gather data directly from electronic devices without involving ISPs. This was the scenario in the EncroChat case, where French-Dutch authorities directly collected data from smartphones using malware virus. The relevant case-law on the ePrivacy Directive, famously known as the ‘Data Retention Saga’ – and that includes La Quadrature du Net and Others (C-470/21), rendered on the same day as MN (cfr. Groussot & Engel) – is inapplicable to the present case (Opinion, paras. 87-103). Indeed, the Court did not mention this Directive in its reasoning.

However, the importance of the ‘Data Retention Saga’ re-emerges regarding the rules applicable to admissibility of evidence.

In other words, the Court adapted the approach from Prokuratuur (C-746/18) and applied it to evidence transfer in the context of EIO procedures, where the ePrivacy Directive does not formally apply. The Court effectively introduced a tailor-made evidence admissibility test for evidence transfer in EIO proceedings. While this standpoint will potentially enhance procedural guarantees for defendants across Europe, it is yet to be determined if this approach was driven by the specific aspects of the case – such as the vast amount of intercepted data involving many individuals and the difficulty in challenging its integrity – or if it signals a broader stance on evidence admissibility that will shape the future Court’s case-law.

Lorenzo Bernardini is Postdoctoral Researcher in Criminal Law and Criminal Procedure at the Faculty of Law, Economics and Finance of the University of Luxembourg; Email: lorenzo.bernardini@uni.lu.

SUGGESTED CITATION: Bernardini, L.; “On encrypted messages and clear verdicts – the EncroChat case before the Court of Justice (Case C-670/22, MN)”, EU Law Live, 21/05/2024, https://eulawlive.com/op-ed-on-encrypted-messages-and-clear-verdicts-the-encrochat-case-before-the-court-ofjustice-case-c-670-22-mn-by-lorenzo-bernardini/

Discharge of the Claims Deriving from Public Law in European Union Insolvency Law

Remigijus Jokubauskas

On 8 May 2024 the Court of Justice of the European Union (hereinafter – Court of Justice) rendered another judgment related to the interpretation of the non-dischargeable debt in the European Union (hereinafter – EU) insolvency law in case C-20/23, Simonsen & Weel (hereinafter – ‘ the judgment’). The judgment continues the interpretation of the Directive on restructuring and insolvency ((EU) 2019/1023) (hereinafter – ‘ the Directive’) in another recent judgment of the Court of Justice in case C-687/22 which also addressed the questions of discharge of debts in the discharge procedure (for a previous analysis, see here).

The Directive is silent on whether or not a debtor should be discharged from the claims deriving from public law, such as tax claims. Article 23(4) of the Directive establishes that Member States may exclude specific categories of debt from discharge of debt but does not mention tax claims in such list. However, the Directive aims for a full discharge of debt and a second chance for insolvent entrepreneurs which should be interpreted as the leading aims of this procedure.

The crux matter in case C-20/23 was whether the Member State have the right to exclude debts deriving from public law (namely tax and social security debts) from the list of dischargeable debts under Article 23(4) of the Directive. In other words, shall a debtor continue paying such debt after the discharge procedure or not? To address this issue, the Court of Justice dealt with two questions. First, do the Member States have a right to exclude a specific category of debt other than those listed in Article 23(4) of the Directive? And second: do the Member States have a right to exclude debts deriving from tax claims as dischargeable debts from discharge?

Turning to the first question, the Court of Justice found that an exclusion of a specific category of debt other than those listed in Article 23(4) of the Directive from the discharge is possible only if it is duly justified under national law (para. 39). This finding was based on the interpretation of the said provision in case C-687/22, where the Court of Justice decided that the Member States have a right to choose over the debts which fall in the list of non-dischargeable debts.

Regarding the second and the main question in the case the Court of Justice found that Member States are free to exclude certain specific categories of debt from the discharge of debts, such as tax and social security debts, and thus confer on them a privileged status, provided that such an exclusion is duly justified under national law (para. 45). The main argument which the Court employed was that ‘Not all debts are of the same nature, creditors do not have the same status and the recovery of those debts may serve specific purposes. Thus, in view of the nature of tax and social security debts and the purpose of collecting tax and social security contributions, Member States may legitimately consider

that public institutional creditors are not in a situation comparable to that of creditors in the commercial or private sector from the point of view of recovering the debts concerned. In those circumstances, the possibility of excluding tax and social security debts from the discharge of debt does not amount to unduly favouring public institutional creditors over other creditors who do not benefit from such an exclusion’ (para. 43).

Thus, in essence, the Court of Justice ruled that though public debt deriving from tax claims are not listed in Article 23(4) of the Directive the Member States have the right to exclude such debt from the list of nondischargeable debt in the discharge procedure.

First, the main argument the Court of Justice employed to justify non-discharge of tax claims is that public creditors (in essence, a State) is different from commercial or private creditors and thus entitles them to demand payment of taxes after the discharge is granted. Moreover, the Court of Justice went even then further by noting that such creditors may enjoy a privileged position.

This reasoning in the judgment is a divergence from the principle of equality of creditors (pari passu) which is one of the fundamental elements of insolvency proceedings. Following pari passu principle, all creditors should be treated equally unless there are clear justification for divergence from this rule. Since a discharge procedure is insolvency proceedings, this principle shall be followed. This should be also the case in application of EU insolvency law. For instance, Recital 63 of the Regulation 2015/848 on insolvency proceedings recognises that tax authorities and social insurance institutions similarly as other foreign creditors have a right to lodge a claim in cross-border insolvency proceedings. The Court of Justice itself has referred to the pari passu principle in the Senior Home case where it found that the rights in rem under the Insolvency Regulation should include property rights created not only in the context of a commercial transaction, but also public law, including tax law (judgment of the Court of Justice in case C-195/15, para. 32). Thus, all creditors should be treated equally in discharge procedure, unless lawful, proportionate reasons justify derogation from the principle of pari passu.

The question arises: why a public creditor should be treated differently in the context of a discharge procedure? Why should the claim deriving from payment of taxes be treated differently than the one deriving, for instance, from a tort, violation of a contract or other violation of law which gives a raise to a debt? It is true that the nature of such claims is different (as the claims of all creditors). However, why public and private creditors should be treated differently and in a privileged position? The derogation from the pari passu principle, considering its fundamental importance, requires at least some explanation which is unfortunately missing in the judgment.

Second, the Directive is based on the idea of a full discharge meaning that the provisions of non-dischargeable debt should be interpreted as exceptions to this aim. A full discharge is also a precondition for a second chance for insolvent entrepreneur after the discharge procedure which is one of the main aims of the discharge procedure reiterated in the preparatory works of the Directive (European Commission Recommendation on a new approach to business failure and insolvency (2014/135/EU)) and in the text of the Directive (Recitals 1, 4, 21, 72, 85 of the Directive). A second chance means that a after discharge of debts a debtor should have a possibility to start a new

and pursue (continue) business activities without the burden of prebankruptcy debts. The effectiveness of a second chance does indeed significantly depend on the fact from which debt a debtor is not discharged. If an insolvent entrepreneur shall continue paying most of prebankruptcy debt, the effectiveness of the discharge procedure is doubtful. However, the judgment does not provide any guidance whether or not non-discharge of tax claims is compatible with the aim of a second chance.

Third, the Directive is designed to address the problems of insolvent entrepreneurs. Although it may also be applicable to consumers (Article 1(4) of the Directive), it primarily deals with insolvent entrepreneurs. The peculiarity of insolvency of entrepreneurs may be that debts deriving from tax claims related to their economic activities could constitute one of the main debts which led to insolvency of a debtor. If the aim of the discharge procedure is to provide a possibility to start economic activities anew, why does a State still demand payment of claims which may likely derive from previous unsuccessful economic activities? The idea behind discharge of debt suggests that honest, but unfortunate entrepreneurs should receive a chance to start a new, instead of struggling to pay prebankruptcy debt.

To sum up, the judgment, even though leaving the discretion for the Member States to choose whether or not an insolvent debtor is discharged from the claims deriving from public law such as tax claims, lacks arguments which would explain why the claim deriving from public law such as tax and social security debt should be treated differently from the claims of other creditors. Also, it remains unclear whether such interpretation of the list of non-dischargeable debts in Article 23(4) of the Directive contributes to the aim of a second chance which plays a pivotal role in the discharge of debt procedure.

Remigijus Jokubauskas is attorney at a law firm and associate professor at Mykolas Romeris University (Lithuania). He teaches national and international insolvency law and is an author of numerous articles and books on insolvency and private international law.

SUGGESTED CITATION: Jokubauskas, R.; “Discharge of the claims deriving from public law in European Union insolvency law”, EU Law Live, 23/05/2024, https://eulawlive.com/op-ed-discharge-of-the-claims-deriving-from-public-law-in-european-union-insolvency-law-by-remigijusjokubauskas/

The Power to Define: Privacy Rights, Criminal Investigations and the Concept of ‘Serious Crime’ (Case C-178/22 Procura della Republica presso il Tribunale di Bolzano)

Francesca Palmiotto

On 30 April 30 2024, the Court of Justice delivered the ruling in Procura della Repubblica presso il Tribunale di Bolzano (C-178/22) on the interpretation of Article 15(1) of the e-Privacy Directive 2002/58. Following up on Prokuratuur (C-764/18), the Court clarified that it is for Member States to define the concept of ‘serious crime’ –which allows derogations from the principle of confidentiality of communications to investigate criminal offences. For this purpose, national law requirements, such as minimum terms of imprisonment as a threshold for ‘serious’ offences, are not incompatible with EU law. However, judicial authorities must be able to verify if the interference with the right to data protection can be justified in light of the seriousness of the offence in the concrete case. By requiring judicial review, the judgment adds a layer of protection for individuals in the delicate relationship between privacy rights and national security interests.

Background

If a smartphone is stolen, location and traffic data in the possession of telephone companies can provide crucial evidence to identify the perpetrator of the theft. At the same time, however, they can also allow precise conclusions about individuals’ private lives – such as their habits, places of residence, daily moments, and social relationships – constituting serious interferences with the rights guaranteed in Articles 7 and 8 of the Charter. Under EU law, traffic and location data confidentiality is protected in the ePrivacy Directive. National law can set derogations, allowing public authorities to access the data to prevent, investigate and prosecute crimes, but only in exceptional circumstances (Article 15(1) Directive 2002/58).

In Prokuratuur (C-764/18, para. 45), the Court clarified that only ‘serious offences’ can justify interferences with the right to privacy, allowing public authorities to access telephone records (judgment commented in EU Law Live here). In this context, the Court left a question in Prokuratuur: who defines when a crime is severe enough to justify interferences with the right to a private life?

The questions referred to the Court: Who has the power to define?

In the case at stake, the public prosecutor asked for judicial authorisation to access traffic and location data to identify the perpetrators of aggravated theft of mobile phones. Under Italian law (Legislative Decree 196/2003), judicial authorities can grant access to such data when 1) relevant for the investigation of 2) a crime punished with a maximum term of imprisonment of at least three years, 3) provided that there is sufficient evidence of its

commission. When deciding on the data access request, the judicial authority decided to halt the proceeding and refer to the Court of Justice. More specifically, the referring court doubted the compatibility of Italian law with Article 15(1) Directive 2002/58. In the referring court’s view, Italian legislation fails to observe the proportionality principle, which would preclude an infringement of the right to privacy for an offence such as mobile phone theft. Moreover, the referring court asked whether national law is sufficient to define ‘serious crime’ or whether judicial authorities retain discretion in granting or denying the public prosecutor’s request to access location and traffic data.

The ruling

National security and criminal law enforcement are delicate areas where Member States are eager to retain sovereignty, which would be impaired if the concept of serious crime would be defined by EU law. For this reason, the case at stake holds significant importance for the delimitation of competence between the EU and national legal orders. The court had to address a twofold question in Procura (C-178/22).

Firstly, is serious crime an autonomous concept of EU law or should Member States retain discretion to determine the benchmark of seriousness in line with the specificities of their societies? As the Court acknowledges, what constitutes a crime is specific to the social realities and legal traditions (C-178/22, para 45). In light of this, and in line with the AG Opinion, the Court clarified that it is for Member states to define the concept of ‘serious offence’, provided that EU law principles and fundamental rights are respected. In particular, measures taken by Member States should be based on objective criteria and comply with the proportionality principle (C-178/22, paras. 47-50).

Secondly, provided that national law –setting derogations to the confidentiality of communications for the prosecution of serious crimes– is in line with EU principles, should judicial authorities still hold discretion in assessing the seriousness of the crime in the concrete case? In their ruling, the Court held that national law is not per se sufficient to justify a derogation in abstracto but should be complemented with an assessment in concreto by judicial authorities (C-178/22, paras. 60-61). Judges should, therefore, be free to refuse a data access request by public prosecutors if the offence is manifestly not serious (C-178/22, para. 62).

