Weekend Edition Nº60 by eulawlive

Nº60

MAY 29

2021

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DIANE FROMAGE

THE ECB’S GUIDE ON PECUNIARY PENALTIES IN BANKING SUPERVISION: INCREASED TRANSPARENCY ON ITS (STILL) LIMITED POWERS

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The ECB’s Guide on Pecuniary Penalties in Banking Supervision: Increased transparency on its (still) limited powers Diane Fromage

ECB’s decisions on the ground that they did not suﬃciently reason how the administrative sanctions imposed had been calculated. Indeed, the Court considered that the justi cation contained in the ECB’s decisions was not suﬃciently detailed, despite this being particularly necessary in view of the wide discretion le to the ECB in se ing the amount of the pecuniary penalties, and of their potentially high level as examined further below. Among other things, the Court speci cally considered that the absence of a publically available methodology for the calculation of the nes only made the threshold for the ECB to comply with its duty to justify its calculation higher.

1. Introduction On 2 March, the European Central Bank (ECB) published its Guide to the method of se ing administrative pecuniary penalties pursuant to Article 18(1) and (7) of Council Regulation (EU) No 1024/2013. is (voluntary) initiative is particularly welcome, as it contributes to enhancing transparency and allows credit institutions to have a be er idea of what to expect if they breach EU rules on prudential regulation (or, in the ECB’s words, it ‘ensure[s] the transparency and impartiality of the ECB’s decisions’). is is all the more welcome as the ECB’s sanctioning powers were subject to judicial review for the very rst time ever in July last year (Crédit Agricole v ECB (T-576/18), Crédit Agricole Corporate and Investment Bank v ECB (T-577/18), CA Consumer Finance v ECB (T-578/18) as discussed by Christy-Ann Petit in an Op-Ed, and VQ v ECB, T-203/18) (2). Although con rming the ECB’s interpretation of the applicable legal provisions and the breaches it had found in the rst three cases, the General Court partially annulled the

Against this background, the ECB’s decision to publish detailed information on the method of calculation of its administrative penalties appears to seek to remedy the shortcomings underlined by the Court, and thereby to prevent future judicial disputes. It is particularly remarkable as the ECB had argued before the Court that ‘l’absence, dans la décision a aquée, d’explicitation de la méthodologie perme ant

1. Marie Skłodowska-Curie Individual Fellow, Law School, Sciences Po Paris. e present research was conducted as part of ‘IMPACTEBU’, a project that has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 895841. 2. See on VQ v ECB: L. Wissink, ‘ e VQ case T-203/18: administrative penalties by the ECB under judicial scrutiny’ in C. Zilioli and K.-P. Wojcik (ed.), Judicial Review in the European Banking Union, Edward Elgar, 2021, 542-550. It is interesting to note though that the Administrative Board of Review (ABoR), an ECB internal body in charge of reviewing decisions adopted by the ECB Governing Council in supervisory ma ers, had examined decisions on administrative sanctions (incl. the one subject to the VQ case) prior to these decisions by the General Court (see for instance ECB Annual Report on supervisory activities 2018, p. 77).

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is Long Read is structured as follows. First, the ECB’s sanctioning powers are re-situated in the E(B)U’s supervisory regime (2). e next subsection examines the content of the ECB’s new Guide (3 ). e nal section concludes (4).

de déterminer le montant exact de la sanction avait pour but de préserver le caractère dissuasif de ladite sanction. Il conviendrait d’éviter que les établissements de crédit puissent prévoir le montant des sanctions pouvant être prononcées, ce qui pourrait réduire l’incitation au respect des réglementations prudentielles’ (CA Consumer Finance v ECB, paragraph 115). In summary, the ECB justi ed the absence of an in-depth explanation concerning the methodology it applied in calculating the ne by the fact that this would deter the ne’s dissuasive eﬀect as credit institutions’ incentive to comply with prudential requirements could be diminished. e strong wording of the General Court’s decisions apparently has since incentivised the ECB to change its stance on this ma er, and transparency, as well as the rights of credit institutions, have thus been improved.

