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: Judicial review of sanctions

As stated by the ECJ, the EU ‘is a union based on the rule of law in which the acts of its institutions are subject to review of their compatibility with (...) the Treaties, the general principles of law and fundamental rights’.[1] At the same time, Article 47 CFR grants to ‘everyone whose rights and freedoms guaranteed by the law of the Union are violated’ the fundamental right to an effective judicial remedy and to a fair trial. This brings up the question of the role of Article 47 CFR in the EU judicial system. Focusing on EU acts that impose sanctions, Article 47 CFR sets the minimum standard for the effective judicial review of those acts; in addition, it can be relied upon to test some limits to the jurisdiction of the EU Courts as foreseen by the Treaties.

As regards the first function, three aspects of Article 47 CFR are worthy of attention. First, as with Article 41 CFR, this provision enshrines a set of guarantees, concerning: the right to an effective remedy before a court, fair trial rights, and access to legal aid for those who lack sufficient resources. Second, as the Explanations point out, Article 47 CFR reflects, at least in part, the content of Articles 6(1) and 13 ECHR (or the Strasbourg case law on legal aid). Article 52(3) CFR therefore applies. Thus, Article 47 CFR substantially incorporates into the EU legal order the protection offered by those ECHR provisions, which constitutes a minimum standard. However (and third), Article 47 CFR is framed in broader terms than Articles 6(1) and 13 ECHR, at least in two main respects: the remedy must be granted before a ‘court’ (whereas Article 13 ECHR refers to ‘a national authority’), and the protection guaranteed is not limited to civil and criminal proceedings (in contrast to Article 6(1) ECHR). The scope of Article 47 CFR rather covers all situations in which someone’s ‘rights and freedoms guaranteed by the law of the Union are violated’. Interestingly, the case law of the ECJ suggests that this condition is automatically met when a dispute concerns a matter regulated by EU law. It is submitted that a proper reading of the two interpretative rules provided by Article 52(3) CFR requires that the ECHR standard must be regarded as setting a minimum level of protection also in relation to the parts of Article 47 CFR that do not merely reflect Article 6(1) or Article 13 ECHR.

The ECJ has confirmed the compatibility with Article 47 CFR of the control that EU Courts can perform on the decisions of the Commission imposing fines for competition infringements (which consists of a combination of the review of legality of the decision under Article 263 TFEU and the unlimited jurisdiction to review the fine imposed).7' In doing this, the Court has taken the opportunity to substantiate that control, stressing that ‘whilst, in areas giving rise to complex economic assessments, the Commission has a margin of discretion (...), that does not mean that the [EU Courts] must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must those Courts establish, among other things, whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it’.[2]

In the field of the CFSP, the ECJ has relied on Article 47 CFR to shape the standard of judicial review that, after the Lisbon Treaty, EU Courts can exercise over decisions of the Council providing for restrictive measures against natural or legal persons, in accordance with Articles 24(1) TEU and 275(2) TFEU.

It derives from the Court’s case law that a person or entity included in a black list has locus standi to challenge its inclusion in that list, which is tantamount to an act of direct and individual concern to that person within the meaning of Article 263(4) TFEU. The applicant must be able to know the reasons on which the decision is based, possibly by requesting their disclosure. However, it is the task of the EU institution concerned to demonstrate that the decision challenged was grounded on a sufficiently solid factual basis. X7hilst there is no duty to produce all the information relating to the reasons allegedly substantiating the decision, the EU Courts must disregard any reasons which are not supported by sufficient evidence and must establish the probative value of the information provided, taking into account the observations submitted by the person concerned.[3] Furthermore, the ECJ has found that, after the removal of their name from the list, the person retains a legal interest in seeking the annulment of the Council decision under Article 263 TFEU, as a finding of the illegality of the act may constitute ‘a form of reparation for the non-material harm which [she] has suffered by reason of that illegality’.

The second function of Article 47 CFR concerns, as anticipated, its capacity to test the limits on the jurisdiction of the EU Courts as foreseen by the Treaties. According to the ECJ’s mantra, the Treaties provide for ‘a complete system of legal remedies and procedures designed to ensure judicial review of the legality of European Union acts’. Now, whilst it is undisputed that the Lisbon Treaty introduced some important novelties as regards the judicial protection of natural and legal entities vis-à-vis EU acts, there are still some gaps, also with respect to the judicial review of EU sanctions. The case law of the Court is clear in the sense that Article 47 CFR cannot be used ‘to change the system of judicial review laid down by the Treaties’, and particularly to neutralize the locus standi conditions of direct actions under Article 263 TFEU, or to confer jurisdiction on the EU Courts where the Treaties exclude it. At the same time, Article 47 CFR -more precisely, the underlying principle of ‘effective judicial review [which] is of the essence of the rule of law’, a founding value of the Union - implies that any limits to the jurisdiction of the EU Courts must be interpreted strictly.

