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: The decision on sanction and its administrative review

The Governing Council and the Executive Board are the decision-making bodies of the ECB. Only the Governing Council and, by delegation, the Executive Board shall have the power to formally adopt legal acts with external effects, including decisions on sanction, irrespective of the field of competence where the infraction has been committed. In accordance with the principle of separation of the prudential supervisory function from the monetary policy function, the preparation and the adoption of a decision on a sanction follow different paths for prudential or monetary tasks. The same applies to the administrative review procedure.

The decision-making bodies of the ECB are not bound by the proposal submitted by the investigating unit and can exercise their own assessment about the completeness of the file, the commission of an infraction and the appropriateness of the sanction proposed. To consider first the procedure in monetary matters, Regulation (EC) No 2157/1999 lists the options open to the Executive Board, which may accordingly: [1]

  • - return the file to the investigating unit (or the competent NCB, as relevant) together with a reasoned request for additional information. Guarantees relating to the rights of the defence must be respected when the investigation phase is reopened;
  • - agree with the proposal submitted and adopt it;
  • - consider that the facts do not constitute sufficient evidence of an infringement and close the case;
  • - agree that an infringement occurred, but disagree with the sanction: it adopts a decision specifying the sanction that it considers appropriate;
  • - disagree with the analysis of the investigating unit and considers that a different infringement has been committed by the institution.

The procedure followed in supervisory matters differs inasmuch the file prepared by the investigating unit is examined by the supervisory board before being submitted for adoption to the Governing Council of the ECB. The options open to the Supervisory Board are the same than those open to the Executive Board in monetary matters. The draft decision shall be deemed adopted unless the Governing Council objects within ten working days or 48 hours in emergency situations. In the event of objections, the Supervisory Board is invited to submit an amended proposal for a decision. The NCAs shall be informed of the Governing Council’s objections. In the event of disagreement between them regarding the ECB’s objections, the case shall be referred to an internal ECB mediation committee. It shall deliver a written opinion which shall be forwarded to the Supervisory Board and the Governing Council. The Supervisory Board may take it into account when drawing up its proposal for a decision.

The undertaking concerned by a sanction has the right to request a review of the decision of the ECB within 30 days of its notification. In monetary matters, the decision of the Executive Board is to be reviewed by the Governing Council. The request for a review shall include all supporting informations and allegations. The Governing Council may request the undertaking, as well as the other relevant stakeholders (i.e. the Executive Board and/or the competent NCB) to provide additional information in order to review the decision of the Executive Board. In carrying out the review, the Governing Council may (i) confirm the decision of the Executive Board, (ii) amend the decision by modifying the amount of the sanction to be imposed and/or the grounds giving rise to an infringement; (iii) set aside the decision. In addition, if no decision has been taken by the Governing Council within two months of the request submitted by the undertaking concerned by the sanction, the decision of the Executive Board becomes final.[2]

In supervisory matters, the review process takes multiple steps. The request for administrative review of the Governing Council’s initial decision is examined by a dedicated internal ECB body established by the SSM Regulation, the Administrative Board of Review (‘ABoR’), prior to being forwarded to the Supervisory Board then to the Governing Council. The ABoR is in charge of assessing the admissibility of the request for review, examining the grounds relied on by the applicant and adopting an opinion on the initial decision of the Governing Council.150 The scope of ABoR’s review is limited to the relevant procedural and substantive conformity with the SSM Regulation. The opinion adopted by the ABoR shall propose whether the decision should be either abrogated, replaced with a decision of identical content or replaced with an amended one.151. On the basis of the ABoR’s opinion, the Supervisory Board shall prepare a new draft decision to the Council. Neither the ABoR’s opinion, neither the grounds invoked by the applicant are binding on the Supervisory Board. The new draft decision is submitted to the Governing Council and shall be deemed adopted unless the latter objects within a maximum of ten working days. At this stage, an objection by the Governing Council does not allow a new mediation.

The final decision of the ECB shall be notified to the undertaking concerned, to the relevant supervisory authority and to the national central bank of the Member

State where the infringement occurred. It shall inform the undertaking of its right of judicial review.[3] According to Article 299 TFEU, decisions of the ECB which impose pecuniary penalties are enforceable. The enforcement of the sanction against the undertaking concerned is suspended during the review of the initial decision. In supervisory matters, the suspension of the initial decision may be decided by the Governing Council, upon a proposal by the ABoR.