2. Re-situating the ECB’s sanctioning powers in the E(B)U’s supervisory regime Since the establishment of the EBU in 2013, and the subsequent creation of the SSM, the ECB has been in charge of banking supervision in the EBU. It supervises larger credit institutions (Signi cant Institutions (SIs)) directly, whilst National Competent Authorities (NCAs) supervise smaller credit institutions (Less Signi cant Institutions (LSIs)), under the oversight of the ECB. Supervisory tasks have thus been conferred upon the ECB, and it has been a ributed all necessary powers to carry out these tasks, although some of these powers may be exercised indirectly through instructing NCAs that consequently adopt decisions to implement the ECB’s instructions. As a result of this, the ECB now has to follow up on respect of prudential requirements contained in both directly applicable EU law (the Capital Requirements Regulation (CRR)) and in national norms implementing an EU directive (the Capital Requirements Directive (CRD)).

However, as will be discussed in conclusion, it remains the case that the ECB’s sanctioning powers within the Single Supervisory Mechanism (SSM) are (still) potentially too circumscribed in any event and that it would perhaps be in order to reinforce them with a view to enhancing the eﬃciency of banking supervision within the European (Banking) Union (E(B)U), thereby contributing to the stronger resilience of the EU’s nancial sector.

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ted circumstances only: where an ECB decision or To ensure compliance with prudential requireregulation has been breached (either by a SI or a ments, the possibility to impose administrative peLSI); where a breach by a SI relates to a requirement nalties is foreseen in Article 18 SSM Regulation. contained in the directly applicable CRR; and wheBoth the ECB and NCAs may be called to impose re such a breach may be a ributed to a legal person administrative sanctions on supervised entities. and may be sanctioned by a pecuniary penalty. In is is so because, as was recently noted, ‘supervima ers concerning a SI, the ECB may nonetheless sory measures, administrative measures and admirequire that the NCAs open proceedings where nanistrative sanctions all aim at pursuing the objectitural persons are involved, where the requirement ves entrusted to supervisors (3)’. Articles 66(2) and breached is contained in national law transposing 67(2) CRD IV de ne minimum common rules in the CRD, or where it believes that non-pecuniary peimposing administrative measures and sanctions in nalties available in national legiscases of breaches of authorisalation should be imposed (Artition requirements and requirecle 18(5) SSM Regulation and ments for acquisition of qualife ECB's sanctioning Article 134 SSM Framework Reying holdings, and in all the cases enumerated in Article 67(1) powers in this domain gulation). As a consequence of this, and as appears very clearly CRD IV. are circumscribed to from the useful scheme contained in the blogpost previously As stated by a member of the Sulimited circumstances mentioned, even with regard to pervisory Board of the ECB SIs – which are supervised by the (Edouard Fernández-Bollo) and ECB directly – its powers to imthe Director General of SSM Gopose sanctions on them are limited as it is the NCAs vernance and Operations (Pedro Gustavo Teixeira) that remain in charge in most cases. NCAs may not in a very recent blogpost, start proceedings on their own initiative, but they may still present a request in this sense to the ECB. ‘[t]he allocation of sanctioning powers within the Hence, the ECB alone is in charge of the launching framework of the SSM is complex, as it depends of the procedure, but it is the NCAs that conduct on three diﬀerent elements: (i) the type of provithem independently, that is the ECB’s in uence sion breached (i.e. directly applicable law or natiostops a er the NCA has started to act as Article nal law implementing directives imposing pru18(5) SSM Regulation indeed provides that ‘the dential requirements); (ii) the persons responsible for the breach (i.e. legal persons or indiviECB may require national competent authorities to duals); and (iii) the type of penalty to be imposed open proceedings with a view to taking action in or(i.e. pecuniary or non-pecuniary).’ der to ensure that appropriate penalties are imposed’ (emphasis added) whilst Article 134(3) SSM Before considering in detail the kinds of penalties Framework Regulation – which details this procethe ECB may impose, it is worth emphasising that dure – reads ‘[a]n NCA of a participating Member its powers in this domain are circumscribed to limiState shall notify the ECB of the completion of a pe-

