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: The judicial review of EU direct and indirect sanctions: the role of the Court of Justice

: The judicial review of national measures: derogations from EU law

The proportionality test developed by the Court of Justice requires a measure to be appropriate to the aim pursued, necessary to achieve it - meaning that no more desirable or less restrictive alternatives are reasonably available - and proportionate in a strict sense. From a general perspective, it has been argued that proportionality provides a sound basis for a judicial review of sanctioning measures, as it allows the Court to carry out, where appropriate, a detailed scrutiny. In fact, the review of national measures through the lens of proportionality' does not only cover the formal legality of a sanction, but also the merits of its adoption, substance and effects, both on the individual concerned and on the objectives pursued by EU law. This assessment covers all steps of the sanctioning cycle, as the "Member States are required to comply with the principle of proportionality not only as regards the determination of factors constituting an infringement and the determination of the rules concerning the

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severity of fines, but also as regards the assessment of the factors which may be taken into account in the fixing of a fine”.[1]

Against this background, the review of national measures differs, depending on whether the Member State concerned is implementing EU law or departing from it. In the latter case, the Court’s primary' concern is to avoid evasions of EU law, especially when a fundamental freedom is at stake. Two complementary situations must briefly be considered: reliance on a derogation codified in the Treaties or in secondary law and the exercise of national exclusive competences indirectly affecting EU law.

In the former situation, judicial scrutiny is mainly centred on the need to interpret formal derogations restrictively and to ensure that the domestic measure genuinely pursues an objective of public interest and is, in any event, compatible with the general principles of EU law, such as non-discrimination on grounds of nationality and, of course, proportionality. This approach sometimes leads the Court to cancel national provisions on criminalisation as they are incompatible with EU law, affecting fundamental freedoms. In other cases, the Court focuses directly on the compatibility of a national penalty. In particular, case law consistently holds that any penalty must represent a balanced reaction to a given wrongful conduct, also in terms of avoiding unnecessary restrictions to the rights and freedoms stemming from the EU legal order. In addition, sanctions must not be automatic and absolute in nature; instead, they must be imposed and determined in light of the specific circumstances of a case. Moreover, “the national authorities should not impose penalties for disregard of a provision which is incompatible with [EU] law”.

In the second situation, namely when the Member State does not rely on a derogation enshrined in primary or secondary legislation and instead invokes the legitimate exercise of its residual competences, a domestic measure could affect EU law. Even in such cases, however, longstanding case law clarifies that the Member

States must exercise their reserved powers in a manner that does not affect the general principles of the EU legal order. A particularly illustrative case in this respect is Wijsenbeek,[2] which involved a national provision requiring a person, whether or not an EU citizen, under threat of criminal penalties, to establish his nationality upon entering the territory of that Member State via an internal border of the Union. As Mr. Wijsenbeek’s refusal to comply with such a national law dated back to 1993, when the Community lacked common rules on controls at external borders and an immigration, visa and asylum policy, the Court held that, “as Community law stood at the time of the events”, the Treaty did not preclude the Member States from criminalising such conduct. At the same time, it is worth pointing out that the Court reiterated that the discretion entrusted to national authorities was dependent on the condition that “the penalties applicable [...] are not disproportionate, thus creating an obstacle to the free movement of persons”.

Domestic sanctions must not go beyond what is strictly necessary and must not be so disproportionate to the gravity of an infringement of national legislation as to become an obstacle to the exercise of a fundamental freedom. More generally, the (disproportionate) exercise of national ius puniendi cannot amount to hampering the full effectiveness of EU law and excessively restrict the individual rights stemming from the European legal order. This twofold systemic and individual dimension is well-depicted by the El Dridi case. Italy had failed to transpose Directive 2008/115/EC and the Court was asked if its Arts 15 and 16 precluded an Italian provision imposing a custodial sentence on illegally staying third country nationals, solely because of a failure to comply with an order to leave the national territory within a given period. On the premises that the national criminalising provision was per se lawful, the Court contended that the sentence of imprisonment was disproportionate to the aim pursued by the Italian authorities and that it was detrimental both to achieving the objective of an effective system of rapid returns and to the need to minimise the restriction of liberty of illegally-staying third country nationals.

