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: Substantive and procedural fundamental rights constraints in the sanctioning cycle: a mapping exercise

At present, the role of fundamental rights as constraints on the Union’s power to sanction mostly emerges, unsurprisingly, from the case law of the ECJ concerning sanctions for breaches of competition law, or restrictive measures adopted within the CFSP. However, rather than focus on specific fields or categories of sanctions, this chapter engages in a general mapping exercise of the fundamental rights that can act as general limits to the sanctioning power of the Union. In doing so, the Charter will be regarded as the main reference framework.[1] Moreover, the analysis considers three different expressions of the Union power to sanction, which are, however, logically and chronologically connected: the “shaping” of sanctions, their actual imposition and, ultimately, the judicial review on them. Attention is paid to the protected scope of the relevant fundamental rights, including the possibility to impose restrictions on their enjoyment.

: “Shaping” sanctions

The Charter acts as a constraint at the time when the EU institutions pre-determine the main features of a sanction, such as the addresses, the conditions of application, the content or amount, and the limits thereto.

In this respect, some important requirements flow from the principles of legality and proportionality of criminal offences and penalties, which constitute general principles of Union law and are now affirmed in Article 49 CFR. XThilst the powers of the Union in the field of criminal law are still rather limited, the abovementioned principles also apply to administrative sanctions that can be regarded as ‘criminal’ on the basis of substantive criteria, such as, for instance, some restrictive measures addressed to natural or legal persons in the fight against terrorism.

Article 49 CFR has codified the long-established rules of the non-retroactivity of criminal offences and criminal penalties {nullum crimen sine lege, nulla poena sine lege); in this respect, the provision corresponds with Article 7 ECHR, so that the rule of parallel interpretation established in Article 52(3) CFR applies. Drawing on the case law of the ECtHR, the ECJ has stated that Article 49 CFR encompasses the principle of nulla poena sine lege certa, which is ‘a specific expression of the general principle of legal certainty [implying] inter alia, that legislation must clearly define the offences and the penalties which they attract’; this requirement is met ‘where the individual concerned is in a position, on the basis of the wording of the relevant provision and, if necessary, with the help of the interpretation made by the courts, to know which acts or omissions will make him criminally liable’.[2] However, the principle of nulla poena sine lege certa does not preclude ‘the gradual clarification of rules of criminal liability by means of interpretations in the case-law’, provided that the following clarifications are ‘reasonably foreseeable’.

In line with the previous case law of the ECJ on the general principles of EU law, Article 49 CFR also enshrines the rule of the retroactivity of a more lenient criminal law, which is not expressly stated in Article 7 ECHR. In this respect, the protection provided by Union law is already more extensive than that granted by the (text of the) ECHR, which cannot be used to develop a parallel interpretation. Interestingly, the reverse process has occurred: the Strasbourg Court has interpreted Article 7 ECHR as encompassing also the guarantee of the retrospective application of a law providing for a more lenient penalty, supporting its reasoning also through an explicit reference to the formulation of Article 49 CFR.

Furthermore, different fundamental rights enshrined in the Charter may be relevant depending on the measure at issue. For instance, freezing orders or travel bans are likely to impinge on, inter alia, the right to respect for private and family life, the freedom to conduct a business, and the right to property, which are guaranteed, respectively, by Articles 7, 16, and 17 CFR. Whilst these fundamental rights are not unfettered prerogatives,[3] restrictions to their exercise must comply with the requirements laid down by Article 52(1) CFR: they must have a legal basis and prove necessary to pursue objectives of general interest recognised by the Union, or to protect competing rights or freedoms, without impinging on the essence of the right(s) at issue or constituting a disproportionate interference with it (or them).

According to the General Court, freezing orders and travel bans, given their temporary and precautionary nature, do not deprive their addressees of the rights to property or respect for private and family life, whereas objectives such as the fight against the threats to international peace and security posed by acts of terrorism and protection of civilian populations are ‘fundamental to the international community’. Moreover, in the Court’s view, a system of prior authorisation or the obligation to justify ex post how the funds were used would not be equally effective to achieve the goals pursued.