3. R. D’Ambrosio, ‘ Elgar, 2021, p. 317.

e legal review of SSM administrative sanctions’ in C. Zilioli and K.-P. Wojcik, Judicial review in the European Banking Union, Edward

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made available to competent authorities under the relevant Union law’. at is to say that the ECB will only be able to impose penalties where the requirement therefore was breached by a legal person and is contained in an EU regulation, those enshrined in EU directives remaining under the purview of NCAs as already mentioned. A maximum amount is also set by this article: it may not exceed ‘twice the amount of the pro ts gained or losses avoided because of the breach where those can be determined, or up to 10 % of the total annual turnover, as de ned in relevant Union law, of a legal person in the preceding business year or such other pecuniary penalties as may be provided for in relevant Union law’. Article 18(3) SSM Regulation further provides that ‘[t]he penalties applied shall be eﬀective, proportionate and dissuasive […and that i]n determining whether to impose a penalty and in determining the appropriate penalty, the ECB shall act in accordance with Article 9(2)’. No further details are contained as to how these penalties are supposed to be calcula-

nalty procedure initiated at the request of the ECB […]. In particular, the ECB shall be informed of the penalties imposed, if any’ (emphasis added) (4). Between 2017 and 2020, ten institutions were sanctioned by the ECB directly, whilst ten others were sanctioned by NCAs (ECB blogpost and ECB Annual reports on supervisory activities: all sanctioning decisions have to be published as per Article 18(6) SSM Regulation as detailed in Article 132 SSM Framework Regulation). e sanctions imposed by the ECB itself may be of two kinds: ‘administrative pecuniary penalties’ foreseen in Article 18(1) SSM Regulation and ‘ nes’ contained in Article 18(7) SSM Regulation. Administrative pecuniary penalties shall be imposed ‘where credit institutions, nancial holding companies, or mixed nancial holding companies, intentionally or negligently, breach a requirement under relevant directly applicable acts of Union law in relation to which administrative pecuniary penalties shall be

4. Interpretation supported for instance by S. Allegrezza and Olivier Voordeckers, ‘Investigative and sanctioning powers of the ECB in the framework of the Single Supervisory Mechanism’, Eucrim, 4, 2015, p. 157; and R. D’Ambrosio, ‘Due process and safeguards of the persons subject to SSM supervisory and sanctioning proceedings’ Quaderni di ricerca giuridica della consulenza legale, Banca d’Italia, 74, 2013, p. 49.

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as was also con rmed by the General Court. It addited by the ECB. Article 18(7) SSM Regulation additionally insists on the need to take ‘all relevant cirtionally sets out that ‘[w]ithout prejudice to paracumstances relating to the breach’ into account. To graphs 1 to 6, for the purposes of carrying out the this end, ‘the impact of the breach and […] the sutasks conferred on it by this Regulation, in case of a pervised entity’s misconduct [,…its] size […] and, breach of ECB regulations or decisions, the ECB whenever relevant in a given case, the bene ts derimay impose sanctions in accordance with Regulaved from the breach’ must be considered. tion (EC) No 2532/98’. As a consequence of the coexistence of the two kinds of penalties, the ECB’s poe ECB hence follows a two-step approach in dewers in this regard are governed by both the SSM Retermining the amount of the applicable pecuniary gulation ( Article 18(1)) and by the Council Regupenalty whereby a base amount is calculated rst, belation concerning the powers of the ECB to impose fore it is adjusted upwards or downwards if and as apsanctions (Article 18(7)) with the relationship to propriate. the Council Regulation being de ned in the SSM Framework Regulation (Title 1). Indeed, the possiTo calculate the base amount for the penalty, the sebility for the ECB to impose administrative sancverity of the breach is evaluated and classi ed as ‘mitions has existed since its creation as per Article 34.3 nor’, ‘moderately severe’, ‘severe’, ‘very severe’ or ‘exESCB Statute which also sets as a condition that the tremely severe’. e classi cation in one category or ECB acts within the limits de ned by the Council the other depends on the impact (that is, those contained in the of the breach and the degree of Council Regulation previously misconduct, which may be conmentioned which were amended e Guide provides rather sidered to be ‘low’, ‘medium’ or a er the ECB became the EU’s banking supervisor). detailed indications as to ‘high’. e Guide establishes how the nal outcome is determined the criteria that may be as, for example, two ‘low’ grades 3. Introducing the conwill lead to a ‘minor’ breach. e taken into account tent of the ECB’s Guide system provided is, however, not fully comprehensive and does In the Guide published on 2 not seem to imply that the classiMarch, the ECB details the twocation in one or the other category is automatic. step methodology for the calculation of pecuniary is is so because it refers to the fact that a breach penalties it already alluded to, and partially explai‘may’ be considered to belong to one category or the ned, in the framework of the procedures before the other thus implying that no classi cation is automaGeneral Court. tic or fully determined in advance. Moreover, the system proposed only foresees some of the possible Before se ing out those criteria though, it rst rescenarios and leaves undetermined what the nal calls the ‘wide margin of discretion’ it enjoys in de classi cation may be in all the other possible con ning pecuniary penalties as well as the fact that they gurations. should be ‘eﬀective, proportionate and dissuasive’,