So far this function of Article 47 is most evident in the field of the CFSP, where the jurisdiction of EU Courts is excluded entirely, with only some limited exceptions. One of these concerns, as anticipated, the ‘review of legality’ by Union courts of Council decisions providing for restrictive measures against natural or legal persons. Given that Article 275(2) TFEU refers to ‘proceedings (...) brought in accordance with the conditions laid down in [Article 263(4) TFEU]’, one could have argued that the only way to challenge the abovementioned measures is through an annulment action. Remarkably, the ECJ has also affirmed its jurisdiction to perform the ‘review of legality’ in the context of a preliminary ruling concerning the validity of the decisions at issue. In reaching this conclusion, the Court observed, inter alia, that ‘it would be contrary to (...) the principle of effective judicial protection to adopt a strict interpretation of the jurisdiction conferred on the Court by [Article 275(2) TFEU], to which reference is made by Article 24(1) TEU’.

The Court may follow a similar approach to affirm its jurisdiction to review, in the context of proceedings instituted by natural or legal persons, the sanctions that the Council is empowered to adopt under Article 7(3) TEU.

According to this provision, following a unanimous ‘determination’ by the European Council about the existence of a serious and persistent breach by a Member State of the EU values stated in Article 2 TEU, the Council, acting by a qualified majority, ‘may decide to suspend certain of the rights deriving from the application of the Treaties to the Member State in question’. Reference is made to the suspension of the voting rights of the representative of the government of the Member State concerned in the Council. However, this is only an example. The formulation of Article 7(3) TEU suggests that any rights deriving from the State’s membership of the Union may be suspended, though not all those rights. Moreover, it is stated that ‘the Council shall take into account the possible consequences of such a suspension on the rights and obligations of natural and legal persons’. In other words, Article 7(3) TEU acknowledges that the sanctions at issue, though being addressed to a Member State, may have an adverse impact on the legal sphere of natural and legal persons, including, possibly, their fundamental rights granted by the Charter.

Now, Article 269 TFEU states that ‘the Court of Justice shall have jurisdiction to decide on the legality of an act adopted by the European Council or by the Council pursuant to Article 7 [TEU] solely at the request of the Member State concerned by a determination of the European Council or of the Council and in respect solely of the procedural stipulations contained in that Article’. There seems to be space to argue that this limit concerns only the acts qualified as ‘determinations’ under Article 7 TEU, which do not encompass the decisions of the Council to suspend some membership rights. The latter would fall outside the scope of Article 269 TFEU so that the ‘ordinary’ jurisdiction of EU courts would extend to them.[4] A reasoning similar to that developed in the context of the CFSP would assist this conclusion. One would be tempted to say ‘time will tell’, yet in this case it seems better to hope that the issue remains a matter for academic speculation.

: Concluding remarks

The analysis developed in the previous sections has shown that, in the post-Lisbon era, the protection of fundamental rights is a major driving force for the evolution of the Union’s power to impose sanction. This relationship is both antagonistic and synergic, because the exercise of the Union’s power to sanction, which is always constrained by fundamental rights, can sometimes assist the enforcement of the latter.

As regards the role of fundamental rights as constraints, which was the main focus of the chapter, it is worth stressing the following main findings. First of all, the duty to respect fundamental rights is a limit inherent to any expressions of the Union’s power to impose sanction, in the relations with both the Member States and third States, regardless of the EU institution or body involved, or the field concerned. The fundamental rights acting as constraints are those granted in the Charter and those recognized as general principles of EU law, which overlap to a large extent with the former, but remain a formally distinct set of rules. This has some interesting implications. For instance, whilst the question of whether States or their emanations can invoke the Charter vis-à-vis the Union is still open, the Court of Justice has given a positive answer with respect to the general principles, notably those concerning procedural safeguards. The Charter, for its part, has created a ‘bridge’ with the ECHR and the relevant case-law of the Strasbourg Court, which therefore contribute - indirectly - to shaping the scope and limits of the constraints deriving from the Charter itself on the Union’s power to sanction. Moreover, the Charter can improve the possibility for individuals or legal entities to obtain effective judicial protection vis-à-vis the Union, either by shaping the standard for the review of EU sanctions or supporting a narrow interpretation of the Treaty provisions that excludes the jurisdiction of the Court of Justice on certain sanctions.