In conclusion, the Court of Justice ruled that Article 15(1) Directive 2002/58 must be interpreted as:

not precluding a national provision which requires a national court, acting in the context of a prior review carried out following a reasoned request for access to a set of traffic or location data – which are liable to allow precise conclusions to be drawn concerning the private life of a user of a means of electronic communication and retained by providers of electronic communications services – submitted by a competent national authority in the context of a criminal investigation, to authorise such access if it is requested for the purposes of investigating criminal offences punishable under national law by a maximum term of imprisonment of at least three years, provided that there is sufficient evidence of the commission of such offences and that those data are relevant to establishing the facts, on condition, however, that that court is entitled to

refuse such access if it is requested in the context of an investigation into an offence which is manifestly not a serious offence, in the light of the societal conditions prevailing in the Member State concerned (C-178/22, para 64).

Adding Layers of Protection: The Importance of Judicial Review

The judgment is significant for the protection of individuals in the digital context by requiring judicial authorities to strike a balance between national security interests and the right to privacy (see also the judgment delivered on the same day in La Quadrature du Net and Others C-470/21, commented in EU Law Live here). As criminal investigations are increasingly driven by data analyses and supported by advanced technologies, setting strict requirements for justified interference with the right to privacy is paramount. This judgment is an important step towards the effective protection of individuals for two reasons.

First, as the judgment explains, what constitutes a crime reflects the specificities of societies. Consequently, the criminalisation of conduct can change over time and even be politicised by governments. Consider, for instance, the new crime introduced by the current Italian government, which punishes the conduct of those who organise rave parties with imprisonment of a maximum of six years (the same punishment for manslaughter). Requiring judicial authorities to retain discretion has constitutional implications in the division between the executive, legislative, and judicial powers.

The judgment also has significant consequences for delimiting the exceptions to the right to privacy for national security interests. As the recent experience with the Artificial Intelligence Act (see the statement by the #ProtectNotSurveil coalition) and the 2024 Paris Olympic Games have shown, national security interests are invoked by States to justify the introduction of advanced technologies, particularly in the fields of criminal law, migration and asylum. Specific derogations to the Directive 2002/58 have also been recently introduced (Regulation 2024/1307 and Regulation 2021/1232) as regards the use of technologies by providers to combat online child sexual abuse. With this judgment, the court clarified that such exceptions must respect EU law principles and fundamental rights not only in abstracto, with legislation setting derogations based on objective criteria, but also in concreto, requiring judicial authorities to assess the seriousness of the crime in the individual case. In this way, the Court has given the power to define what constitutes a ‘serious offence’ not only to national legislators but also to the judicial authorities.

Francesca Palmiotto is a postdoctoral researcher at Hertie School’s Centre for Fundamental Rights working on the project “AFAR: Algorithmic Fairness for Asylum Seekers and Refugees” funded by the Volkswagen Foundation. Francesca is the co-founder and Chief Editor of DigiCon. Her recent publications include “When is a Decision Automated?” published in the German Law Journal.

SUGGESTED CITATION: Palmiotto, F.; “The Power to Define: Privacy Rights, Criminal Investigations and the Concept of ‘Serious Crime’ (Case C-178/22 Procura della Republica presso il Tribunale di Bolzano)”, EU Law Live, 20/05/2024, https://eulawlive.com/op-ed-the-power-to-define-privacyrights-criminal-investigations-and-the-concept-of-serious-crime-case-c-178-22-procura-della-republica-presso-il-tribunale-di-bolzano/

No good hiding behind others: Court of Justice strengthens precautionary fact-finding duties under pesticide Regulation (Case

C-308/22, PAN Europe and

Joined

Cases C-309/22 and 310/22,

PAN Europe)

Luca Knuth

On 25th of April, the Court of Justice delivered two rulings concerning the authorisation of plant protection products. Emphasising the precautionary principle, the Court strengthened national authorities’ fact-finding duties within the complex distribution of competence pursuant to the Plant Protection Products Regulation 1107/2009 (PPP Regulation).

Facts and questions

The two rulings stem from national proceedings triggered by environmentalist NGO Pesticide Action Network Europe (PAN Europe) and concern authorisation procedures for plant protection products under the auspices of the Dutch College van gewasbeschermingsmiddelen en biociden (CTGB), regarding the pesticide closer (C-308/22) as well as two fungicides ( Joined Cases C-309/22 and C-310/22, ‘endocrine disrupting properties’).

In both procedures, the Dutch authority had rejected PAN Europe’s claims to consider additional scientific knowledge available only after the procedure for authorisation had started. In C-308/22, the CTGB claimed, inter alia, that it was barred from taking additional factual aspects into account since the scientific examination was performed by an Irish authority in the course of the same procedure. In the other, joint cases (C-309/22 and C-310/22), the CTGB rejected to consider information as to potential endocrine disrupting properties of an active substance contained in the plant protection products subject of the authorisation procedure, arguing that taking the information into account would be excluded by the relevant Guidelines and would encroach on the Commission’s competence to authorise active substances (Chapter II PPP Regulation).

Accordingly, the referring court requested the interpretation of the PPP Regulation as to the possibilities to raise (C-308/22) and the requirements (C-309/22 and 310/22) to consider additional information in the respective authorisation procedures.

No good hiding in multi-level and transnational procedures

The Court’s point of departure in both rulings is the openly phrased wording of the Regulation, which would not exclude technical or scientific evidence from being considered – be it by categorical or by temporal restriction. Competent authorities thus remain in principle free to consider knowledge available only after submission of an

application for authorisation (C-308/22, paras. 92-3; C-309/22 and C-310/22, paras. 77-8). Subsequently, the Court rejects all attempts to limit this cognitive discretion by recourse to the complexities of the competence setting under the PPP Regulation.

Firstly, a horizontally split procedural setting as present in Case C-308/22, where reporting and decision-making is distributed between two Member States’ authorities, does not hinder the decision-making authority to depart from scientific findings made by another Member State’s reporting authority; in particular, where it finds additional technical or scientific information not considered by the reporting Member State and indicating the existence of a serious risk (C-308/22, para. 70). If the latter performs a novel assessment due to alleged deficiencies of the initial assessment, there is no obligation of a competent authority to involve the examining authority in this transnational setting (C-308/22, para. 84).

The Court also clarifies national courts’ abilities to scrutinise factual findings of another Member State’s reporting authority. In that vein, its response is a ‘yes, but’, affirming jurisdiction as to considering the conclusions of these assessments, whilst they ‘cannot substitute their assessment of the scientific and technical facts for that of the competent national authorities’ (Case C-308/22, para. 75) – a phrase similarly used in the EU Courts’ own scrutiny of EU bodies’ scientific assessments.

National authorities’ cognitive discretion is neither excluded by the vertical distribution of competence established by Regulation 1107/2015 vesting the centralised authorisation procedure for active substances in the European Commission pursuant to its chapter II. Whilst a national authority is barred from assessing the active substance as such, it remains free to consider properties of the active substance in its assessment of the plant protection product – after all, the active substance is a component of the plant protection product (C-309/22 and C-310/22, paras. 82-3). Lastly, being legally non-binding, guidance documents drawn up by EU bodies can neither fully determine the scope of facts normatively deemed relevant (C-308/22, para. 93-4) – ‘[Guidelines] are’, in the words of AG Medina, “what the name suggests” (AG Medina, Opinion in Case C-308/22, para. 74).

Precaution, epistemic openness and fact-finding as a procedural obligation

Protection of health and environment is inextricably linked to the precautionary principle as the latter allows to foster the former in that it requires what could be coined as ‘epistemic openness’ of the procedure. The reference to ‘current scientific and technical knowledge’ serves as a – necessary and expectable (C-309/22 and C-310/22, para. 98) - concession to the fluid state of technical and scientific knowledge; the legislature therewith reacts to scientific uncertainty by inducing a degree of legal uncertainty via this indeterminate reference. That legislative technique, though, does not breach the principle of legal certainty as the interest in legal certainty is to be balanced with the ratio of precaution and a high level of protection (C-308/22, paras. 107-8; C-309/22 and 310/22, paras. 97-8).

Answering the question in Joined Cases C-309/22 and C-310/22, the Court switches from what knowledge can be assessed towards what shall be assessed: Given that endocrine disrupting properties are expressly referred to in the Annex to the PPP Regulation and relevant and reliable knowledge was available at the time of the

examination, the authority was required to consider it (para. 100). Therewith, the Court has continued a line of cases – especially Blaise and Others (C-616/17) and PAN Europe and Others (C-162/21)– strengthening the precautionary principle and the priority of protecting health and environment under the PPP Regulation.

Luca Knuth is PhD researcher at the Universities of Maastricht and Kiel and research assistant of the latter’s Hermann-KantorowiczInstitute. He is co-author with Ellen Vos of ‘When EU Courts meet science’, in: Mark Dawson, Bruno de Witte, and Elise Muir (eds.), Revisiting Judicial Politics in the EU (Edward Elgar, 2024), pp. 191-228, as well as ‘Food Culture and the Far-Right: Making Sense of the Italian Ban on Cultivated Meat’, Verfassungsblog 13 December 2023, available at: https://verfassungsblog.de/foodculture-and-the-far-right/ (with Guido Bellenghi).

SUGGESTED CITATION: Knuth, L.; “No good hiding behind others: Court of Justice strengthens precautionary fact-finding duties under pesticide Regulation (Case C-308/22, PAN Europe and Joined Cases C-309/22 and 310/22, PAN Europe)”, EU Law Live, 21/05/2024, https://eulawlive.com/ analysis-no-good-hiding-behind-others-court-of-justice-strengthens-precautionary-fact-finding-duties-under-pesticide-regulation-case-c-308-22-pan-europe-and-joined-cases-c-309-22-and-310/

National Security Derogations from Derived Residence Rights under Article 20 TFEU – Joined Cases C-420/22 and C-528/22 (information classifiées)

Stefan Salomon

Introduction

Over the past few years, EU Member States increasingly relied on national security grounds to revoke residence permits of third country nationals (Hungarian Helsinki Committee, The right to know in the EU, 2024, p. 8). These decisions to categorise third country nationals as threat to national security are often based on classified information to which neither the third country national concerned nor her legal representative have access to.

The decision of the Court of Justice in NW and PQ (C-420/22 and C-528/22 information classifiées) concerns these broader practices of Member States to rely national security grounds and classified information when revoking residence permits of third country nationals. Both cases reached the Court of Justice by way of preliminary references from the Szeged High Court in Hungary. The applicants are Turkish (NW) and Nigerian (PQ) nationals who had been lawfully residing in Hungary for more than five years. Both are married to Hungarian citizens with whom they also have children. The Hungarian immigration authorities revoked NW’s and rejected PQ’s application for residence permit on the grounds because they allegedly posed a threat to national security. In both cases, the decision of the Hungarian authorities did not include any reasons as it was based on classified information.

While the cases concern a ‘classical’ Union citizenship and immigration law issue – derogations from derived rights of residence of third country nationals under Article 20 TFEU – they are also relevant for other legal areas in which Member States rely on national security arguments and the use of classified information to curtail fundamental rights of Union citizens.

Clarifications on derived residence rights under Article 20 TFEU

The first issue that the Court of Justice had to address was whether Article 20 TFEU was applicable. The Hungarian government argued that because NW and PQ had failed to apply for a residence permit based on Article 20 TFEU that provisions did not apply to them.

It might be helpful for the reader to recall here briefly the principles that the Court of Justice established in its settled case law on derived residence rights of third country nationals under Article 20 TFEU. In principle Article 20 TFEU only applies when Union citizens have exercised their free movement rights under EU law. However, Article 20 TFEU may also apply in situations in which Union citizens have not exercised their free movement

rights, namely when the refusal of a residence permit to a third country national would compel the Union citizen to accompany the third country national and to leave the territory of the Union as a whole. A Union citizen would be compelled to leave the territory of the Union if a relationship of dependency exists between the Union citizen and the third country national. Whether a right of residence must be granted on the basis of Article 20 TFEU thus depends on the intensity of the relationship of dependency between the third country national and the Union citizen family member (C-624/20 E.K. para 41; C-528/21 M.D. para 40; and C-133/15 Chavez Vilchez, para 69-72).

In NW and PQ (C-420/22 and C-528/22), the Court of Justice added two clarifications to these principles. First, the Court of Justice made clear that Article 20 TFEU also applies to the withdrawal of and the refusal to issue a residence permit (C-420/22 and C-528/22, para 65). Most of the existing case law on derived residence rights under Article 20 TFEU had so far only concerned decisions of expulsion.

Secondly, the Court of Justice stated that the failure to submit an application for a residence permit based on Article 20 TFEU does not exclude the third country national from the scope of Article 20 TFEU. Even though national authorities would not be obliged to systematically gather all information on their own initiative, they are nevertheless obliged to assess whether a relationship of dependency exists, ‘if necessary by gathering the information necessary for that purpose’ (C-420/22 and C-528/22, para 71). This interpretation showcases the Court of Justice’s broader preference to give priority to the effectiveness of rights under Article 20 TFEU over national procedural autonomy of Member States.

National security: no blank cheque

The most salient issue in NW and PQ (C-420/22 and C-528/22) was that the immigration authorities withdrew the applicants’ residence permits on the basis of a non-reasoned decision because they allegedly represented a threat to national security. The decision that the applicants represented a threat to national security was issued by a different authority – the Constitutional Protection Office – and based on classified information to which neither the immigration authorities, nor the applicant or the referring courts had access to. It is against this background that the Court clarified the requirements for derogating from Article 20 TFEU on national security grounds. In this regard, the Court distinguished between substantive and procedural requirements.

