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: EU Sanctioning Power and the Principle of Proportionality

Stefano Montaldo*

ABSTRACT: The chapter discusses the role that the principle of proportionality plays in shaping the EU power to impose sanctions. It addresses two main aspects, namely the direct imposition of sanctions by the EU institutions and bodies and the national authorities’ obligation to resort to sanctions as a means to enforce EU law. The analysis underscores that proportionality covers all phases of the sanctioning cycle, from the abstract pre-determination of a measure to its actual imposition, thereby requiring appropriate monitoring and remedies at the normative and judicial layers. Due to its inherent elu-siveness and to the many facets of EU sanctioning power, proportionality and its monitoring follow very different trajectories, depending on the domain at issue and the tasks of the European and national institutions involved. However, the analysis identifies some recurring features, which provide an illustration of the current magnitude of and constraints on EU sanctioning power.

KEYWORDS: sanction - proportionality - decision-making process - judicial review -implementation

SUMMARY: 7.1. Introduction: proportionality and sanctions in EU law. - 7.2. EU sanctions and proportionality: the normative layer. - 7.2.1. EU direct sanctions. - 7.2.2. EU indirect sanctions: the adoption of common standards concerning the duty incumbent upon the Member States to sanction breaches of Union law. - 7.3. The judicial review of EU direct and indirect sanctions: the role of the Court of Justice. - 7.3.1. The judicial review of national measures: derogations from EU law. - 7.3.2. The judicial review of national measures: implementation of EU law. - 7.3.3. The judicial review of EU sanctions. - 7.4. Conclusions.

: Introduction: proportionality and sanctions in EU law

In the legal context, proportionality reflects the idea underpinning liberal democracies that the individual should be protected from the excessive or unnecessary use of public powers.[1] As such, it calls for ex ante institutional and normative constraints, particularly through the accurate pre-determination of the boundaries of public authority. From a complementary perspective, proportionality also represents a ground for ex post judicial review of the outcome of any discretionary administrative or political decision-making process.

The underlying articulation of the proportionality test varies in structure and intensity from jurisdiction to jurisdiction, and also depends on the domain and the public and private interests at issue. In any case, the more intense a public power and its effects on individuals are, the more demanding this principle becomes. This is why proportionality is particularly significant in the domain of sanctions, where the magnitude of public coercive powers reaches its peak.

In this area, proportionality primarily questions the nature, level and effects of the exercise of ius puniendi. The immediately ensuing obligation is to “determine what justice requires”, meaning that any punishment should pursue a legitimate objective and be reasonably commensurate to the blameworthiness of an action, both in abstracto and in concreto.1 Again, the twofold dimension of proportionality, including both the normative layer and the subsequent judicial scrutiny, covers all phases of the sanctioning cycle, from the abstract pre-determination of a measure to its actual imposition.

EU law is not immune from these considerations. In the 1970s, the Court of Justice qualified proportionality as a general principle stemming from the rule of law,[2] requiring that individual freedom (of action) cannot be limited beyond what is necessary in the public interest. Since then, proportionality' has gradually developed from a supranational emanation of some domestic legal traditions - especially that of Germany - to a fully-fledged general principle of EU law encompassing any aspect of the Union’s action.1 Such an evolution has progressed in parallel with the attribution and subsequent strengthening of the then European Community’s direct sanctioning power. In the wake of the debate on the scope of the European repressive system, where EC ius puniendi was confined to a limited set of secondary law provisions, the Court took the clear stance that any such provision had to respect general principles governing the power to impose sanctions, with the principle of proportionality playing an overarching role.'

On this basis, the chapter aims to analyse how the principle of proportionality' influences the EU’s direct sanctioning power. To do so, it builds on the broad definition of the notion of sanction provided in the introduction.

In particular, the analysis focuses on how this general principle influences two complementary aspects of the sanctioning chain: the abstract imposition of a sanction and of its features at a normative and regulatory layer (Section 2), and the CJEU’s ex post judicial review of sanctioning measures on grounds of proportionality (Section 3).

In both cases, the analysis reflects the multi-layered structure of the EU legal order and the general rule according to which implementation and enforcement of EU law are traditionally - but not exhaustively and exclusively - entrusted to the domestic authorities. Decentralisation makes monitoring compliance with the principle of proportionality particularly pressing and multi-faceted. Centrally-steered EU patterns might raise proportionality concerns in themselves, but could also turn out to be problematic in light of their implementation and application by domestic authorities. Therefore, the chapter touches upon Union and domestic levels, and the related different trajectories of the principle of proportionality. The analysis of the normative dimension addresses some of the (soft) rules governing purely EU sanctions (Section 2.1.) and the duty incumbent upon national authorities to sanction violations of EU law by means of “effective, proportionate and dissuasive” measures (Section 2.2.). In a similar way, Section 3 focuses on the CJEU’s judicial review of national measures (Sections 3.1. and 3.2.) and of EU ones (Section 3.3.). Lastly, Section 4 provides some closing remarks on the main implications of the principle of proportionality in the EU sanctioning cycle.

As a final note, it is worth pointing out that the exercise of EU sanctioning powers is fragmented into the pieces of an extremely diversified puzzle. This chapter does not aim to provide a comprehensive analysis. Instead, it considers selected areas so as to highlight the core aspects of the role played by the principle of proportionality in shaping the Union’s ius puniendi.

  • [1] Associate Professor of EU Law, University of Turin. 2 A. Barak, Proportionality. Constitutional Rights and Their Limitations (CUP, 2012).
  • [2] ’Opinion of AG Jacobs, C-120/94, Commission v. Greece, ECLI:EU:C:1995:109. 2 M. Thoburn, ‘Proportionate sentencing and the rule of law’, in L. Zedner and J. Roberts (eds.), Principles and Values in Criminal Law and Criminal Justice (Oxford, 2012) 26. 3 ’4/73, Hold, ECLI:EU:C: 1974:51. 4 11/70, Internationale Handelsgesellschaft, ECLI:EU:C:1970:114. 5 See supra, p. XXX. 6 ' 122/78, Buitoni, ECLI:EU:C: 1979:43, para. 20.
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