Even though this other dynamic was referred to only in passing in this chapter, it seems important to stress that the role of sanctions as a tool for the enforcement of fundamental rights should not be limited to situations where the Union’s values are severely endangered. The infringement procedure is an important instrument to pressure Member States to comply - fully, properly and in due time - with their obligations flowing from EU measures that give specific expression to fundamental rights granted in the Charter. In this respect, an attitude of 'zero tolerance’ by the Commission, in line with the commitment expressed by this institution in the aftermath of the entry into force of the Lisbon Treaty,[5] would be beneficial in the ‘daily practice’ of fundamental rights’ compliance, whilst adding to the legitimacy of a reaction of the Union against attacks to its founding values.

  • [1] ,4Case C-538/11 P (Grand Chamber), Inuit Tapiriit Kanatami and Others v. Parliament and Council, EU:C:2013:625, para 91. 2 See the explanations relating to Articles 47 and 52(3) CFR. 3 ,6D. Shelton, ‘Article 47’, in The EU Charter of Fundamental Rights: A Commentary, cit., 1211. The Author argues that ‘Article 47 has the same scope as Article 51 of the Charter’. This interpretation is coherent with Article 19(1) TEU, which requires the Member States to ‘provide remedies sufficient to ensure effective legal protection in the fields covered by Union law’. It must be noted, however, that in the most recent case law of the ECJ a process of decoupling is emerging between the scope of application of the Charter and the (broader)scope of the Member State’s duty under Article 19(1) TEU: see Case C-619/18 (Grand Chamber), Commission v. Poland (Indépendance de la Cour suprême), EU:C:2019:531, para. 50, and Case C-64/16 (Grand Chamber), Associaçâo Sindical dos Juizes Portugueses, EU:C:2018:117, para. 29.
  • [2] "See Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ 2003, L 1/1. Article 31 entrusts the Court of Justice ‘with unlimited jurisdiction to review decisions whereby the Commission has fixed a fine or periodic penalty payment. It may cancel, reduce or increase the fine or periodic penalty payment imposed’. See also Article 261 TFEU. 2 See, inter alia, Case C-272/09 P, KME Germany and Others v. Commission, EU:C:2011:810, para. 94. Questioning the impact on the standard of judicial review applied in previous cases, see R. Nazzini, Judicial Review after KME: An Even Stronger Case for the Reform That Will Never Be’ (2015) European Law Review 490. See also C-199/11 (Grand Chamber), Otis and Others, EU:C:2012:684, in which the Court found that the possibility for the Commission to act as a plaintiff in an action for damages for the loss caused to the European Union by a cartel is not incompatible per se with the principle of equality of arms. For a comment, see A. Andreangeli, 'Private but can it do so? Comments on Otis’ (2014) European Law Review 717. 3 See, inter alia, Case C-348/12 P, Council v. Manufacturing Support & Procurement Kala Naft, EU:C:2013:776, para. 50. 4 “Case C-584/10 P (Grand Chamber), Commission and Others v. Kadi (Kadi II), EU:C:2013:518, para. 100. 5 Ibidem, para. 119.
  • [3] Ibidem, paras 120 to 124. 2 85 Case C-239/12 P (Grand Chamber), Abdulrahim v. Council and Commission, EU:C:2013:331, para. 72. 3 The ECJ has reiterated this expression on numerous occasions since its seminal judgment in Case 294/83, Les Verts v. Parliament, EU:C: 1986:166, para. 23. 4 Inuit Tapiriit Kanatami, cit., paras 97-98. 5 16 Rosneft, cit., para. 74. 6 Ibidem, paras 73-74. 7 ^Ibidem, para. 75. For a comment, see S. Poli, 'The Common Foreign Security Policy after
  • [4] Rosneft'. Still imperfect but gradually subject to the rule of law' (2017) Common Market Law Review 54, 1799. The same approach was endorsed by the Court in relation to other aspects of its limited jurisdiction in the field of the CFSP: see, notably, Case C-658/11 (Grand Chamber), Parliament v. Council, EU:C:2014:2025, para. 70, Case C-439/13 P, Elitaliana v. Eulex Kosovo, EU:C:2015:753, para. 42, and Case C-455/14 P (Grand Chamber), H v. Council and Commission, EU:C:2016:569, para. 40. For a comprehensive appraisal, see M. Cremona, ‘«Effective judicial review is of the essence of the rule of law»: Challenging Common Foreign and Security Policy measures before the Court of Justice’ (2017) 2 European Papers 671. 2 See B. Nascimbene, ‘La violation grave des obligations découlant du Traité UE. Les limites de l’application de 1’art. 7’, in Liber Amicorum Antonio Tizzano. De la Cour CECA à la Cour de I’Union: le long parcours de la justice européenne (Giappichelli, 2018), 679.
  • [5] Commission communication (COM(2010) 573 final) - Strategy for the effective implementation of the EU’s Charter of Fundamental Rights, 10.
 
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