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: Power to impose fees (and the not-always-unlimited jurisdiction of the Court of Justice of the EU)

The strongest examples of EU agencies’ involvement in sanctioning is provided only by very few bodies that are equipped with the power to impose the payment of fees and penalties.

At the current height of the agencification process, those powers are granted only to ESMA (for two purposes: controlling over-the-counter derivative contracts[1] and credit rating agencies) and to the Single Resolution Board (SRB, for the resolution of credit institutions). It bears noting that, in the latter case, the national authorities keep a general power to implement the SRB’s decisions (and, thence, also those including sanctions).’ Since no sanction has been issued yet, there is no practice to evaluate concretely the degree of involvement of national authorities. However, the room left for these latter bodies seems actually extremely scant and formal, as highlighted - albeit in general terms and with no specific reference to sanctions - by both the legal literature and the jurisprudence.

Each provision granting those direct sanctioning powers belongs to a specific legislative framework and has autonomous purposes and procedures; thence, they cannot be discussed here in detail.[2] However, a general remark deserves to be made.

Almost every time an EU agency is equipped with the power to impose or propose the imposition of penalty payments or fines, the Court is likewise endowed with an unlimited jurisdiction over those penalties, according to Article 261 TFEU and, thence, it can cancel, reduce or increase the amount to be paid. This happen with the sanctioning powers of ESMA, but also when EASA and EMA' request to the Commission to impose fines. As it is well known, this approach aims at enhancing judicial protection and is fully in line with the established practice in the field of competition, where Article 261 TFEU has been applied mostly, and also with regard to the European Central Bank’s sanctioning activity.

Against this framework, the fact that similar powers have not been granted to the Court with regard to the sanctions imposed by SRB comes out quite surprisingly and, perhaps, it is due to the fact that, in the legislative proposal issued by the Commission, sanctions had to be enacted by national authorities following an ‘instruction’ by the agency, thus falling under national jurisdiction.

This issue seems not to have attracted legal debates so far. By way of exception, Lamandini, Ramos and Solana implicitly argued that the general rules on sanctions by the ECB should also be applied with regards to the Single Supervisory Mechanism and to the Single Resolution Mechanism (i.e., the SRB’s domain).

However, while in the former case there is an explicit legal provision stating so,[3] in the latter case there is none. Thus, also according to those Authors, ‘the reference to full judicial review of all sanctions should be more explicit’. Whether the Court of Justice enjoys an unlimited jurisdiction over SRB penalties seems, therefore, a quite complex issue that is left open for discussion and deserves to be tackled. If, as it appears, the answer is negative, this would be a quite unjustified unicum in the field of EU agencies’ (and not only) sanctioning powers, that might require some legislative intervention to be amended. Indeed, the unlimited jurisdiction of the Court over penalties is one of the elements identified by a settled jurisprudence to withstand challenges in light of the principle of effective judicial protection.

Of course, the lack of such an unlimited jurisdiction does not mean per se that the Court is prevented from scrutinising the legality of SRB sanctions and that the SRB establishing regulation clashes with Article 47 of the Charter of Fundamental Rights of the EU. As demonstrated by the recent case law on the calculation of the ex ante contribution to the Single Resolution Fund, the Court could well control the decision of the SRB that sets the sum to be paid by each bank even if it does not have the power to increase or reduce the amount. Indeed, the Court can always partly or fully annul the decision and, therefore, ask the agency to calculate the payment according to the principles stated by the same Court.

However, the impossibility to substitute its own appraisal for that of the agency clearly makes the Court’s scrutiny weaker and, conversely, the agency’s independence stronger. The full respect of the principle of effective judicial protection will, therefore, be evaluated case-by-case; also in this case, the lack of any sanctioning practices hinders any further evaluation. From a general perspective, yet, one may wonder why such a deference is given only to SRB: as mentioned above, with regard to penalties imposed by the ECB, the Commission, or other agencies like ESMA, the Court enjoys an unlimited jurisdiction. This can hardly be explained because of some peculiarities of the former body. On the contrary, the fact that SRB - like any other EU agency -suffers a very scant recognition in primary law seems to call for a greater attention in holding this authority under control and, thus, in improving judicial protection. Indeed, the Court’s capability to review EU agencies’ acts has always been deemed as being a fundamental tool to enhance EU agencies’ legitimacy;[4] granting unlimited jurisdiction over penalties would clearly go in this direction.