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It is furthermore interesting to note that the Guide provides quite detailed indications as to the criteria that may be taken into account when conducting this assessment. ese include, for example, the ‘duration of the breach’ or the ‘actual and potential consequences of the breach on the reputation of and con dence in the banking sector’. Although the criteria de ned leave some margin to the ECB in their application, this is only in line with the ample margin of appreciation the General Court has recognised that it has, and is arguably also necessary to their proper application in individual cases.

ding on whether it is larger or smaller than the size in its group, respectively. Speci c provisions are included for the banks that belong to the smallest and the largest groups. Where the bene ts gained or the losses avoided may be calculated by the ECB, it ‘may’ – this points again to the freedom le to the ECB in its choice – also decide to set the penalty at a level that is equivalent to an increase of up to two-thirds of this amount depending on the severity of the breach. In any case, the penalty must be at least equal to the amount gained or saved, and it should be ‘proportionate, eﬀective and dissuasive’.

Once the severity of the breach has been assessed, the base amount is set. Two methods of calculation may be applied. If the breach is ‘extremely severe’, the penalty will be a percentage of the supervised entity’s annual turnover. e method of calculation of this percentage is speci ed too. By contrast, in all other cases, the base amount will be xed either based on a penalty grid in which supervised entities are divided in diﬀerent groups in accordance with their total amounts of assets or on the basis of the pro ts gained or the losses avoided. To ensure that the penalty imposed based on the grid remains proportional, the amount it contains is then adjusted taking account of the size of the average supervised entities in the group to which the ned entity belongs, and the average entity in the group above or below, depen-

A er the base amount has been calculated, it is then adjusted and may be increased or reduced depending on the existence of aggravating or mitigating circumstances. e list of mitigating circumstances contained in the Guide appears to be exhaustive while the aggravating circumstances named therein are simply quali ed as ‘examples’. If multiple breaches derive from the same set of facts, the ECB may also decide to adjust the amount of the penalty to ensure that proportionality is respected. e Guide sets the maximum amount of the penalty to 10% of the total annual turnover of the supervised entity in the preceding year, or to twice the amount of the pro ts gained or losses avoided thanks to the breach.

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4. Concluding remarks In light of the Final Considerations contained in the Guide, and of the uncertainty that remains in the application of the method it devises, it appears that some lack of clarity and foreseeability remains even a er the publication of the Guide. However, it undoubtedly provides a useful point of reference to the supervised entities, and at the same time will allow the ECB to provide less detailed justi cations of its decisions in the future.

ere is some leeway for the ECB to depart from strict application of the method of calculation

e Final Considerations of the Guide grant the ECB some leeway to depart from a strict application of the method of calculation devised. First, the nancial situation of the entity and the impact of the penalty thereon will be considered ‘in order to ensure that the penalty does not cause the supervised entity to become insolvent, cause it serious nancial distress or represent a disproportionate percentage of its total annual turnover’. Second, the possibility remains for the ECB to impose a symbolic administrative pecuniary penalty only. No details are given as to when this might occur; the justi cation for such a decision should only be contained in the relevant decision. ird, the possibility to generally depart from the established method still remains where ‘the particularities of a given case or the need to impose an eﬀective, proportionate and dissuasive penalty in a particular instance’ so justi es.