Regarding the substantive requirements, the Court of Justice had already stated in preceding decisions that safeguarding public policy or public security present an exception to Article 20 TFEU. Any such exception, however, must be narrowly construed and the third country national must represent a ‘real, immediate and sufficiently serious threat to public policy or public or national security’ (C-528/21 M.D., para. 67). Invoking national security is not a blank cheque in immigration decisions. Rather, any decision to withdraw or refuse a residence permit for a third country national family member of a Union citizen must be based on an examination of the individual circumstances and an assessment of the proportionality of the decision. The Court recalled that any assessment of proportionality must take into account the best interest of the child as set forth in Article 24(3) EU-CFR (C-420/22 and C-528/22, para. 77). Already in its decision in Subdelegación del Gobierno en Toledo

the Court of Justice had held that the best interest of the child encompasses ‘the child’s right to maintain on a regular basis a personal relationship and direct contact with both of his or her parents’ (Joined Cases C-451/19 and C-532/19, para. 66). In this regard, the principle of best interests of the child functions, as Frasca and Carlier suggest, as ‘safeguarding principle’ that inserts another layer of protection in order to safeguard the protection of Union citizens children who are in a situation of dependency (Frasca and Carlier, ‘The best interests of the child in ECJ asylum and migration case law, CMLR 2023 60:2, p. 379).

Regarding the procedural requirements for derogating from Article 20 TFEU, the Court of Justice distinguished between the different stages of the administrative procedure and judicial proceedings.

The right to a sound administrative procedure in Article 41 EU-CFR requires that the individual concerned must have access to information on her file so as to make her views known to the authorities. The Court of Justice recalled that the purpose of the right to access information is to allow authorities to take decisions in full knowledge of the facts and all individual circumstances (C-420/22 and C-528/22, para. 88-90). In the same vein, the Court repeated its settled case law on effectiveness of the right to defence under Article 47 EU-CFR, which includes two complementary limbs: first, the individual right of a person to know the reasons of a decision against that person and the right to have access to all the material in the file in the case; second, the power of the national court to have access to all the necessary information and the reasons in order to carry out a review of the lawfulness of the decision (C-420/22 and C-528/22, para 92-93).

The Court of Justice however makes clear that the rights of defence in Article 47 EU-CFR are not absolute rights and the right of access to a file and to obtain information can be balanced against the national security of a member state (C-420/22 and C-528/22, para 94). National security thus functions as limitation to the rights in Articles 41 and 47 EU-CFR and a Member State may justify non-disclosure on national security grounds. However, the Court of Justice sets a strict standard for invoking national security limitations. The disclosure of information must jeopardise the security of a Member State in a direct and specific manner, either by endangering individuals or the functioning of state authorities (C-420/22 and C-528/22, para. 96).

Moreover, the Court of Justice sets a counter-limit to national security limitations. The individual concerned must, at the very least, be informed on the substance of grounds of the decision against her. Otherwise, the right of defence in Article 47 EU-CFR would be rendered ‘meaningless’ (C-420/22 and C-528/22, para 95).

Judicial review of the reasons to categorise information as classified?

If Article 47 EU-CFR entails the power of national courts to access all necessary information to effectively review a decision, it raises the question whether that power also entails the review of the reasons to categorise information as classified. This raises the following dilemma. On the one hand, rules relating to the categorisation of information as classified or not remain within Member States’ competences. This would preclude the application of the EU-CFR to a substantive review of the categorisation of classified information. On the other hand, the

rights in Article 47 EU-CFR are only effective if courts can examine whether the reasons given by authorities for categorising information as classified or not are compatible with Article 47 EU-CFR in the first place.

The Court of Justice adopted a twofold approach to this dilemma. First, it relied on a wide interpretation of Article 47 EU-CFR (based on the preceding decision in Case C-300/11 ZZ, para. 64), which requires that national courts must not only be able to examine all the grounds and evidence on which an administrative decision is based, but also ‘to verify whether or not the reasons relied on by the national authority relating to State security actually preclude the full disclosure of those grounds and that evidence, is compatible with Article 47 of the Charter’ (C-420/22 and C-528/22, para 108).

Second, the Court of Justice held that if the reasons for categorising specific information as classified is incompatible with Article 47 EU-CFR, it would be sufficient if the competent authorities forwarded that information to the individual concerned (C-420/22 and C-528/22, para. 109). Article 47 CFR would not require a re-categorisation of classification information to non-classified. While the categorisation of information as classified remains an issue of national law, the Court of Justice stripped it of its principal legal effects (restriction of access by the individual concerned). For good measure, the Court added that if national authorities fail to forward the information to the individual, it is up to the ‘national court to draw the appropriate conclusions from that failure’ (C-420/22 and C-528/22, para. 112).

Conclusion

The decision in NW and PQ (Cases C-420/22 and C-528/22) offers a much needed clarification of the legal criteria applicable to Member States’ expanding practices to withdraw residence permits based on classified information. Yet, it remains to be seen whether and to what extent this decision will be implemented by Hungarian courts, as well as other Member States’ courts which are also bound to apply the reasoning of the Court of Justice in the NW and PQ decision. Given that Hungarian courts do not have the right to review the lawfulness of a classification and the fact that the Hungarian Supreme Court interprets the case law of the Court of Justice as not imposing an obligation to disclose the essence of the grounds to an applicant (Hungarian Helsinki Committee, p. 49), this author remains sceptical that the decision in NW and PQ will be fully implemented by Hungarian courts. In a climate of judicial repression where judges fear concrete consequences for referring preliminary questions to the Court of Justice, one would have, at least, hoped for more support from the Court of Justice than ‘it’s up to the national court to draw appropriate conclusions’.

Stefan Salomon is Assistant Professor of European law at the

University of Amsterdam.

SUGGESTED CITATION: Salomon, S.; “National Security Derogations from Derived Residence Rights under Article 20 TFEU – Joined Cases C-420/22 and C-528/22 (information classifiées)”, EU Law Live, 24/05/2024, https://eulawlive.com/op-ed-national-security-derogations-from-derivedresidence-rights-under-article-20-tfeu-joined-cases-c%e2%80%91420-22-and-c%e2%80%91528-22-information-classifiees-by-ste/

C-222/23, Toplofikatsia Sofia: the First Judgment of the Court of Justice Addressing the 2020 Service Regulation

Carlos Santaló Goris

On 1st July 2022, the Regulation (EU) 2020/1784 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (‘the 2020 Service Regulation’) started to apply, succeeding the 2007 Service Regulation. Among the innovations brought by the 2020 Service Regulation is the introduction of a special procedure to trace the recipients’ addresses in another Member State. Member States can employ, at least, one of the following three methods to trace the recipients’ addresses (Art. 7):

• Providing for designated authorities to which transmitting agencies may address requests on the determination of the address of the person to be served

• Allowing persons from other Member States to submit requests, including electronically, for information about addresses of persons to be served directly to domicile registries or other publicly accessible databases by means of a standard form available on the European e-Justice Portal; or

• Providing detailed information, through the European e-Justice Portal, on how to find the addresses of persons to be served

The use of this special mechanism to trace a recipient’s address was the object of one of the questions submitted to the Court of Justice in the case C-222/23, Toplofikatsia Sofia. The judgment was rendered last 16th April.

This case has its roots in a national order for payment proceeding before the Sofia District Court. During the examination of the national order for payment, the Sofia District Court detected some potential incompatibilities between Bulgarian national law and EU law. According to Bulgarian law, Bulgarian nationals are always required to have their permanent address in Bulgaria, even if they live abroad. The national population register contains the details of their national permanent address. However, concerning the habitual residence abroad, the national population register only mentions the country where this is located. This was the situation of the debtor against the national payment order that was requested: living abroad but with a mandatory permanent domicile in Bulgaria. Furthermore, according to the case law of the Bulgarian Supreme Court, Bulgarian courts always have jurisdiction to issue national payment orders against Bulgarian nationals, even when living abroad.

The Sofia District Court asked the Court of Justice to examine whether the prerequisites under Bulgarian law to have a permanent address in Bulgaria and possibility of issuing always national payment orders against Bulgarian nationals were compatible with the terms of the Brussels I bis Regulation. The Brussels I bis Regulation establishes that persons ‘shall be sued in the Member State of their domicile’ (Art. 4(1)), and exceptionally, they ‘may be sued

in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7’ contained in its Chapter 2 (Art. 5(1)). The Brussels I bis Regulation leaves the notion of domicile to the discretion of national law. However, the Court determined that relying on the permanent address that Bulgarian nationals are required to have to establish their domicile ‘undermines the effectiveness of Regulation No 1215/2012, since it amounts to replacing the domicile criterion, on which the rules of jurisdiction laid down by that regulation are based, with the criterion of nationality’ (para. 60)

The Court of Justice also found that the Bulgarian Supreme Court’s interpretation that Bulgarian courts are always competent to issue payment orders against Bulgarian nationals, even when domiciled abroad, contravened the text of the Brussels I bis Regulation. Under the Brussels I bis Regulation, Bulgarian courts might not have jurisdiction to issue national payment orders against Bulgarian nationals when these are domiciled in other Member States, and Bulgarian courts do not have jurisdiction under other grounds than the domicile.

Besides the inquiries concerning the Brussels I bis Regulation, the Sofia District Court also submitted a question about the 2020 Service Regulation. The Bulgarian court asked whether, in case it has jurisdiction to issue the national payment order, it could rely on the special procedure of the 2020 Service Regulation to trace the recipient’s address. In this regard, the Court of Justice stated that the 2020 Service Regulation can be used as long as the recipient of the documents resides in another Member State. The Court acknowledges that, as occurred with the 2007 Service Regulation, it is not possible to rely on the 2020 Evidence Regulation when the recipient’s address is unknown. However, unlike the 2007 Service Regulation, the recast offers a special mechanism to trace the defendant’s address. For that reason, the Bulgarian court could rely on this mechanism to trace the debtor’s address in the Member State where he has his habitual residence. In general terms, the judgment does not offer an added value for the interpretation of the Service Regulation. However, the judgment serves to point out that one of the main deficiencies of the 2007 Service Regulation has been addressed in the recast: ignoring the recipient’s address should no longer be a barrier to using this instrument.

SUGGESTED CITATION: Santaló Goris, C.; “C-222/23, Toplofikatsia Sofia: the First Judgment of the Court of Justice Addressing the 2020 Service Regulation”, EU Law Live, 24/05/2024, https://eulawlive.com/analisis-c-222-23-toplofikatsia-sofia-the-first-judgment-of-the-court-of-justiceaddressing-the-2020-service-regulation-by-carlos-santalo-goris/

Carlos Santaló Goris is a lecturer at the Centre for Judges and Lawyers of the European Institute of Public Administration.

SYMPOSIUM

SYMPOSIUM ON CLIMATE PROTECTION AS A EUROPEAN FUNDAMENTAL RIGHT UNDER THE ECHR AND BEYOND

No Nature, no Human Rights: Implications of KlimaSeniorinnen for Biodiversity

Niels Hoek and Justine Muller

Biodiversity loss, alongside the extinction of nature as we know it, continues at an unprecedented rate. Land and sea-use changes, invasive species, and chemical pollution are well-known anthropocentric pressures on ecosystems. As a result, some estimates predict that one million species, including 40 % of insects, will become extinct in the coming decades. Further down the line, scientists warn us that half of all current species could be gone at the end of the century, with the extinction rate 10.000 higher than the natural, historic rate. It is clear that the current biodiversity crisis matches, in scale and importance, the climate crisis. So, this begs the question: what could the landmark KlimaSeniorinnen case at the European Court of Human Rights entail for biodiversity protection? And perhaps more crucially, what opportunities may arise for biodiversity litigation going forward as a result of this case? This opinion piece argues not only that human rights are at risk as a direct result of biodiversity loss, but also that the rationale utilised by the Court in KlimaSeniorinnen on climate change could be translated to the biodiversity crisis. After all, biodiversity loss and climate change are intertwined and mutually reinforce one another.

1. The ECHR and Nature

Unlike some of its more ambitious (American and African) counterparts, the European Court of Human Rights (ECtHR) is not meant for environmental protection on its own. The ECtHR, as a court focusing on human rights is highly anthropocentric. In the same breath, nature cannot speak for itself. The burden, thus, falls on NGOs and individual members of the public to litigate on behalf of human interests in otherwise environmental cases. The problem, however, is that nature is often destroyed by the time the case reaches the Court. In turn, the Court oversees a form of ‘deathbed conservation’, especially on several occasions when its interpretations have been particularly restrictive. Complaints relating to environmental nuisances have to show, first, that there was an ‘actual interference’ with the applicant’s enjoyment of his or her private or family life or home, and, secondly, that ‘a certain level of severity’ was attained. This assessment can only be done on a case-by-case basis and does not encompass a more general right to a healthy environment.

However, addressing biodiversity loss requires a comprehensive approach, including measures such as restoring meandering rivers, rewetting peatlands, facilitating the reintroduction of keystone species, engaging in connectivity restoration, and expanding urban green space. It requires overarching policies that seek to restore biodiversity levels and progressive improvement of natural and agricultural ecosystems rather than patchwork harm reduction. Additionally, the size of these interventions matters. Provided nature is given space, it can recover. Conservation works.