: Concluding remarks

Any administrative penalty adopted by the ECB which imposes a pecuniary obligation on persons (other than States) takes the form of a decision and, under Article 299 TFEU, shall be enforceable in the territory of the Member state where the addressee of the decision is established. The ECB decision shall be open to judicial review before the Court of justice, as well as national enforcement measures before national jurisdictions. It is worth mentioning that the ECB decision to impose a sanction is the final step of a complex procedure which usually involves national authorities in the preliminary or preparatory stages, such as the provision of information, the conduct of investigating measures or the submission of a proposal to the ECB. As the Advocate-General noted in his opinion in Case T-212/15 Berlusconi and Fininvest v Banca d’Italia, such procedures are not uncommon in EU law, but the use made of them within the BU is, by far, much more intensive and more frequent than in other EU policy fields. Whatever the field concerned, monetary or prudential, the ECB exercises, alone, the final decision-making power without being bound by the preparatory acts or the proposals of the national authorities. When deciding on the proposal submitted by a national authority in the monetary field or by the supervisory council in the supervisory field, the Governing Council and the Executive Board both have a large discretion. The judicial review of the ECB decision and the preparatory acts adopted by the national authorities shall be conducted only by the EU courts. Conversely, the sanctions imposed by a national authority on the request of the ECB are to be appealed against in the national courts. Since the entry into force of the SSM Regulation, only a few decisions of the ECB to impose sanction have been brought before the European Courts and three cases are still pending as of December 2019.[4] These actions are without any doubt the first of many to come, given the very high complexity of the legal regimes governing the ECB’s sanctioning power, and new developments are to be expected especially with regards to the respect of the EU Charter of fundamental rights.

  • [1] Article 7a Regulation (EC) 2157/1999. 2 Article 13e ECB RoP. 3 Article 27(8) and Article 25(5) SSMR 4 Article 10 Regulation (EU) No 673/2014 of the ECB of 2 June 2014 concerning the establishment of a Mediation Panel and its Rules of Procedure, OJ L 179/72, 19.6.2014. 5 Article 3(6) Regulation (EC) 2532/98; Article 24(5) SSMR.
  • [2] Article 3(8) Regulation (EC) No 2532/98. 2 For a detailed analysis, see C. Brescia, R. Smits, A. Magliari, ‘The Administrative Board of Review of the European Central Bank: Experience After 2 Years’ (2017) 18 European Business Organization Law Review 567. 3 1,0 Article 24 SSMR; Decision (2014/360/EU) of the ECB of 14 April 2014 concerning the establishment of an Administrative Board of Review and its Operating Rules, OJ L 175/47, 14.6.2014, as amended by Decision (EU) 2019/1378 of the ECB of 9 August 2019, OJ L 224/9, 28.8.2019. 4 Article 16 Decision 2014/360/EU. 5 Article 24(7) SSMR. For a detailed presentation, see ECB, SSM Supervisory Manual, supra note 46, 28. 6 Article 11(3) Regulation (EU) No 673/2014.
  • [3] Article 3(7) Regulation (EC) No 2532/98; Article 24(11) SSMR. 2 Article 3(8) Regulation (EC) No 2532/98; and in the supervisory field: Article 25(8) SSMR, Article 34 SSMFR, and Article 9 Decision 2014/360/EU. 3 Article 299 TFEU. 4 Article 7a Regulation (EC) No 2157/1999. 5 13s Opinion of AG Campos Sânchez-Bordona, case C-219/17, Berlusconi and Fininvest v Banca d’Italia, ECLI:EU:C:2018:502. 6 Case C-219/17, Berlusconi and Fininvest v. Banca d’Italia, ECLI:EU:C:2018:1023, paras 49-51. 7 Court of justice, judgment of 3 December 1992, Borelli, C-97/91, ECLI:EU:C:1992:491.
  • [4] Actions brought on 23 March 2018, case T-203/18, VQ v ECB; 18 July 2018, case T-451/18, Triantafyllopoulos e.a. v ECB; 25 September 2018, case T-576/18, Crédit agricole v ECB. 2 See Lazzerini in this volume.
 
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