Crucially, the less direct the link with EU law, the more delicate the case can be, not only because of the dilemma between achieving EU goals and the risk of an undue intrusion into the legitimate exercise of domestic sovereign competences, but primarily in terms of the fairness of the legal system as a whole and of the just application of a coercive measure to a person in an individual case. In fact, in both situations outlined above, the Court usually allows the individual to benefit from more lenient treatment, by tempering the severity of the sanctions at issue or even suggesting that the national authorities exclude them. This outcome could lead to reverse discrimination, depending on whether or not a given factual circumstance falls within - or has effects on - the scope of the branch of EU law under consideration, for instance, where a national sanction hampers the free movement of persons but also applies to third country nationals. It would then be for the national authorities to decide how to deal with this situation.

From the opposite perspective, it might be the case that a breach of EU law requires harsher sanctions than those applied to violations of national laws in a similar domain, on grounds of the requirement of effectiveness. The Court has already accepted that such a differentiated situation is compatible with EU law and, in particular, with the principle of equivalence, provided that the measure imposed by Union law is proportionate.[3]

  • [1] }7C-210/10, Marton Urban, para. 54. This is the only judgment in which the Court uses this description. Usually, case law refers to a more nuanced formula, which basically identifies the key components of the proportionality review of a sanction and leaves the door open for possible further assessment criteria: “In order to assess whether a penalty is consistent with the principle of proportionality, account must be taken of, inter alia, the nature and the degree of seriousness of the infringement which that penalty seeks to sanction, and of the means of establishing the amount of that penalty”. See C-712/17, EN.SA., ECLI:EU:C:2019:374, para. 40. 2 is M. Dougan, ‘From the Velvet Glove to the Iron Fist: Criminal Sanctions for the Enforcement of Union Law’, in M. Cremona (ed.), Compliance and Enforcement in EU Law (OUP, 2012) 74. 3 ” See, ex multis, C-360/04, Placanica, ECLI:EU:C:2006:71. 4 ■"’C-47/15, Affum, ECLI:EU:C:2016:408. 5 C-348/96, Calfa, ECLI:EU:C: 1999:6, paras 26-28. 6 8/77, Sagulo, ECLI:EU:C: 1977:131, para. 6. 7 A. Hinarejos, ‘Law and Order and Internal Security Provisions in the Area of Freedom, Security and Justice: Before and After Lisbon’, in C. Eckes, T. Konstadinides and T. Yorke (eds.), Crime Within the Area of Freedom, Security and Justice. A European Public Order (CUP 2011) 249.
  • [2] C-378/97, Wijsenbeek, ECLI:EU:C: 1999:439. 2 Ibidem, para. 45. 3 Ibidem, para. 44. 4 203/80, Casati, ECLI:EU:C:1981:261, para. 27. 5 C-61/11 PPU, ElDridi, ECLI:EU:C:2011:268. 6 Ibidem, para. 45. 7 Ibidem, paras 42-43 and 57-58. The Court primarily refers to the need to secure the effectiveness of the system of returns set up by the Directive. The individual dimension is a corollary to it, although the Court reiterates that the imposition of coercive measures on illegally staying third country nationals for the purposes of removal must not exceed the length of time strictly required for that purpose.
  • [3] C-432/05, Unibet, ECLI:EU:C:2007:163. 2 For the purposes of this Chapter, we focus only on the judicial review performed by the EU Courts. However, the national courts are often charged with determining whether or not a domestic sanction is proportionate, and the Court of Justice provides them with the criteria for developing such an assessment. See, for instance, C-487/14, Total Waste Recycling, ECLI:EU:C:2015:780, para. 55.
 
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