2. Implications of KlimaSeniorinnen for Biodiversity Protection and Recovery

This brings us to the recent ECtHR landmark climate litigation case of Verein KlimaSeniorinnen Schweiz and Others v. Switzerland. Here, the Court crucially found that Article 8 ECHR ‘encompasses a right for individuals to effectively protect (..) from serious adverse effects of climate change on their (..) quality of life’. This obligation flows from the causal relationship between climate change and the enjoyment of Convention rights. Therefore, the State has a positive obligation to adopt regulations and measures to mitigate the irreversible effects of climate change. The Court relied heavily on expert opinion that underlined the dangers of climate change, such as the International Panel of Climate Change (IPCC).

For the ECtHR, it was also relevant that the Swiss Government had committed to the United National Framework Convention on Climate Change and the subsequent 2015 Paris Climate Agreement, which set out a legal obligation to limit greenhouse gas (GHG) atmospheric concentrations. The logic of the court encompasses two key implications for biodiversity protection that are briefly explored below: the necessity to protect biodiversity to achieve climate change mitigation, as set called for by the ECtHR (i) and the relevance of the reasoning of the Court on climate change, which may hold relevance for separate (future) biodiversity litigation (ii).

3.1 Implication I: Carbon sinks & biodiversity protection

In the KlimaSeniorinnen case, the ECtHR notes that ‘decarbonisation of the economies and ways of life can only be achieved through a comprehensive and profound transformation in various sectors’ which will ‘require a very complex and wide-ranging set of coordinated actions, policies and investments involving both the public and the private sectors.’ Here, it is crucial to note that it is difficult, if not impossible, to mitigate climate change without nature restoration. It is a package deal. There is a plethora of examples of this. To give but just a few, peatlands compose 3% of the northern terrestrial surface but account for 30% of global carbon storage. Restoring (and rewetting) these ecosystems will be crucial to any climate change efforts. The ocean and marine life, including whales and plankton, are the largest carbon sink, cementing the necessity for ocean recovery. Additionally, healthy ecosystems act as important buffers to regulate local climate, preventing floods whilst mitigating the effects of dry seasons, and green space in cities acts as natural cooling. In order to effectuate the obligations formulated by the Court, nature restoration cannot be forgotten, whereby it is important that these policies span across urban, natural and agricultural ecosystems, to be deemed effective. This, in essence, reaffirms the importance of proceeding with the fiercely debated EU Nature Restoration Law proposal.

However, this approach does contain a risk that the measures will fall prey to a carbon tunnel vision. In this scenario, ecosystems are valued for the amount of CO2 they can sequester rather than their rich biodiversity. In the climate regime, this had previously led to an overemphasis on forests whilst undervaluing grasslands or on individual species conservation, regardless of their importance in delivered ecosystem services (from pollination to water regulation). Crucially, this brings us to the second important implication of the KlimaSeniorinnen case for biodiversity protection. Namely, we argue that the Court’s reasoning on climate change (and the polycentric

crisis) should equally be applied to biodiversity, given the severity of the impact of biodiversity loss on human well-being.

3.2 Implication II: perspective for future cases

The KlimaSeniorinnen case is already considered a landmark case of the ECtHR and climate litigation in general. One of the key aspects of this typecasting as a landmark case comes from the narrative that the Court uses to justify the uniqueness of climate change as an environmental issue. However, as biodiversity lawyers, we could not help but see the similarities between the Court’s narrative of the climate crisis and the concomitant biodiversity crisis. In its decision, the Court lists several factors that make the climate crisis such a severely dangerous event that the usual ECtHR approach to environmental cases is neither adequate nor appropriate and cannot be transposed directly (para. 422). Whilst the applicants themselves in KlimaSeniorinnen have built their claims around the climate crisis, we argue that this list of factors could also justifiably grant this same special status to the biodiversity crisis, in potential future cases.

1. The first factor that the ECtHR puts forward as a justification for adopting a specific approach for cases in the context of climate change is that with climate change, there is no single or specific source of harm (para. 416). Rather, the harm comes from aggregated levels of GHG emissions. A related factor is that the sources of GHG emissions are not limited to specific activities that could be labelled dangerous but ‘arise in the context of basic activities in human society’ (para. 418). Here, the global biodiversity crisis equally is caused by the accumulation of many different direct and indirect sources ranging from land and sea-use changes, pollution, consumption, and many others (IPBES, 58-61). Most of these activities are not labelled as dangerous but are instead (unsustainable) pillars of our modern economy.

2. Another key factor pointed out by the Court is that CO2 is not toxic per se at an ordinary level (para. 416). In the same way, many anthropogenic activities that harm biodiversity are causing a global crisis because of their massive scale. For example, this is the case of fishing. This ancestral practice does not cause any harm to biodiversity per se, even locally, if practised sustainably. Industrial fishing, however, is one of the most harmful activities with biodiversity preservation in mind (as noted by the IPBES, p.58-59). In other words, the scale of the drivers of biodiversity loss matters greatly.

3. Another key point that the Court relies upon is that the chain of effect between cause (GHG emission) and harm (the consequences of climate change) is both complex and unpredictable (para. 417). In addition, the ECtHR mentions the significant risks for humanity linked to this chain of effect. It states, ‘in the longer term, some of the consequences risk destroying the basis for human livelihoods and survival in the worst affected areas.’(para. 417). Both points hold up for biodiversity loss. Biodiversity relies on a complex system of different interactions between individuals of the same species, between different species, and between species and their environment. What happens after losing one species or one ecological niche is unpredictable. Several tipping points exist whereby healthy ecosystems slip into degraded ones. It should be stressed that nature underpins

basic life support for humanity, such as providing food, medicine, and the backbone of our economy. Losing one species may not put an entire ecosystem at risk –but where does the boundary lie? How far can we go in light of the current extinction rate? Both climate change and biodiversity loss are plagued by scientific uncertainty in this regard and should thus be guided by the precautionary principle. For climate change, that means at least adhering to the UNFCCC Paris Agreement’s 1.5oC target. In contrast, for biodiversity loss, the Kunming-Montreal Global Biodiversity Framework is of the utmost importance (which sets out, for example, to protect 30 % of the land and sea areas).

4. The ECtHR considers climate change a polycentric issue, meaning that the fight against climate change does not depend on adopting specific localised or single-sector measures (para. 419). Whilst climate change is a global challenge, the importance of GHG sources and the necessity for mitigation and adaptation measures may differ from state to state (para. 422). These last two factors can also apply to the global biodiversity crisis. For example, deforestation in the Amazon is caused by both local incentives (such as cattle farming) and global drivers (through the subsequent supply chain). The local impacts are visible through the loss of ecosystem services, whilst the global impact can be felt through deregulating the entire climate system or increased risks of pandemics, to name a few examples. In this context, it should be stressed that not one sector is responsible for biodiversity loss. Instead, an inherently unsustainable and exploitative relationship with nature can be observed in parts of virtually all sectors, from logging, agriculture, manufacturing to mining.

A final, general point should be made. That is, beyond this judgment, an anthropocentric fallacy looms in the way we address environmental decay. In this fallacy, climate change is an imminent risk to humanity due to extreme weather and other tipping points. In contrast, biodiversity loss invokes mere images of loss for other species, from charismatic elephants to not-so-visible soil critters. Yet, this could not be further from the truth. The above highlights the similarity between biodiversity and climate change in terms of severity and importance for human survival. Precisely because of this fact, human rights are an important avenue for advocating for biodiversity protection.

4. Conclusion

We have argued that the landmark KlimaSeniorinnen case at the European Court of Human Rights represents a significant turning point in favour of nature restoration. The logic of the Court calls for a shift from local harm prevention (to protect individual rights) to the more widespread adoption of nature restoration policies to meet climate targets. Crucially, the Court’s reasoning to grant special status to the climate crisis could justify a similar type of ECtHR case on biodiversity. The loss of ecosystem services (from pollination, disease prevention, water filtration and so on) will require us to recognise the indispensable role of biodiversity in sustaining human life, for the enjoyment of ‘convention rights’. After all, nature does not need us. Instead, we need nature.

Niels Hoek and Justine Muller are PhD Researchers at the Department of Law at the European University Institute (Florence).

SUGGESTED CITATION: Hoek, N. and Muller, J.; “No Nature, no Human Rights: Implications of KlimaSeniorinnen for Biodiversity”, EU Law Live, 23/05/2024, https://eulawlive.com/op-ed-no-nature-no-human-rights-implications-of-klimaseniorinnen-for-biodiversity-by-niels-hoek-and-justinemuller/

Climate Justice in the Jurisprudence of the European Court of Human Rights. Some notes on Carême v. France, Verein KlimaSeniorinnen v. Switzerland, Duarte Agostinho & al. v. Portugal & 32 Others

Marta Torre-Schaub

‘Climate justice’ is a term, or more precisely a movement that acknowledges climate change can have disproportionately harmful social, economic, and public health impacts on disinvested populations. Advocates for climate justice are striving to have these inequities addressed head-on through long-term mitigation and adaptation strategies

In addition, climate change is mostly a human rights issue. However, the climate crisis is causing loss of lives, livelihoods, language, and culture, putting many at risk of food and water shortages, and triggering displacement and conflict. The climate crisis impedes the right to good health as well. The impacts are more severe for vulnerable populations who have limited means to adapt to climate change.

On 9th April 2024, the European Court of Human Rights (ECtHR) ruled on three applications concerning the fight against climate change and the positive obligations of the signatory states of the European Convention on Human Rights in this respect. Two of them were declared inadmissible (Duarte Agostinho and Carême). The third, Verein Klimaseniorinnen, was a great success. The judgments, their main elements and their possible scope have recently been analyzed by a number of commentators. That’s why I’ll concentrate here on highlighting the contributions of the decisions to climate justice. This article analyses the decisions in the light of climate justice as a concept aimed at alleviating inequalities in the face of the negative consequences of climate change, as well as its capacity to strengthen human rights.

Building the Right to a Clean Environment and a Safe Climate Before the ECHR

A number of organisations have come together in recent years to work out principles for achieving climate justice. Advocacy campaigns, strikes, public demonstrations, and activists’ protests have been increasingly reported to fulfill climate pledges. The recent advancements on the recognition of human rights in the context of climate change look promising (S. Chen Kwan & D. McCoy, ‘Climate Justice. Is litigation a Good Way Forward?’, United Nations University, 5 September 2023). It is hopeful that these efforts will build the momentum in countries’ commitments to climate actions in all Member States. The role of civil society as climate watchdog remains fundamental in ensuring effective actions are followed through in the quest for climate justice (M. Torre-Schaub, ‘Changement climatique: la société civile multiplie les actions en justice’, The Conversation, September 2017).

In this sense, Climate Justice, can be understood both as the access to ‘effective’ justice and to the courts (Mary Robinson Foundation for Climate Justice, ‘Principles of Climate Justice’ 2017). In this context individuals and non-governmental organisations turned to the ECtHR using human rights law as a strategic instrument to enforce climate actions. The question before the decisions were held was, does the European Convention of Human Rights (the Convention) offer strong grounds for litigation against states? Will the Court accept to affirm that states have a duty to protect human rights? The three climate judgments delivered by the Grand Chamber of the Court on 9th April 9, provide answers to these questions. More precisely, the climate cases were made on the grounds of the human rights violations of the right to life (Article 2), the right to respect for private and family life (Article 8) and the right of a fair process (Article 6) as enshrined in the Convention. The Court, in an unprecedented but ‘tailored’ way, has laid the foundations for solidifying the positive obligations of States to respect the rights of the Convention and the obligation to remain on a trajectory towards carbon neutrality by 2050. The Court has also stated the conditions under which it accepts the claimants’ interest in acting and their status as victims. Conversely, it has also stated under what circumstances and according to what analysis of the cases, applicants do not meet such conditions (Carême §76-83 and Klimaseniorinnen 470 -472, §533). The Court has also shown a rigorous analysis of its territorial jurisdiction, following what it calls ‘the spirit of the Convention’, in order to limit its action and not allow the criterion of extraterritoriality to transgress its jurisdiction. These elements put forward by the Court demonstrate its vision of achieving Climate justice.

Connecting Climate Change to Human Rights

Climate justice connects the climate crisis to the social, gender racial and environmental issues in which it is deeply entangled. It recognises the disproportionate impacts of climate change on vulnerable communities. Climate Justice links human rights and development to achieve a human-centered approach, safeguarding the rights of the most vulnerable people and sharing the burdens and benefits of climate change and its impacts equitably and fairly. Intergenerational inequity is an important element: Children and young people today have not contributed to the climate crisis in a significant way but will bear the full force of climate change impacts as they advance through life. Older and ill people too. Their rights must be at the center of all climate decision-making and action (see here).

The principles of Climate Justice that were adopted by the Mary Robinson’s Foundation were focused in these aspects and provide an excellent base for the link between climate change and human rights. The respect and the protection of human rights in order to provide a reservoir for the supply of legal imperatives with which to frame appropriate responses to climate change, rooted in equality and justice. The guarantee of basic rights rooted in respect for the dignity of the person, at the core of this approach, makes it an indispensable foundation for action on climate justice.