However, the abovementioned considerations concern (only) the abstract compatibility of the measures at issue with the requirements stated in Article 52(1) CFR. It is essential that the EU act allows sufficient space to ensure that the actual imposition of sanctions does not result into a disproportionate interference with fundamental rights. For instance, the ECJ has stressed the importance of including derogations from the freezing of assets for medical and humanitarian purposes or for access to legal services. When they process a request for a derogation, national authorities responsible for the execution of EU restrictive measures do not enjoy an absolute discretion; rather, they must act in compliance with the fundamental rights granted in the Charter. The Court found that those national authorities cannot rely on the potential for legal aid to be available as a valid reason for rejecting a request for the release of some frozen funds, which the person concerned wished to use to pay for a lawyer of their choosing when seeking to bring an annulment action against the freezing order before the General Court. This w'ould be contrary to Article 47(2) CFR, w'hich states that ‘[e]veryone shall have the possibility of being advised, defended and represented’; access to legal aid is a different entitlement, dealt with in Article 47(3) CFR, w'hich concerns ‘those w'ho lack sufficient resources’.

Furthermore, the principle of equality, now' also affirmed by Article 20 of the Charter, acts as a limit to the exercise of the Union exercising its pow'er to sanction. It requires that comparable situations must not be treated differently, and, in turn, different situations must not be treated in the same way unless there is an objective justification. An application can be found in competition cases, where the ECJ has often stated that the amount of fines must take into account the differences between the undertakings that have participated in an agreement or concerted practice contrary to Article 101(1) TFEU.[4] However, the principle of equality is a general limit, which applies regardless of the field concerned.

  • [1] For a similar analysis, mostly from the point of view of limits to EU law-related national sanctions, see P. De Hert, ‘EU criminal law and fundamental rights’, in V. Mitsilegas, M. Bergstrom, and T. Konstadinides (eds), Research Handbook on EU Criminal Law (Edwar Elgar Publishing, 2016) 105. 2 On proportionality, see the chapter by S. Montaldo within this Book.
  • [2] 2 u Rosneft, para. 167. 3 See the explanation of Article 49 CFR and the Court’s judgment in Joined Cases C-387/02, C-391/02 and C-403/02 (Grand Chamber), Berlusconi and Others, EU:C:2005:270, para. 68. 4 See the ECtHR’s judgment in Scoppola v. Italy (No 2), application no. 10249/03, para. 105. The Strasbourg Court found that the contrary position initially endorsed by the ECHR Commission should be overcome in light of important developments occurring under international and EU law, observing, inter alia, that ‘the wording of Article 49 of the Charter differs - and this can only be deliberate - from Article 7 [ECHR]’.
  • [3] See, for instance, Joined Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat International Foundation v. Council and Commission, paras 359-366; Case C-348/12 P, Council v. Manufacturing Support & Procurement Kala Naft, EU:C:2013:776, para. 121. 2 Case T-383/11, Makhlouf, EU:T:2013:431, paras 99-100. 3 Ibidem, para. 101. 4 Case C-314/2014, Peftiev and Others, EU:C:2014:1645, paras 24 to 26 and 29.
  • [4] See, for instance, Case C-604/13 P, Aloys F. Dornbracht v. Commission, EU:C:2017:45, paras 78-79. 2 Cf. Articles 11 and 17 of the European Ombudsman’s European Code of Good Administrative Behaviour. As regards impartiality, the ECJ has made clear that it has two distinct dimensions, subjective and objective: see, for instance, Case C-680/16, August Wolff and Remedia v. Commission, EU:C:2019:257, paras 24-28. 3 55 The European Ombudsman’s European Code of Good Administrative Behaviour could provide inspiration for an expansive interpretation: see P. Craig, ‘Article 41’, in S. Peers, T. Hervey, J, Kenner, A. Ward (eds), The EU Charter of Fundamental Rights: A Commentary (Hart, 2014), 1072. 4 See, for instance, Case C-383/13 PPU, G. andR., EU:C:2013:533, para 32.
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