As already anticipated in the introduction, and even if this evolution is surely both positive and important in contributing to the stability of the E(B)U’s nancial sector, it remains the case that the impact of this advance is perhaps bound to be limited, and that a reform of the sanctioning regime in the area of banking supervision should potentially be considered altogether. It has even been argued in this regard that ‘[a]nother structural problem that plagues the SSM is the insuﬃciency of the ECB’s enforcement powers’ (5). Indeed, as shown in section 2, the circumstances under which the ECB may impose pecuniary penalties directly remain circumscribed to some of the instances in which breaches may occur only. Even if the ECB may demand that the responsible NCA opens a case, and even if it is the only one that can decide whether a procedure has to be started at all - which re ects its exclusive competence within the SSM, it still has no in uence on the outcome of the procedure conducted by the NCA. is outcome, as well as for example the level or the type of the sanctions imposed, will depend on the applicable national

5. M. Lehmann, Single Supervisory Mechanism without regulatory harmonisation? Introducing a European Banking Act and a ‘CRR light’ for smaller institutions, EBI Working paper series no. 3, 2017, p. 15.

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To remedy the discrepancy between division of responsibility in supervision and sanctioning, the ECB's involvement in NCA procedures could be enhanced, or full harmonisation could be fostered

the ECB has in imposing sanctions. Put diﬀerently, there appears to be a discrepancy between the division of responsibilities in supervising SIs and in sanctioning them if they fail to ful l their obligations adequately. is discrepancy is all the more likely to lead to diﬀerences (namely to hamper the establishment of the level playing eld among EBU Member States that the EBU seeks to establish) as rules, practice and culture may vary among Member States. To remedy this situation, the ECB’s in uence on, or at least its involvement in, the procedures conducted by the NCAs could be enhanced, which would not only correct the imbalance underlined previously, but also contribute to more homogeneity across the EBU. Alternatively, full harmonisation and thus direct applicability could be fostered by including at least some of the rules currently contained in the CRD in the CRR instead.

laws and the NCAs’ dedication in pursuing the case (6). In this regard, and even if this division of responsibilities between ECB and NCAs could not be avoided in as far as the ECB could, for example, hardly replace NCAs in the imposition of sanctions contained in national law only, there still appears to be a mismatch between this situation and the ECB’s exclusive competence in banking supervision. As is well known, to ful l its task, and because some of the rules in the area of prudential regulation are still contained in directives, the ECB has become the rst EU institution ever empowered to apply national law. NCAs admi edly continue to play a major role even in the supervision of SIs for which the ECB is directly responsible, not least by means of their participation in the Joint Supervisory Teams. However, this model of cooperation which develops under the ultimate responsibility of the ECB appears to be in stark contrast with the limited powers

6. M. R. Götz and T. H. Tröger note in this respect that ‘even with regard to signi cant banks under direct ECB supervision national fragmentation of sanctioning regimes survives within the SSM. e extent and preconditions for sanctioning some of the most relevant violations relating to business conduct, supply of nancial services etc. are le to the discretion of national regulators implementing art. 65 et seq. of CRD IV. Yet, since the promulgation of CRD IV, the manoeuvring space for Member States may not be that large in the end […]. e regulatory framework hence does not impede the evolution of uniform sanctioning practices also with regard to the magnitude of the penalties imposed by either the ECB or NCAs. However, a potentially momentous aw of the regime follows om the observation, that the power to initiate proceedings could prove rather ineﬀective in practice, because NCAs might not pursue cases with utmost dedication and vigour if they are not convinced on the merits and only follow ECB orders’ (emphasis added). M. R. Götz and T. H. Tröger, ‘Fines for misconduct in the banking sector: What is the situation in the EU?’, Scrutiny paper on the Single Supervisory Mechanism provided at the request of the Economic and Monetary Aﬀairs Commi ee of the European Parliament, PE 587.401, 2017, p. 11.