In this sense, several elements of these principles can be found in the ECtHR’s decisions here analysed. Among these, the sharing of benefits and burdens equitably, the guarantee that decisions on climate change are participatory, transparent and accountable, the emphasis on gender equality and equity, the use of effective

partnership to secure climate justice are well reflected in the Klimaseniorinnen decision. These principles, actually, are rooted in the frameworks of international and regional human rights law and have already been affirmed by the Court itself in other context out-climate change. What made these decisions special and remarkable is the fact they have been ruled in the context of climate emergency, contributing to urge the states to act and to assume their responsibilities on Climate Justice.

The ECHR and its Contribution to Improve Climate Justice

Climate Justice needs better ways of making decisions that include the voices of all those who are being affected by climate change. It needs also to ensure that costs and benefits of meeting the challenge of climate change are spread out fairly according to responsibility and ability. Also, it requires to think about how the needs of future generations and non-human beings, those who do not have a voice in current decisions, can be better considered in present decision-making. Within the context of climate change this means that those who have contributed most to climate change should support vulnerable people. As a fairly new concept, Climate Justice states that ‘vulnerable’ people are treated fairly in the ways in which states try to reduce further climate changes, by cutting down the amount of GHG emissions and adapting to the changes (see here). In the context of the ECtHR decisions, Climate Justice is to be achieved by Switzerland, reducing its emissions, according to the principle of common and differentiated responsibilities (and the Paris Agreement objective), to levels that will prevent dangerous human induced interference with the climate system. Also, from the Klimaseniorinnen decision, it appears that Switzerland must provide short- and long-term climate finance to help the most vulnerable (the Klimaseniorinnen NGO which represents the older women) and to ensure democratic and participative context on the elaboration of climate change law and policy making.

How the Verein Klimaseniorinnen Decision enhance Climate Justice

Human Rights provided in the Convention deliver valuable minimal thresholds, legally defined, about which there is widespread consensus among the Member States of the Council of Europe. The guarantee of basic rights rooted in respect for the dignity of the person, which is at the core of this approach, makes it an indispensable foundation for action on Climate Justice.

More precisely and, as revealed in Klimaseniorinnen, the ‘guarantee that decisions on climate change are participatory, transparent and accountable’ appears in the judgment through the obligation to participate in decision-making processes fair, accountable and open. This is essential to the growth of a culture of Climate Justice. The voices must be heard and the states must act upon them. The requirement for transparency in decision-making, and accountability for decisions that are made is affirmed as an essential part of Article 6 of the Convention. Thus, Switzerland must ensure that policy developments and policy implementation in this field are informed by an understanding of the needs in relation to Climate Justice.

Another component is the emphasis on gender equality and equity, meaning that the impacts of climate changes are different for women and men. In Klimaseniorinnen, the Court accepts that older women bear a burden in

situation of particular vulnerability. In other terms and going further in my comment, older women’s voices must be heard, and their priorities supported as part of Climate Justice. This is a vital aspect of the Klimaseniorinnen ruling. Involving civil society in associations likely to represent the most affected by climate change is for the court the most adequate way to build the path.

Still, half of the Way to go

Despite this progress and innovative elements, difficulties and limits still remain. While climate litigation before the ECtHR undeniably offers a number of advantages that explain its growing success, it is no less fraught with difficulties.

The first difficulty, which is almost structural, is the preference for the ECtHR to use non-adversarial methods, followed by the limited jurisdictional basis concerning a global issue. Member States of the Convention have accepted the compulsory jurisdiction of the Court with the limit of territorial jurisdiction. This difficulty came out in the Duarte Agostinho and others v Portugal and 32 other decision.

Other obstacles limit the widespread success of this type of legal action, which is the requirement for the plaintiffs to prove that they have suffered or will suffer a ‘particular’ injury caused by the defendant’s unlawful action or inaction. It is indeed hard to demonstrate that a government’s failure to legislate on climate change so directly affects the plaintiff. Plaintiffs can only prove such injuries if they show a concrete, specific and actual or imminent injury in fact, a causal link that ‘fairly traces’ to a violation of the right invoked caused by the defendant’s conduct. The Carême, Duarte Agostinho and the individual victims in the Klimaseniorinnen case have been dismissed for these reasons.

The outcome of such arguments depends to a large extent on the acceptability of such grounds before the Court. We can hope that after the Klimaseniorinnen decision the Court will be more inclined to accept this type of argument in favor of Climate Justice. One can expect too that the Court will be more permeable towards the theory of positive State obligations under the Convention and its influence on the evolution of domestic climate law. For these reasons it is important to persist in this path for future climate cases. The avenue to reinforce the effectiveness of the climate neutrality objective can only be ensured by legislative provisions that are coherent with Climate Justice principles.

Marta Torre-Schaub is Senior Law Professor at the Institut de sciences juridique et philosophique de la Sorbonne, Université Paris 1 Panthéon-Sorbonne.

SUGGESTED CITATION: Torre-Schaub, M.; “Climate Justice in the Jurisprudence of the European Court of Human Rights. Some notes on Carême v. France, Verein KlimaSeniorinnen v. Switzerland, Duarte Agostinho & al. v. Portugal & 32 Others”, EU Law Live, 2405/2024, https://eulawlive.com/op-edclimate-justice-in-the-jurisprudence-of-the-european-court-of-human-rights-some-notes-on-careme-v-france-verein-klimaseniorinnen-v-switzerlandduarte-agostinho-al-v-portugal/

SYMPOSIUM

COMPETITION CORNER:

SYMPOSIUM ON COMPETITION LAW AND REGULATION

REMIT II: new investigatory powers for the EU agency in Ljubljana to strengthen the fight against market abuse in the European energy markets

Giuliana D’Andrea

On 11 April 2024, the EU co-legislators adopted Regulation 2024/1106. This amends the EU Regulation 1227/2011 on Wholesale Energy Markets Transparency and Integrity (‘REMIT’), and thus gained in the energy world the name of ‘REMIT II’.

REMIT II aims at improving oversight of the European wholesale energy markets, one of the main novelties being the new investigatory powers for the European Union Agency for the Cooperation of Energy Regulators (ACER) in cases of cross-border market abuse.

For select cross-border cases, ACER now has investigatory powers (such as requesting information and conducting dawn raids) akin to those of the European Commission in antitrust cases. However, ACER can only investigate with the consent of the energy national regulatory authorities (‘NRAs’) and, most notably, ACER does not have enforcement powers alongside its investigatory powers. Instead, ACER’s investigations complement and support those of the NRAs, who continue to be fully responsible for the enforcement. It is the NRAs that will adopt final decisions on the existence of a REMIT breach and defend such decisions before their national courts.

This unique set-up under EU law bears the promise of having cross-border cases of market abuse in wholesale energy markets investigated more effectively at EU level. At the same time, the full separation of the investigation and the enforcement, assigned to different institutional actors, is a high procedural safeguard for the investigated persons.

Background: What’s REMIT?

REMIT came into force in 2011 to foster open and fair competition and promote trust in the integrity of the European gas and electricity markets.

It saw the light on the wave of the Energy Sector Inquiry Report published by the European Commission’s DG COMP in 2007. DG COMP’s Report pointed, among other issues, to the limited transparency in the liberalised wholesale energy markets. This, in combination with the specific product characteristics, make these markets prone to market abuse, contributing to distrust in the pricing mechanisms.

REMIT thus provided, for trading in wholesale energy markets, an additional sector specific regulatory layer to the prohibition of abuse of dominance under Article 102 TFEU. It did so by mirroring, to a good extent,

the Market Abuse Directive (now replaced by the Market Abuse Regulation or MAR), applicable almost exclusively to the trading of pure financial instruments. REMIT notably introduced the general prohibition of market manipulation and insider trading in wholesale energy markets (jointly referred as ‘market abuse’). The prohibition of market abuse in REMIT applies regardless of a dominant position in the market, and closed the gap with the financial markets left by the former Market Abuse Directive. REMIT also introduced registration and data reporting obligations for market participants and market monitoring obligations for energy trading platforms.

As for the governance architecture, it foresaw a split of powers and responsibilities between the energy national regulatory authorities (NRAs) and the European Union Agency for the Cooperation of Energy Regulators (ACER).

The NRAs were assigned the core task to investigate market abuse cases and sanction breaches of REMIT. Conversely, the newborn ACER was tasked with the EU-wide central collection of trading data from market participants and, alongside NRAs, with the monitoring of energy trading. REMIT assigned to ACER the key tasks to detect and signal to NRAs suspicious trading activities and to ensure, in the enlarged European Union, coordination and consistence in the application of REMIT by NRAs. Therefore, while not directly being responsible for the investigation and enforcement of REMIT cases, ACER was given a key role in monitoring European energy markets, and in guiding and coordinating NRAs in the investigation and enforcement of market abuse cases. REMIT also assigned to ACER the responsibility of providing guidance on the application of REMIT to NRAs, thus putting ACER in the driving seat for shaping REMIT policy discussions.

Regarding investigations, REMIT envisaged for ACER a mere coordination role, including the possibility to establish cross-border investigatory groups involving multiple NRAs, financial regulators, and/or competition authorities. However, the complexity of cross-border cases, including the jurisdictional challenges and the difficulty for some NRAs to allocate adequate resources to such cases, have traditionally been an obstacle to the conduct of thorough cross-border investigation. This left an important investigatory gap and likely limited deterrence.

ACER’s new investigatory powers in REMIT II

Thirteen years after REMIT, the energy crisis prompted a call for more Europe and more integrity of the energy markets, resulting in REMIT II. In this new setting, ACER gained investigatory powers over certain cases of market abuse and breach of data reporting obligations with a cross-border dimension.

ACER’s investigatory powers under REMIT II are comparable to those of the European Commission under Regulation 1/2003. Namely, the power to conduct on-site inspections (including dawn-raids), the power to request information, and the power to take oral statements. ACER’s inspection powers include the power to conduct unannounced inspections, even in private premises. If a person hinders an ACER inspection or does not comply with a request for information, ACER can impose periodic penalty payments.

Upon completion of its investigations, ACER will issue an Investigation Report addressed to the competent NRAs, setting out the Agency’s findings and recommendations to NRAs about enforcement measures. The enforcement of the REMIT prohibitions and obligations remains exclusively with the NRAs, who continue to be the ones adopting legally binding decisions relating to breaches of REMIT and imposing fines. For cases investigated by ACER, there will be a full split between the role of investigator at EU level and the role of enforcer at national level. This unprecedented legal set-up under EU law, while potentially raising some practical difficulties, seems to set very high procedural guarantees for the persons suspected of breaching REMIT.

Some elements of ACER’s investigations under REMIT II are interesting in comparison with the Commission’s investigation procedure under Regulation 1/2003:

• A request for information from ACER can be addressed to any person, including natural persons, and an on-site inspection can be conducted also in private premises, even if not of a company director or staff member. This reflects the fact that the prohibitions of market abuse apply also to natural persons, who can therefore also be subject to a REMIT investigation.

• ACER has the possibility to “personalise” its investigations, formally appointing from its staff a dedicated Investigating Officer to lead a specific investigation. This is not a novelty in EU law. For instance, the EU Financial Regulations already foresee the Investigating Officer’s role within the European Securities and Markets Authority (ESMA).

• Before the adoption of ACER’s investigation report, the investigated persons have a right to comment on facts concerning them. This is a considerable difference compared to the right of the entities subject to a Commission’s antitrust investigations to comment on the Commission’s objections. It reflects the fact that enforcement measures for REMIT breaches are left to the NRAs.

• For each day of non-compliance with an on-site inspection or a request for information, ACER can impose periodic penalty payments up to: 2% of the average daily income of the preceding calendar year for natural persons; and 3% of the average daily turnover of the preceding business year for legal persons. This is also a considerable difference, as the Commission cannot impose penalty payments to natural persons, but has a higher threshold for penalty payments for legal persons (5%).

• Unlike the Commission, ACER does not have a power to impose fines for procedural breaches relating to the non-compliance with its inspections and requests for information, this power being left to the NRAs.

“Conditional” investigatory powers

The extent of ACER’s investigatory powers is broad. However, the distribution of powers foreseen by REMIT II puts some constrains on ACER’s investigations.

ACER will investigate cross-border cases of potential REMIT breach either on its own initiative (when the jurisdictional criteria set in REMIT II are met) or upon request from an NRA. In any event, ACER’s investigation will not automatically take precedence over the investigation of an NRA. On the contrary, the NRAs of the Member States where the possible REMIT breach has taken place can object to the investigation of the case by ACER.

The Agency needs to notify the relevant NRAs of its intention to open an investigation, and, within three months, each of the relevant NRAs can object. While the grounds for an NRA to object to an investigation from ACER are predetermined in REMIT II, they amount to a de facto veto power. An NRA can claim that it is investigating or open an investigation ‘on the same facts’, and thus stop ACER from investigating those facts in its jurisdiction.

Furthermore, ACER’s decision-making powers are limited to the imposition of periodic penalty payments for procedural breaches, while only NRAs have the power to adopt final decisions on whether a breach of REMIT has occurred. Therefore, even if not opposing to ACER’s investigation, the competent NRAs still need to assess ACER’s investigation report and decide whether to enforce it. NRAs are obliged to communicate their intended course of action to ACER and, where necessary, to the European Commission.