  • [1] Articles 65-68 of the Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012, OJ 2012, L 201/1 (as subsequently amended). 2 Articles 36a and 36d of Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009, OJ 2009, L 302/1 (as subsequently amended). 3 Articles 38-41 of the Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014, OJ 2014, L 225/1. 4 75 Ivi, Article 29. 5 See Y. Herinckx, ‘Judicial Protection In The Single Resolution Mechanism’, in R. Houben, W. Vandenbruwaene (eds), The Single Resolution Mechanism (2017, Intersentia) 77, in particular paras 38-39. 6 The case regards the different issue of the ex ante calculation of the contribution to the Single Resolution Fund; see, however, paras 57-59 for some general statements concerning the (limited) impact of national implementation of the SRB decisions, that could well be applied also in the different field of sanctions.
  • [2] For an in-depth analysis of ESMA sanctioning powers see N. Moloney, The age of ESMA. Governing EU Financial Markets (2011, Hart) 260; for SRB, see P.E. Berger, D. Vanderstraeten, ‘The Single Resolution Mechanism. Institutional and Financing Arrangements for Bank Resolution in the European Banking Union’, in R. Houben, W. Vandenbruwaene (eds), The Single Resolution Mechanism (2017, Intersentia) 7-48. 2 Article 69 of the (EU) Regulation No 648/2012, supra, note 70, for OTC penalties; Article 36e of the Regulation (EC) No 1060/2009, supra, note 71, for credit rating agencies. 3 Article 84(5) EASA Regulation, supra note 53. 4 Article 84a(9) EMA Regulation, supra, note 48, and Article 136(10) of Regulation (EU) 2019/6 of the European Parliament and of the Council of 11 December 2018, OJ 2019, L 4/43. 5 See B. Vesterdorf, ‘The Court of Justice and Unlimited Jurisdiction: What does it mean in practice’ (2009) Global Competition Policy 2. 6 Article 5 of the Council Regulation (EC) No 2532/98 of 23 November 1998, OJ 1998, L 318/4 (as subsequently amended). 7 See Commission proposal COM (2013) 520 final of 10 July 2013, in particular Articles 36 and 37. 8 85 See, for instance, the interesting and detailed analysis by Y. Herinckx, Judicial Protection In The Single Resolution Mechanism’, in R. Houben, W. Vandenbruwaene (eds), The Single Resolution Mechanism (2017, Intersentia) 77. 9 M. Lamandini, D. Ramos, J. Solana, ‘The European Central Bank (ECB) Powers As A Cata
  • [3] Article 18(4)(7) of the Council Regulation (EU) No 1024/2013 of 15 October 2013, OJ 2013,L287/63. 2 M. Lamandini, D. Ramos, J. Solana, supra note 84,247. 3 Case C-272/09 P, KME Germany and others, ECLI:EU:C:2011:810, paras 91-106; C-386/10 P, Chalkor v. Commission, ECLI:EU:C:2011:815, paras 45-67; Case C-199/11, Otis, ECLI:EU:C:2012:684, paras 47-67. See also, on this point, K. Lenaerts, I. Maselis, K. Gutman, EU Procedural Law (2014, OUP) 622-631. 4 Ex multis, Case T-365/16, Portigon AG, ECLI:EU:T:2019:824. 5 On the possibility of an in-depth scrutiny of the Court over technical discretionary choices taken by agencies even without a formally unlimited jurisdiction, see E. Vos, ‘The European Court of Justice in the face of scientific uncertainty and complexity’, in M. Dawson, B. De Witte, E. Muir (eds), Judicial activism at the European Court of Justice (2013, Edward Elgar) 142.
  • [4] 50SeeJ. Alberti, supra note 3,301-315. 2 See, most recently, C. Tovo, supra, note 11, 417; M. Chamon, supra, note 11, 372.
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