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News Highlights Week 24 to 28 May 2021

Ombudsman launches broad inquiry into Commission handling of staﬀ ‘revolving doors’ cases Monday 24 May

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e European Ombudsman launched a broad inquiry into the European Commission’s handling of so-called ‘revolving doors’ cases among its staﬀ, by which former EU public servants work in the private sector, in some cases in areas closely related to their prior areas of responsibility.

Commission approves modi cation of German support scheme for rail freight operators Monday 24 May

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e European Commission approved the modi cation of an existing German aid scheme that provides support to rail freight operators and reduces access charges to mitigate road congestion and CO2 emissions and reduce COVID-19 eﬀects on the rail freight sector.

Latest publications of the European Data Protection Board: on Cloud Codes of Conduct, the Data Governance Act, and Credit Card Data Monday 24 May

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e European Data Protection Board, at its 49th Plenary session, adopted two opinions on transnational Cloud Codes of Conduct for processors in the EU, a statement on the Data Governance Act, and recommendations on the legal basis for storage of credit card data.

EU leaders react to Ryanair ight’s forced landing in Belarus Monday 24 May

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e EU’s High Representative Borrell con rmed that a Ryanair ight was forced to land by a Belarusian military aircra in order to remove political opponent Mr Pratasevich. He called for an international investigation to determine any breach of international aviation rules.

Eurogroup’s May 2021 meeting: main takeaways Monday 24 May

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Main points of the Eurogroup’s 21 May meeting to discuss macroeconomic and scal developments, the functioning of adjustment mechanisms in the euro area and on activities and several operational aspects of the banking union.

European Labour Authority: Vacancy for temporary position for Data Protection and Legal Oﬃcer Monday 24 May

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Oﬃcial publication was made of a vacancy notice for the position of Data Protection and Legal Oﬃcer at the European Labour Authority in Bratislava, Slovakia.

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ECtHR’s Grand Chamber ruling in Big Brother Watch and Others: UK surveillance regimes partially contrary to human rights Tuesday 25 May

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e Grand Chamber of the European Court of Human Rights ruled unanimously in UK-surveillance regime cases Big Brother Watch and Others v. UK (applications nos. 58170/13, 62322/14 and 24960/15), that the UK violated Articles 8 and 10 ECHR in respect of the bulk intercept regime and obtaining communications data from communication service providers.

European Council conclusions on Russia and the UK Tuesday 25 May

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European Council calls for sanctions against Belarus and ight ban following forced landing of Ryanair jet Tuesday 25 May

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e European Council adopted conclusions in response to the Sunday 23 May incident involving an intra-EU ight operated by Ryanair while ying in Belarusian airspace. EU leaders called for additional sanctions against Belarus and other measures.

European Commission: Vacancy for positions for health and food safety administrator

e European Council reaﬃrmed its commitment to the ‘ ve principles’ governing the EU’s policy toward Russia, which include becoming more resilient to Russian threats although engaging with it selectively on a range of foreign-policy issues.

Tuesday 25 May

European Council’s conclusions on COVID-19 and climate change

Communications infrastructure and networks: Commission approves over 2 billion euro-German State aid package

Wednesday 26 May

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EU leaders gathered in Brussels for a second session of the 2425 May European Council meeting, discussing the COVID19 situation and climate change. EU leaders had the day before discussed the recent incident in Belarus as well as relations with Russia and the UK.

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Oﬃcial publication was made of a vacancy notice for the position of administrator with expertise in the elds of health and food safety in the European Commission’s DirectorateGeneral for Health and Food Safety.

Wednesday 26 May

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e European Commission approved, under EU State aid rules, a German aid scheme that would provide over 2 billion euros in grants to companies to support the se ing up of communications infrastructure in areas with only 2G networks and below.