The governance architecture established in REMIT II confines the room for ACER’s investigatory powers to the willingness of NRAs not to pursue the case themselves, in a setting that continues to look more intergovernmental than communitarian.

What to expect in practice from REMIT II?

An accurate prediction of what to expect in practice from REMIT II is difficult to make. While setting the scene for a greater role for ACER, REMIT II left the concrete dynamics of the investigation of cross-border cases dependent on the NRAs’ willingness to forego control over such investigations.

The first practical consequence of REMIT II can however already be seen: ACER’s new organigramme includes a REMIT Investigations Department and the Agency is working at full steam to start delivering on its expanded mandate. From the 1st of January 2025 and on a rolling basis until 2027, the green capital of Slovenia will welcome a total of 25 EU officials who will have the exciting task to investigate, for the first time, market abuse in the wholesale energy markets at EU level.

Giuliana D’Andrea is a Policy Officer at the European Union Agency for the Cooperation of Energy Regulators (ACER). She holds a Master’s degree from the College of Europe in Bruges. Before joining ACER, she worked as Case Handler at the European Commission (DG Competition), and as a lawyer in an international law firm, specialising in EU Competition Law.

This article was written by the author in her personal capacity. The views expressed in this article are the author’s own and do not necessarily reflect the view of the European Union Agency for the Cooperation of Energy Regulators (ACER).

SUGGESTED CITATION: D´Andrea, G.; “REMIT II: new investigatory powers for the EU agency in Ljubljana to strengthen the fight against market abuse in the European energy markets”, EU Law Live, 20/05/2024, https://eulawlive.com/competition-corner/remit-ii-new-investigatory-powers-for-theeu-agency-in-ljubljana-to-strengthen-the-fight-against-market-abuse-in-the-european-energy-markets-by-giuliana-dandrea/

THE LONG READ

Integrated Decision-making in The EU and Judicial Review: Can The Puzzle be Fixed?

Daniel Sarmiento 1

I. Introduction

The European Union is shifting towards new forms of governance that change the way in which the EU and Member States have traditionally interacted and implemented EU policies together. This trend cannot be explained through the lens of a centralisation or a decentralision of institutions or policy. The new forms of governance involve a different approach in which hybrid governance structures emerge. The new mantra of EU governance is one of closely interconnected arrangements, a change in the model that turns both EU and Member State authorities into a single composite framework. From the European System of Central Banks and the Single Supervisory Mechanism to the European Data Protection Board, EU policy is expanding towards hybrid frameworks in which EU law and national law, as well as their authorities and staff, come together in highly interconnected ways with the aim of ensuring the effectiveness of EU policy.

The new forms of governance are altering the traditional approach toward EU decision-making and policy implementation, in which EU authorities acted at the supranational level, whilst national authorities enforced and made (mostly individual) decisions at the national level. A clear separation of tasks informed the definition of EU policy and its day-to-day activity, mostly leaving the regulatory responsibility to the EU, and the individual decision-making and the administrative enforcement to the Member States. Six decades of European integration were based on this model and, as a result, the interaction between both levels of governance was predefined by a clear separation of tasks.

The traditional approach is now under review, as a result of new EU policy areas that demand high degrees of interaction between the EU and national authorities.2 The Banking Union, the new Border and Coast Guard policy, the European Public Prosecutor’s Office, personal data protection, and other relevant areas of EU policy are altering the terms in which EU and Member States traditionally interacted through joint procedures. This change has an impact in other areas of EU law that are closely attached to policy implementation. One such area is judicial review and the conditions of access to Union and national courts to ensure an effective legal protection. This is no minor field, inasmuch it touches the very core of the values of the EU enshrined in Article 2 TEU, including the Rule of Law and the protection of fundamental rights.

1. Professor of EU Law (Complutense University of Madrid) and Editor-in-Chief of EU Law Live.

2. See, more broadly, see Brito Bastos, F., ‘Derivative Illegality in European Composite Administrative Procedures’, Common Market Law Review, vol. 55, nº 1, 2018.

This Long Read will explain how the new forms of governance, and in particular those that are characterised by what will be termed as ‘integrated decision-making’, demand from the Court of Justice a more unitary approach towards the division of labour between EU and national courts. In fact, it will be argued that such a development has already started, and it can be found in the first rulings delivered by the Court of Justice when addressing the jurisdictional implications of the new institutional arrangements. However, as it will be argued, some cracks are starting to appear in the unitary approach towards judicial review, and the overall picture that emerges is not as clear, nor as unitary, as it looked when the first judgments of the Court of Justice were delivered. In this Long Read, the benefits and inconveniences of the unitary approach will be analysed, to conclude that it is imperative that the Court of Justice provides a consistent and mostly centralised interpretation of the remedies enshrined in the Treaties, or otherwise the new forms of governance, with all their promise and potential, run the risk of turning into black holes of legal uncertainty and disprotection for citizens and undertakings.

II: A brave new world for EU governance: the multiple faces of integrated decision-making

The financial crisis of 2008 triggered a process of reforms in the EU that resulted in the creation of new areas and models of policy and governance, sufficiently ambitious and effective to avoid future crises and provide resilient institutional structures. Banking and finance were the main immediate targets of the reforms, which ensued in the creation of a ‘Banking Union’ and a new array of EU agencies and new powers for the EU Institutions, in particular for the European Central Bank. The reforms materialised, inter alia, through the shape of ‘Mechanisms’, novel governance structures in which EU institutions/bodies interacted jointly, in close coordination, with national authorities. In the case of the Single Supervisory Mechanism, the European Central Bank, acting as a prudential supervisor of significant credit institutions, assumed a variety of powers and tasks in joint procedures with national supervisory authorities.3 Something similar occurred with the Single Resolution Mechanism, whereby an EU agency undertook the task of monitoring credit institutions and, if necessary, using different tools in a scenario of resolution, in close coordination with the national resolution authorities and the endorsement of the Commission.4 New integrated procedures emerged in which a national authority proposed a measure to an EU Institution or to a composite body for final decision, or an EU Institution referred a matter to the national authority for further implementation. A broad array of integrated procedures emerged in which EU and national authorities interact closely, with the aim of giving prevalence to the overarching EU aims that inform the relevant field of policy.

At the same time, the digital economy has evolved to the point of developing new markets in areas unconceivable to date. The emergence of a market for personal data is one of the major developments of the digital economy, in

3. Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63-89).

4. Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 225, 30.7.2014, p. 1–90).

which big data, including personal data, has transformed the way in which international and national businesses are currently run. The EU’s efforts to create a uniform framework that provides equal protection to individuals’ privacy has turned into an ambitious regulatory landscape in which the General Data Protection Regulation (GDPR) stands out. This time around, the EU did not create a European agency with robust powers to enforce GDPR, it relied instead on national data protection authorities to provide the goods.5 To facilitate the effective enforcement of policy, the EU legislature introduced a one-stop-shop system, in which the national authority of the place of the main establishment of the undertaking assumes supervisory powers, in coordination with other national data protection authorities. In case the national authorities disagree, a European Data Protection Board arbitrates and solves disputes among authorities through soft or hard law mechanisms. In contrast with the model in the Banking Union, the GDPR model relies more closely on autonomous decisions of national authorities, individually or cooperatively, but eventually an EU decision is made when the Board is asked to step in. A similar pattern is now emerging in the newly enacted frameworks for crypo-assets6 and anti-money laundering,7 where national authorities participate in bodies that channel and condition the implementation of EU policy at the local level.

The European Public Prosecutor’s Office (EPPO) is another example of a novel institutional design, this time of a horizontal model of integrated decision-making. The protection of the EU’s budget and its own resources is enshrined in the Treaties, with obligations imposed on the Member States to procure its enforcement. The emergence of unprecedented finance programmes such as NextGeneration EU,8 together with the rise of authoritarian movements in some Member States undermining the role of independent watchdogs of public finances, reinforced the need for the EU to establish a specific body entrusted with the protection and, where appropriate, prosecution in court of conducts undermining the EU budget.9 The task was not simple, considering the vast landscape of potential cases to be handled in the territory of twenty-seven countries operating with twenty-seven different criminal court systems. As a result, the model relied on pre-existing national prosecutors, whose tasks were to be transformed and turned into European Prosecutors, incardinated in a complex institutional web in which the European Public Prosecutor sits at the apex. To put it bluntly, the EPPO turns national prosecutors into European prosecutors, creating a double bond that links the prosecutor with his/her national

5. Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/ EC (OJ L 119, 4.5.2016, p. 1–8).

6. Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets (OJ L 150, 9.6.2023, p. 40–205).

7. Proposal for a Regulation of the European Parliament and the Council establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (COM/2021/421 final).

8. NextGenerationEU is the sum of the Recovery and Resilience Facility, the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU), and additional funding for several other EU programmes in addition to the funding planned in the EU long-term budget 2021-2027, including Horizon Europe, InvestEU and the Just Transition Fund €10 bn), among others.

9. As a consequence, a framework on financial conditionality and the protection of the rule of law was introduced through Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433I, 22.12.2020, p. 1–10).

services of origin and their new European hierarchy. In any event, the competent courts to hear the cases brought by the European prosecutors are national criminal courts, with the ability to refer cases to the Court of Justice through preliminary references. The EPPO is a case of horizontal integrated decision-making, in which EU and national authorities decide within a coordinated structure that mostly rests on the cooperation among European prosecutors operating at the national level.

Finally, triangular integrated decision-making has made its appearance. A revealing example can be found in the case of the Single Resolution Mechanism. According to a long-standing case-law, the EU legislature cannot entrust discretional powers on EU agencies, a task that is to be exclusively held by EU Institutions.10 To comply with this requirement, the broad powers entrusted to the Single Resolution Board during a resolution process must be endorsed by the Commission.11 This might seem like a mere formalism, but during the resolution of a bank, in which time is of the essence, the delay of a decision in order to acquire the endorsement of the Commission can make the difference between the success or doom of the resolution procedure. The EU legislature was confronted with this dilemma and designed a governance structure in which the Commission is closely involved in the SRB’s tasks, allowing for speedy reaction and endorsement on the part of the Commission. At the end of the day, if a bank is to come under resolution the SRB and the Commission will be able to act efficiently and with no undue delay, including the involvement of national resolution authorities. In the case of a sale of business, the national resolution authority will enter a sale negotiation following instructions from the SRB, eventually agreeing a sale contract, whilst the guidance addressed from the SRB will rely on the endorsement of the Commission. In contrast with cases of vertical or horizontal joint decision-making, the Single Resolution Mechanism introduces triangular integrated decision-making procedures, in which two EU authorities act jointly and national authorities participate in the framework as well, uniting to provide a consistent resolution decision on an individual case.

III. Judicial Review of Joint Decision-Making

The new governance models have an immediate effect in the EU’s system of judicial review. How are Union courts to confront integrated decision-making between EU and national authorities, in a judicial system that traditionally divided the jurisdiction on the basis of the competence of each authority? The standard principle states that Union courts are entrusted with the review of validity of EU acts, whilst it is for national courts to review the validity of national acts.12 Some blurring has taken place in the course of time, but the division of tasks is quite well entrenched in the theory and practice of Union and national courts. So how will this division work when the EU and national authorities decide within an integrated framework in which decisions are made through an intricate web of decisions in which both authorities are equally involved?

10. See the judgments in the case of Meroni (9/56, EU:C:1958:7) and Romano (98/80, EU:C:1981:104).

11. See Article 18(7) of Regulation 806/2014, which states as follows: ‘Within 24 hours from the transmission of the resolution scheme by the Board, the Commission shall either endorse the resolution scheme, or object to it with regard to the discretionary aspects of the resolution scheme in the cases not covered in the third subparagraph of this paragraph.’

12. Oleificio Borelli v Commission (C-97/91, EU:C:1992:49), paragraphs 9 and 10.

The first opportunity for the Court of Justice to rule on the matter arrived within the context of the Single Supervisory Mechanism. In the case of Berlusconi,13 the Italian Consiglio di Stato questioned whether national courts could review a decision of Banca d’Italia rejecting an acquisition of a qualifying holding in a credit institution. This decision was the result of an integrated decision-making procedure in which Banca d’Italia referred the matter to the European Central Bank, acting as a Supervisory Council, and then left a subsequent non-discretional decision to the national supervisory authority. Whilst the traditional case-law of the Court of Justice pointed at a strict separation of tasks between EU and national authorities and left the final decision and review in the hands of national authorities and, consequently, of national courts,14 the Single Supervisory Framework was sufficiently novel and complex to justify a referral to the Luxembourg court.

In its judgment, the Court of Justice departed from the traditional stance and opted for a centralised approach towards judicial review of integrated decision-making procedures. It reached this solution by asserting the existence of an EU institution holding ‘exclusive decision making-power’. In such cases, the exclusivity of the EU’s competence translates into the exclusivity of EU courts to review the legality of EU acts ‘and examine any defects vitiating the preparatory acts or the proposals of the national authorities that would be such as to affect the validity of the final decision’.15 The wording of the judgment is categorical in this regard:

‘Where the EU legislature opts for an administrative procedure under which the national authorities adopt acts that are preparatory to a final decision of an EU institution which produces legal effects and is capable of adversely affecting a person, it seeks to establish between the EU institution and the national authorities a specific cooperation mechanism which is based on the exclusive decision-making power of the EU institution.’16

The only exception to this rule appears when the act adopted by the national authority ‘is a necessary stage of a procedure for adopting an EU act in which the EU institutions have only a limited or no discretion, so that the national act is binding on the EU institution’.17 In other words, when there is a clear separation of tasks whereby the EU cannot interfere in the decision-making process and outcome at the national level, and vice versa, such separation has an impact in the jurisdiction of the courts, attributing exclusive competence to Union and national courts to, respectively, review the legality of Union and national acts through separate proceedings.

In sum, the judgment in Berlusconi is a robust reaction to the emergence of integrated decision-making frameworks that introduces a system of ‘single judicial review’, to be conducted by Union courts alone. This ‘single judicial review’ shall take place once the EU institution or body brings the administrative procedure to an end, and as long

13. Berlusconi and Fininvest (C-219/17, EU:C:2018:1023).

14. Oleificio Borelli, cited above.

15. Berlusconi and Fininvest, cited above, at paragraph 44.

16. Berlusconi and Fininvest, cited above, at paragraph 48.

17. Berlusconi and Fininvest, cited above, at paragraph 45.

as the challenged decision is, “alone, capable of producing binding legal effects such as to affect the applicant’s interests by bringing about a distinct change in his legal position”. This final reference to the applicant’s interests introduces a link between matters of jurisdiction and matters of standing, a parallelism to which further reference will be made later.

The next development in the case-law arrived in the case of Iccrea Banca, 18 a preliminary reference revolving around the conditions of access to justice within the system of ex ante contributions to the Single Resolution Fund by credit institutions. Once again, the system is based on an integrated bundle of decisions, but operating in reverse to how they appeared in Berlusconi. Whilst in the latter case it was a non-binding decision of the national authority that was subsequently referred to an EU institution, the ex ante contributions framework was first triggered by the Single Resolution Board and then forwarded to the national authorities for service and enforcement. In line with the precedent laid down in Berlusconi, the Court of Justice focused on how the institutional arrangement was designed.19 It highlighted that the substantive decision on the ex ante contribution is made by the Single Resolution Board, whilst the task of the national resolution authorities is solely to notify and give effect to that decision. In such a context, the national authorities do not have the power to re-examine the calculations made by the Single Resolution Board.20 Consequently, the system of ‘single judicial review’ steps in, precluding any review by national courts of the EU’s decisions, a review that must be channeled through Union courts either through actions of annulment or a preliminary reference of validity.21

Berlusconi and Iccrea set the framework of vertical integrated decision-making procedures, characterised by the presence of an EU institution (the ECB) or an EU agency (the SRB) with binding decision-making powers that condition subsequent decisions by national authorities, but with the aim of preserving the prevalence of the overall EU objectives underlining the policy choices applied to the individual case. The system is integrated because there is a relevant role to play by the national authorities prior and following the EU’s intervention, but it is clear that the substantive decision is made at the EU level and the interests pursued are of a European scale, thus channeling any form of judicial control through a system of ‘single judicial review’ centralised in the Union courts.

Having reached this point, one can wonder what response should be given to other models of vertical integration in which the EU participates not through an EU Institution or agency, but through a more flexible or weaker structure such as a ‘body’ or an ‘office’, or through arrangements that issue non-binding decisions that, nevertheless, severely condition the action of national authorities. That is the case of the European Data Protection Board (‘EDPB’), a ‘body’ of the EU with legal personality, empowered to adopt non-binding opinions, but also binding decisions on national data protection authorities.

18. Iccrea Banca (C-414/18, EU:C:2019:574).

19. Ibidem, at paragraphs 44 and 45.

20. Ibidem, at paragraph 57.

21. Ibidem, at paragraph 58.

In a surprising turn of events, the General Court departed from the approach of the judgments in Berlusconi and Iccrea and opted for a decentralised system judicial review, in contrast with the ‘single judicial review’ espoused in the previously mentioned judgments. In the Whatsapp v. EDPB case,22 the General Court was confronted with a binding decision of the EDPB, followed by a final decision of the Irish supervisory authority implanting the findings of the EDPB. The decision of the EDPB was annexed to the final Irish decision, which was challenged in Irish courts. However, Whatsapp brough a separate action in Union courts through Article 263, fourth paragraph TFEU, questioning the validity of the EDPB’s decision. Reversing the legal reasoning of the Berlusconi and Iccrea judgments, the General Court focused preeminently on the standing of Whatsapp, rather than on the institutional arrangements governing the EU’s data protection policy. The General Court concluded that Whatsapp was not directly concerned by the EDPB’s decision, since it did not affect Whatsapp’s legal situation and, furthermore, it left discretion to its addressee (the Irish supervisory authority), in charge of implementing the contested decision.23 The outcome of this decision resulted in a split of the system of judicial review into two separate segments: one in Union courts for decisions that private parties have standing to challenge, and one in national courts, in which national decisions sit at the center stage and can collaterally allow a national court to refer the matter to the Court of Justice through a preliminary reference of validity. As it can be seen, the model emerging from the General Court’s Order is radically different from the one envisaged by the Court of Justice in Berlusconi and Iccrea.

Whilst vertical integrated frameworks put EU and national authorities operating through hierarchical arrangements, in which the EU holds the exclusive competence to rule on the main decisions at policy level, horizontal integrated frameworks work differently. Through the creation of hybrid arrangements, in which EU and national authorities turn into a single authority, the model is not based on a hierarchical integration of tasks, but on the fusion of both authorities into a single body. The paradigm of such a model is the European Public Prosecutor’s Office, through which national prosecutors are turned into European prosecutors holding specific European powers provided by Regulation 2017/1939,24 intervening in national courts with their European powers, in a framework in which Union and national law are both applied. This novel approach towards EU policy puts most of the pressure on national courts, inasmuch the decisions of the European prosecutors are mostly to have an impact in criminal proceedings which take place in national criminal courts. Therefore, the main concern of the EU legislature (and of the Court of Justice when having had the chance of interpreting the rules of the system) is not so much on creating a ‘single judicial review’, but to make sure that the different European prosecutors operating in their respective Member States work in a smooth and effective single framework subject to the instructions emanating from one European prosecutor in charge of an investigation, whose decisions are subject to the review by one national criminal court.

22. WhatsApp Ireland Ltd. v European Data Protection Board ( T-709/21, EU:T:2022:783).

23. Ibidem, at paragraphs 52 to 61.

24. Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (OJ L 283, 31.10.2017, p. 1–71).

In the first (and so far, only) judgment interpreting Regulation 2017/1939, the Court of Justice has reinforced the design of the model by confirming that the rationale of one European prosecutor and one national criminal court must translate into the mutual recognition of decisions taken by European prosecutors and national criminal courts in all the participating Member States. In the case of G.K., 25 in which powers of the ‘handling European prosecutor’ (in Germany) were being questioned in the courts of an ‘assisting European prosecutor’ (in Austria), the Court of Justice rejected an interpretation that would have granted the Austrian courts the power to review acts of the handling European prosecutor. A different outcome would have led to a system in which the acts of a European prosecutor, acting by its very nature in one Member State, would be subject to review in any, or in all, of the courts of the other participating Member States. According to the Court, the aim of the EU legislature was to establish ‘a mechanism ensuring a degree of efficiency of cross-border investigations conducted by the EPPO at least as high as that resulting from the application of the procedures laid down under the system of judicial cooperation in criminal matters between the Member States which is based on the principles of mutual trust and mutual recognition’.26 Such a mechanism is incompatible with an atomization of judicial review over the acts of the European prosecutors.

Finally, a scenario of triangular integrated decision-making emerges in contexts in which a plurality of EU institutions and agencies interact, together with national authorities, for the purpose of achieving a common policy decision. The paradigm of this model can be found, yet again, within the Single Resolution Mechanism, particularly in the context of resolution tools as applied to credit institutions. When choosing and putting into action a resolution tool, the Single Resolution Board (SRB) interacts closely with the national resolution authority, thus producing decisions from both authorities that will eventually result in the resolution decision. However, due to the restrictions imposed by the case-law of the Court of Justice on the delegation of discretional powers to EU agencies, the main decisions of the SRB must be endorsed by the European Commission. The outcome is a triangular decision in which the SRB, as endorsed by the Commission, issues a decision that is enforced by the national authorities in close cooperation with the latter. This arrangement has important consequences from the perspective of judicial review, as it has been seen in the recent case of Commission/SRB,27 whereby the Commission appealed the judgment of the General Court that ruled on an action brought by a shareholder of a bank put under resolution, for the fact that the defendant was the SRB only, and not the Commission. In the view of the Commission, the General Court indirectly ignored the Meroni case-law by recognising the standing of the SRB to be sued on an autonomous basis. This case is still pending in the Court of Justice, but Advocate General Ćapeta has already expressed her support to the Commission’s interpretation of the framework.28

25. G.K. (C-281/22, EU:C:2023:1018).

26. Ibidem, at paragraph 67.

27. Commission v SRB (C-551/22 P).

28. See the Opinion of AG Çapeta in Commission v SRB (C-551/22 P, EU:C:2023:846).

IV. A puzzle to be fixed, or a defective puzzle beyond repair?

The portrait thus far is one of new governance models in which the interactions between the EU and its Member States in the implementation of EU policy are being reshaped. At the decision-making level, Union and national authorities participate in an integrated system with the aim of boosting EU policy altogether. The institutional design of each policy field is left to the EU legislature, the outcome of which is a broad range of integrated models of decision-making, as explained in Section II. The EU legislature will thus choose, within its broad discretion, the model the best fits for the requirements and challenges of each policy area. However, when it comes to judicial review, the model is not subject to design by legislation, it relies on a fixed set of rules in the Treaties, the scope of which cannot be altered by the EU legislature. As a result, the ‘single judicial review’ to which the has Court of Justice referred to in its case-law is not the result of EU legislative law-making, but of the interpretation of the Treaties. On the one hand, the system of remedies under Union law cannot be left in the hands of the EU legislature, but, on the other hand, the Treaties cannot be blind to the diverse models of governance conceived by the EU legislature, adjusted to the specific needs of each policy field. This is the difficult balance that the Court of Justice has handled thus far, but with cracks expanding quickly.

The approach taken in the first decisions of the Court of Justice focused prioritised the effectiveness of the Union’s system of judicial review, thus allowing for a considerable degree of centralisation to take place in Union courts, to the detriment of national courts. When national authorities make a preparatory act or an implementing act that supports the main policy decision made by an EU institution, agency, office or body, the system of ‘single judicial review’ will require applicants to bring their cases in Union courts. This is the stance confirmed in Berlusconi and Iccrea in the field of Banking Union, expanded to situations of horizontal integration decision-making, as confirmed in the case of G.K. when reviewing the functioning of the European Public Prosecutor’s Office. This is a jurisdictional approach that puts the emphasis on the determination of the competent court, a decision that will drive applicants either towards national or Union courts. According to this case-law, it is the jurisdiction of Union courts to adjudicate on the policy decisions made by EU authorities and they shall be given preference visà-vis national courts. However, this approach sits uncomfortably with a parallel line of case-law emerging in the General Court, whereby integrated decision-making procedures should be viewed not from a jurisdictional angle, but from the perspective of standing and the interests of the applicant to bring an action. With this approach in mind, the General Court has rejected the direct concern of undertakings attempting to bring an action in Union courts to challenge a binding decision of the EDPB, thus forcing them to bring the action in national court. This line of reasoning is inconsistent with the Court of Justice’s findings in Iccrea Banca, in which an applicant faced an SRB decision followed by an implementing act by the national authorities, but nevertheless was drawn to bring an action in the Union courts in order to preserve the effectiveness of the system of ‘single judicial review’.

The cracks that are starting to emerge in the case-law can be justified by arguing that national courts can always refer a point of validity of Union acts to the Court of Justice through a preliminary reference. However, this line of

reasoning is problematic. First, national courts of first instance have no duty to refer a case through a preliminary reference, and even when there is, the current conditions for waiving such an obligation are extremely broad.29 Second, national courts cannot rule on the invalidity of a Union act, but they can rule on its validity.30 This means that, for the sake of expediency, national court may have an incentive not to refer the case to Court of Justice and declare the validity of the act, thus dismissing the action with no further consequence. Third, even if a preliminary reference of validity is made to the Court of Justice, the procedural guarantees and the status of the intervening parties are not the same as in a direct action in Union courts. While a direct action provides strict contradiction between the two parties and generous conditions of access to interveners, thus maximising the input of views for the Union court in solving the dispute, a preliminary reference of validity limits the stages of the written phase in which parties can participate (with stricter limits on the extension of written pleadings, limited at 20 pages), precludes any written reply to the submissions, and no interveners, besides the parties in the main proceedings, the Institutions and the Member States, are entitled to join the procedure in the Court of Justice. Finally, the degree of detail and expert input that the Union courts can receive through evidentiary material in a direct action is simply lost in a preliminary reference of validity, where access to evidence and expert opinions are restricted to the utmost. In sum, a ‘single judicial review’ comes severely undermined if it must rest, directly or indirectly, in the preliminary reference of validity.