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General Court dismisses interim relief seeking the suspension of ESA’s decisions excluding OHB System from Galileo transition satellites procurement contact Wednesday 26 May

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e President of the General Court issued an order in OHB v Commission (T-54/21R) dismissing an application for interim relief by German satellite company OHB, which sought the suspension of two decisions of the European Space Agency rejecting OHB’s tender oﬀer and excluding it from the procurement contract at issue.

Ombudsman closes inquiry on EIOPA a er it agrees to disclose information on its Board of Supervisors’s debates and votes on a dra RTS Wednesday 26 May

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e European Ombudsman closed an inquiry into the European Insurance and Occupational Pensions Authority concerning its refusal to disclose information relating to the voting results and related reasoning concerning its Board of Supervisors’ decision on a dra regulatory technical standard on packaged retail and insurance-based investment products.

Dra technical standards on own funds and eligible liabilities published by EBA

Commission con rms European Public Prosecutor’s Oﬃce will start operating on 1 June

Wednesday 26 May

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e European Banking Authority published a Final Report on its dra Regulatory Technical Standards (RTS) on own funds and eligible liabilities.

European Commission Vice President Jourová and Commissioner Reynders con rmed that the European Public Prosecutor’s Oﬃce will start operating on 1 June, following a decision adopted in the College of Commissioners.

Commission regrets Switzerland’s decision to end negotiations on the EUSwiss Institutional Framework Agreement

Council approves conclusions on Sustainable Blue Economy

Wednesday 26 May

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e Swiss Federal Council decided to end talks with the European Commission on the envisioned EU-Swiss Institutional Framework Agreement, referring to the existence of ‘substantial diﬀerences’ on key aspects of the agreement.

ursday 27 May

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e Council of the EU approved conclusions on a sustainable blue economy, a policy initiative seeking to align the priorities of the European Green Deal in the ocean and seaside economic sectors, as well as other policies such as the Farm to Fork Strategy.

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EU-Switzerland mutual recognition rules for medical devices cease to apply ursday 27 May

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Commission provides guidance on complaints mechanism under EU-UK Trade and Cooperation Agreement ursday 27 May

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e mutual recognition and related trade facilitating eﬀects rules for medical devices contained in the EU-Switzerland Mutual Recognition Agreement ceased to apply on 26 May, in connection with the entry into force (on the same date) of the new Medical Devices Regulation 2017/745.

e European Commission has published a notice with operating guidelines for the Single Entry Point and complaints mechanism for the enforcement of EU trade agreements and arrangements.

ECtHR and pensions of permanently resident non-citizens: Grand Chamber hearing in Savickis and Others v. Latvia

Conference on the Future of Europe’s inaugural plenary session to take place in June

ursday 27 May

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ursday 27 May

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e Grand Chamber of the European Court of Human Rights held a hearing in Savickis and Others v. Latvia (application no. 49270/11), a case concerning alleged discriminatory nature of Latvian rules applicable to the calculation of the State pensions of permanently resident non-citizens (compared with Latvian citizens).

e Executive Board of the Conference on the Future of Europe, composed of representatives of the Commission, the Council of the EU, and the European Parliament, approved the calendar of Plenary meetings and European Citizens’ Panels, with events starting next month.

Investigations into Amazon Web Services and Microso cloud services contracts: European Data Protection Supervisor

Council adopts Regulation to enhance security and background checks re visa applications

ursday 27 May

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e EDPS launched two investigations into: the use of cloud services under ‘Cloud II contracts’ provided by Amazon Web Services and Microso to EU institutions, bodies and agencies (EUIs); and the use of Microso Oﬃce 365 by the European Commission.

ursday 27 May

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e Council of the EU adopted its position at rst reading of a regulation amending the Visa Information System allowing Schengen States to exchange data, now pending adoption by the European Parliament, and which would strengthen security checks of the visa procedure.

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Data protection and privacy issues arising from ‘facial emotion recognition’: European Data Protection Supervisor ursday 27 May

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e European Data Protection Supervisor remarked on the speci c fundamental rights and data protection risks of using ‘facial emotion recognition’, due to its use of biometric data and AI technologies.

EU-Japan Summit: main takeaways Friday 28 May

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Key points of the EU-Japan Summit held on ursday, with an agenda ranging from the global response to COVID-19 and climate change to other bilateral and foreign policy issues.

Council adopts conclusions on future of tourism in Europe

EU sanctions concerning Syria: updates to the list and Notices published

Friday 28 May

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e Council of the EU adopted conclusions on ursday on the future of tourism in Europe for the next decade, se ing out a vision for an economically, environmentally and socially sustainable and resilient tourism sector.

e list of those who are subject to EU sanctions concerning Syria was updated through now published Council Implementing Regulation 2021/848 and Council CFSP Decision 2021/855 (which also extends sanctions until 1 June 2022).

Newly appointed chairperson at EIOPA

Continued collaboration between EU’s Community Plant Variety Oﬃce and Chinese Authorities

Friday 28 May

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e Council adopted a decision yesterday on the appointment of Ms Petra Hielkema as the chairperson of the European Insurance and Occupational Pensions Authority (EIOPA).

Friday 28 May

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A new ve-year Administrative Arrangement on intellectual property policies concerning plant variety rights, to replace the one for the period 2018-2020, was signed earlier this week by the Community Plant Variety Oﬃce (CPVO), the Ministry of Agricultural and Rural Aﬀairs of China (MA ), and the National Forestry and Grassland Administration of China (NFGA).

Nº60 · MAY, 29 2021

weekend

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Insights, Analyses & Op-Eds L.R: An Asylum Application made to Norway is not an ‘Application for International Protection’ under EU law

ou shalt not discriminate once again in EU public procurement law (Case C6/20)

by Janine Silga

by Piotr Bogdanowicz

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Analysis of the precise meaning of a ‘subsequent application’ in the Court of Justice’s L.R. (C-8/20)case, in which the Court took a pragmatic approach, but also came to a cautious solution that leaves gaps in the interpretation of EU law on tricky issues that is regre able.

Analysis of the Court of Justice’s case Sotsiaalministeerium (C6/20), the compatibility with Estonian law of the requirement in Directive 2004/18 on any economic operator wishing to take part in a public contract to prove its enrolment on one of the professional or trade registers or to provide a declaration on oath or a certi cate.

When does ‘existing aid’ become ‘new aid’ and does it always have to be notied? Some clari cations in the preliminary ruling: Azienda Sanitaria Provinciale di Catania

Legal Implications of the Ryanair incident in Belarus

by Małgorzata Cyndecka

by Trajan Shipley

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Insight into the legal framework applicable to the derailing of a Ryanair ight by Belarus so that it could arrest a political opponent under EU and international law, as well as the EU’s powers to respond and the wider implications for intra-EU ights travelling through a third State’s airspace.

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Analysis on determining the character of a given aid measure may raise doubts, and how the Court of Justice elaborated on that in Azienda Sanitaria Provinciale di Catania (C-128/19).

‘Co-regulation’ – Commission gets creative with regulatory compromise to tackle Disinformation by Anjum Shabbir

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Insight into Guidance on the Code of Practice on Disinformation that the European Commission published this week, which addresses criticism of its current self-regulatory nature, and which is a nudge towards an ad hoc form of ‘co-regulation’ through a suggestion to connect the Code to upcoming EU legislative instruments.

Nº60 · MAY, 29 2021

weekend

edition stay alert keep smart

Library - Book Review MICHAL BOBEK AND JEREMIAS ADAMS-P

By Yann Lorans

SSL (EDS.)

e EU Charter of Fundamental Rights in the Member States Review of a book that sheds light on the resonance of the new catalogue of EU Charter rights within national se ings through a ‘high-level and methodologically thorough piece of work’, and which should ‘serve as a beacon of realism for any researcher who might be over enthusiastic about the Charter and its contributions to the European constitutional space’.

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