However, it is true that the introduction of nuances and/or derogations to the centralised model of ‘single judicial review’ may have benefits. For example, relying on national courts in integrated decision-making procedures can be preferable when certain areas of policy rely heavily on national law. This is particularly the case when EU authorities are entrusted with the application of national law, an anomalous scenario that is becoming growingly frequent in some policy areas, such as the Banking Union, the EPPO or the European Border and Coast Guard policy.31 EU acts in which national law is applied can be subject to national judicial review when the national implementing measures are challenged in national courts. If the General Court’s approach in the Whatsapp case was to expand into other fields, leaving the matter to national courts can provide a more appropriate forum for the indirect review of EU acts that apply national law. In case the national court has serious doubts as to the correctness of the EU’s decision that applies national law, the national court is an appropriate interlocutor to refer the matter to the Court of Justice on a point of validity.

In any event, the cases in which EU authorities make use of national law in integrated decision-making procedures is still rare and confined to very specific situations. The reality of integrated procedures is that EU authorities make decisions of policy based solely or mostly on EU law, and they make individual decisions with individual addressees by implementing EU law only. At the present time, the system of ‘single judicial review’ only rarely sees cases of national law being implemented by EU authorities. Overall, keeping the center of jurisdictional

29. Consorzio Italian Management (C-561/19, EU:C:2021:291).

30. Foto-Frost (C-314/85, EU:C:1987:230), paragraph 17.

31. See Rosas, A., ‘EU Law and National Law: A Common Legal System’, Working Paper 2024/01, EUI.

gravity in the Union courts has important benefits for the proper functioning of EU policies and an effective legal protection. Thus, there are several arguments in support of this system that merit careful consideration.

First, by putting the onus of judicial review in Union courts, the focus is set on the effectiveness of the overall remedial response, and not so much on the individual affectation of the applicant. The approach in Berlusconi, Iccrea and G.K. is not so much centered on the individual position of the applicant, but on the consistency and effectiveness of the system of ‘single judicial review’ that the field of policy demands. This approach provides a more pragmatic and realistic conception of standing rules that departs from the traditional individual analysis towards access to justice, placing the center of gravity on the effectiveness of the system altogether. Second, redirecting the disputes towards Union courts also provides a more balanced and effective fore for litigants: both parties will have the opportunity to discuss in detail the full extent of the issues involved, without the constraints that restrain the action of national courts or of the preliminary reference procedure of validity. Union courts are also in a position to give a speedier response to the parties, a feature of special value when the contested decision concerns a point of law of a broad scope that may affect entire industries or business models. Speed and clarity in the interpretation of the law in such situations is of the essence in those situations.

The benefits of a centralised approach in cases of integrated decision-making are robust. The need to take them into account will grow as new policy areas drive into similar forms of integrated governance, as we are recently witnessing in the case of new institutional arrangements in the fields of crypto-assets or anti-money laundering. This tendency of integrated decision-making to expand into new areas of policy is not an exceptional event, but the normal result of EU and national authorities willing and more accustomed to work closely in tightly knit structures in which EU and national competence blend into a hybrid outcome, a hybrid in which EU goals prevail over national individual interests. It is therefore important that the ‘single judicial review’ enshrined in Berlusconi and Iccrea Banca remains as the main point of reference, and not a rule to be derogated from depending on each policy design choice. The alternative is to atomise the system of remedies into as many policy models the EU legislature decides to create, undermining the effectiveness of the EU legal order, its remedial framework and the hope of individuals and undertakings of relying in a consistent, stable and foreseeable system of judicial review in the EU.

HIGHLIGHT F THE WEEK S O

Commission Recommendation (EU) 2024/1344 of 13 May 2024 on auction design for renewable energy, published in OJ

Tuesday 21 May

Official publication was made of Commission Recommendation (EU) 2024/1344 of 13 May 2024 on auction design for renewable energy, which aligns with the Union’s goals of decarbonization, emphasising the significance of renewable energy in reducing greenhouse gas emissions, which account for over 75% of the Union’s total emissions.

Read on EU Law Live

Request for preliminary ruling concerning the interpretation of Article 85 GDPR, in the context of reconciling personal data protection with the freedom of expression

Tuesday 21 May

Official publication was made of a request for a preliminary ruling from the Attunda tingsrätt (Sweden), lodged on 13 March 2024, in case ND v Garrapatica AB: Garrapatica, concerning a dispute on whether Garrapatica AB, which runs the database Lexbase and publishes on it the personal details of persons who have been involved in criminal proceedings, is liable to pay damages for infringement of the GDPR and other regulatory provisions on the processing of personal data.

Read on EU Law Live

Preliminary ruling request concerning consumer protection in online payment advertising

Tuesday 21 May

The Bundesgerichtshof (Federal Court of Justice of Germany) requested a preliminary ruling from the Court of Justice of the European Union (CJEU) regarding the interpretation of Article 6(c) of Directive 2000/31/EC on electronic commerce. Read on EU Law Live

Court of Justice to rule on mandatory workplace vaccination for biological risk workers

Tuesday 21 May

The Riigikohus (Estonia) requested a preliminary ruling from the Court of Justice on 22 March 2024, concerning the case A and Others v Tallinna linn, the main question of which is whether employers can mandate vaccination for employees exposed to biological agents at work under EU law.

Read on EU Law Live

Preliminary ruling request on residence rights for Cameroonian mother of German child

Tuesday 21 May

The Verwaltungsgericht Düsseldorf in Germany requested a preliminary ruling from the Court of Justice regarding the case YC v Stadt Wuppertal, lodged on 16 February 2024, involving a Cameroonian national, challenging the Stadt Wuppertal’s decision to deny her a residence permit.

Read on EU Law Live

Court of Justice to clarify ownership and transfer of copyrights in commission contracts

Tuesday 21 May

Official publication was made of a case that involves a legal dispute between a Dutch designer (applicant) and a Belgian company, WEAREONE.WORLD BV (defendant), known for organising events like the Tomorrowland Festival.

Read on EU Law Live

Preliminary reference on compatibility with EU law of national legislation failing to extend social allowance benefits to foreign nationals holding a single residence permit

Tuesday 21 May

The official journal of the EU published a request for a preliminary ruling from the Italian Constitutional Court, lodged on 27 February 2024, in case Istituto nazionale della previdenza sociale (INPS) v V.M.: Luevi (C-151/24).

Read on EU Law Live

Preliminary ruling request on cross-border trademark infringement: Bundesgerichtshof Refers Tradeinn Case, published in OJ

Tuesday 21 May

On February 1, 2024, the Bundesgerichtshof (Federal Court of Justice of Germany) referred a preliminary ruling to the Court of Justice concerning the case of Tradeinn Retail Services S.L. v. PH, arising from a trademark dispute involving the Spanish company Tradeinn and the German trademark holder PH.

Read on EU Law Live

Court of Justice to clarify the notion of ‘technical regulation’ in the meaning of Directive (EU) 2015/1535 on provision of information in the field of technical regulations and of rules on Information Society services

Tuesday 21 May

Official publication was made of a request for a preliminary ruling from the Lietuvos vyriausiasis administracinis teismas (Lithuania), lodged on 15 February 2024: Unigames (C-120/24).

Read on EU Law Live

Nine regulations and a directive concerning the migration and asylum reform package, published in OJ

Wednesday 22 May

Official publication was made of several acts publishing the migration and asylum reform package.

Read on EU Law Live

2023 Council report on public access to documents, adopted by Council

Wednesday 22 May

On the 21st of May, the Council approved its 2023 report on public access to documents, highlighting trends in the implementation of Regulation 1049/2001 regarding public access to Council documents last year.

Read on EU Law Live

Council greenlights new gas and hydrogen market package

Wednesday 22 May

The Council adopted a regulation and a directive establishing common internal market rules for renewable and natural gases and hydrogen and reforming the existing EU gas legislation, the aim of which is to help make the shift to renewable and low-carbon gases in the energy system, to achieve the EU’s decarbonisation targets.

Read on EU Law Live

Council Decision (CFSP) 2024/1472 of 21 May 2024 on a European Union Diplomatic Academy, published in OJ

Wednesday 22 May

The Council of the European Union, referencing Article 28(1) of the Treaty on European Union, established the European Union Diplomatic Academy (EUDA), an initiative begun in 2021 when the European Parliament proposed a pilot project aimed at creating a European Diplomatic Academy.

Read on EU Law Live

Council gives final approval regarding the new Artificial Intelligence (AI) Act

Wednesday 22 May

The Council approved new rules aiming to harmonise existing rules on artificial intelligence, the so-called artificial intelligence act, the first of its kind in the world.

Read on EU Law Live

Council approves measures to safeguard elections from foreign interference

Wednesday 22 May

On May 21, 2024, the Council approved conclusions focused on strengthening democratic resilience and safeguarding electoral processes from foreign interference, a timely decision given the global elections in 2024, including those for the European Parliament.

Read on EU Law Live

Council empowers use of Russian asset profits to bolster Ukraine’s defense

Wednesday 22 May

In response to Russia’s ongoing aggression against Ukraine, the EU Council approved measures to utilize unexpected profits from immobilized Russian assets to support Ukraine’s military defense and reconstruction efforts.

Read on EU Law Live

Notice of anti-dumping proceedings on Chinese imports of lysine, published in OJ

Thursday 23 May

Official publication was made of a notice of initiation of an anti-dumping proceeding concerning imports of lysine originating in China.

Read on EU Law Live

Commission publishes recent achievements made in EU health policy

Thursday 23 May

On the 22nd of May, the Commission adopted its Communication on the European Health Union, which highlights the progress made in EU health policy over the past four years.

Read on EU Law Live

New judges appointed to the Court of Justice

Thursday 23 May

Member States’ representatives appointed Mr. Massimo Condinanzi and Ms. Ramona Frendo as judges to the Court of Justice.

Read on EU Law Live

ECtHR rejects Egyptian national’s challenge against French court’s refusal to investigate alleged torture complaint against Egyptian President Abdel Fattah al-Sisi

Thursday 23 May

In the case of M.M. v. France (application no. 13303/21), revolving around the refusal of French courts to investigate a criminal complaint lodged by the applicant, an Egyptian national, against Egyptian President Abdel Fattah al-Sisi for alleged torture and acts of barbarity during a visit to France in 2014, the European Court of Human Rights (ECtHR) unanimously declared the application inadmissible.

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ECtHR dismisses former First Deputy Prosecutor’s complaint against disciplinary proceedings in Amar v. France

Thursday 23 May

The European Court of Human Rights (ECtHR) ruled in the case of Amar v. France (application no. 4028/23), where Patrice Amar, a French national and former First Deputy Prosecutor at the National Public Prosecutor’s Office for Financial Offences, contested disciplinary proceedings initiated against him.

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Commission Infringement Package May 2024 published

Thursday 23 May

The European Commission made public its package of infringement decisions for the month of May, consisting of legal action undertaken against Member States for failing to comply with their obligations under EU law.

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Conclusions on the contribution of space to Europe’s competitiveness, adopted by Council

Thursday 23 May

The Council adopted conclusions on enhancing Europe’s competitiveness through space, emphasising the sector’s pivotal role in addressing the EU’s economic and social challenges and reinforcing its global standing.

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Vacant positions at the EU Agency for the Space program: Legal and Procurement Officer and Senior Legal and Procurement Officer

Thursday 23 May

On the 14th of May, the European Union Agency for the Space Programme (EUSPA) opened vacancies for two positions as a Legal and Procurement Officer and a Senior Legal and Procurement Officer at the department for the Space Programme.

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Directive (EU) 2024/1385 of the European Parliament and of the Council of 14 May 2024 on combating violence against women and domestic violence, published in OJ

Friday 24 May

Official publication was made of the Directive (EU) 2024/1385, which aims to combat violence against women and domestic violence within the EU.

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Commission Implementing Regulation making mobile access equipment imported from China subject to registration, published in OJ

Friday 24 May

Official publication was made of Commission Implementing Regulation (EU) 2024/1450 of 23 May 2024 making imports of mobile access equipment originating in the People’s Republic of China subject to registration.

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Official Journal of the EU: Commission notice of initiation of anti-dumping proceedings regarding imports of vanillin from China

Friday 24 May

The Official Journal of the EU has published a notice of initiation of an anti-dumping proceeding concerning imports of vanillin originating in the People’s Republic of China.

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Recommendation on enhancing research security, adopted by Council

Friday 24 May

The Council adopted a recommendation to enhance research security, primarily aimed at addressing risks associated with international cooperation.

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French aid scheme supporting the reduction of greenhouse gas emissions in the manufacturing sector, approved by Commission

Friday 24 May

The European Commission approved a €4 billion French scheme to support measures aiming at reducing greenhouse gas emissions in the manufacturing sector and help it transition towards a net-zero economy, in line with the Green Deal Industrial Plan.

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EDPB emphasizes control over biometric data in airport facial recognition

Friday 24 May

The European Data Protection Board (EDPB) has issued an Opinion on the use of facial recognition technologies by airport operators and airline companies to streamline passenger flows. This response, requested by the French Data Protection Authority, holds relevance across multiple EU Member States.

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