By Andrea Carta and Laurens Ankersmit
A few months ago, AG Wathelet delivered a remarkable defence of investor-state dispute settlement (ISDS) in international investment agreements between Member States in his Opinion in C-284/16 Achmea. The case concerned a preliminary reference by a German court (the Federal Court of Justice, or Bundesgerichtshof) regarding the enforcement of an award rendered by an ISDS tribunal under the Dutch-Slovak bilateral investment treaty (BIT). This monetary award against the Slovak government was the result of the partial reversal of the privatisation of the Slovak health care system. The Opinion is the latest development in the legal controversies surrounding ISDS and EU law after the Micula cases and, of course, the recent Request for an Opinion by Belgium (Opinion 1/17) on the compatibility of CETA with the EU Treaties. Although many aspects of this Opinion merit critical commentary, this post will focus on two issues:
- the question whether ISDS tribunals set up under intra-EU BITs should be seen as courts common to the Member States and are therefore fully part of the EU’s judicial system.
- whether the discrimatory access to ISDS in the Dutch-Slovak BIT is compatible with Article 18 TFEU and justified under EU internal market law. Continue reading
By Michał Krajewski
To err is human and so it is with judges, even the highest ones. Take the long awaited ECJ’s judgment in case C-42/17, M.A.S. & M.B. (Taricco II). This is already a second ruling on the Italian statutes of limitation applicable to pending criminal proceedings regarding VAT fraud. The statutes of limitations turned out too short for the Italian justice system, facing workload and efficiency problems. As a result, a significant number of persons guilty of serious VAT fraud might go unpunished. This in turn would undermine the effective protection of the financial interests of the EU (Article 325 TFEU). Previously, in case C-105/14, Taricco I, the ECJ had obliged Italian criminal courts to disapply the statutes of limitations in VAT cases, in order to give full effect to Article 325 TFEU. However, following the firm opposition from the Italian Constitutional Court (the ‘ICC’), the ECJ revoked the said obligation in Taricco II.
In this blog post, I will point to ambiguities in the ECJ’s reasoning in Taricco II and to further problems that this ruling may generate. I will argue, however, that the shortcomings should not overshadow the generally positive conclusion that we may draw from the Taricco saga. In my view, this saga illustrates a positive side to the ‘conditional’ acceptance of EU law primacy by national constitutional courts as the latter provide checks and balances on the ECJ’s enormous judicial power. By threatening to disapply EU provisions, they can force the ECJ to seriously engage in a deliberative process, eventually leading to the correction of mistakes that the ECJ will surely commit from time to time. Continue reading
By Eduardo Gill-Pedro
In her recent entry on this blog, Prof. Capaldo criticised the judgment of the Court of Justice of the EU in Taricco II by arguing that there exists, in international law (or what the author calls ‘global law’), a fundamental human right to policies that criminalise tax fraud. According to the author, the Court presented in its judgment a false dichotomy between the need to ensure the effective application of EU law and the need to ensure the protection of constitutionally guaranteed rights of the accused. This is because the effective application of EU law also entails the protection of ‘social human rights’, presumably by the proper use of the taxes for public expenditure. In this blog entry I argue that Prof. Capaldo’s argument presupposes a particular understanding of human rights, and that this understanding of human rights is problematic from the perspective of democratic theory.
The understanding of human rights as socially beneficially outcomes which are to be ensured through the proper expenditure of tax revenue, sees human rights as policy goals. Such policy goals are then to be optimized and balanced against other policy goals situated on the same level. This is made clear in the blog entry, which argued that there was a need to “balance[e] the rights under these articles [social rights which would be secured through tax collection] and the accused’s individual rights guaranteed by the legality principle”. Continue reading
by Giuliana Ziccardi Capaldo
This contribution is a comment to the blog posts of Maxime Lassalle on Taricco I and Michal Krajewski on Taricco II. In the following, I summarize some reflections developed in my article entitled “Lotta globale all’impunità e Corte di giustizia europea: un nuovo approccio alla frode fiscale come crimine contro i diritti umani”, that touch upon the core of the Taricco dispute between the European Court of Justice (ECJ) and the Italian Constitutional Court concerning the prosecution of value added tax (VAT) fraud.
Two very closely related issues are considered in this regard. One is that the ECJ’s view in Taricco I on the interpretation and application of the obligation to combat fraud, imposed on Member States by Article 325 TFUE, opens the way to a new approach to tax fraud as a crime against human rights. The second, logically connected, is that the alleged conflict between the interpretation of Article 325 TFEU given by the ECJ and Italian Constitutional law (the principle of legality in criminal matters as laid down by Article 25(2) Const.) is a false problem for which I present a solution. Continue reading
By Michal Krajewski
The final countdown to the announcement of the long awaited judgment in case C-42/17, M.A.S. & M.B. (Taricco II) on 5 December 2017 has begun. The preliminary reference (for an overview see Bassini and Pollicino), by which the Italian Constitutional Court (the ‘ICC’) challenged the judgment of the European Court of Justice (the ‘ECJ’) in C-105/14, Taricco I, has already generated a heated debate online (see for instance here and here). The most fascinating question is whether for the first time the ECJ will authorise a national court to disapply an EU legal provision to protect its national constitutional identity or higher national standards of fundamental rights’ protection. My aim in this post is to question the compatibility of Taricco I judgment with the EU law itself. I will first argue that the ECJ’s judgment in Taricco I is problematic under EU law because the ECJ left out from its reasoning the general principle of legal certainty and ensuing limits to the direct applicability of EU provisions. Second, I will explore whether the ECJ can still withdraw from its stance taken in Taricco I without opening the Pandora’s box of exceptions to the EU law primacy: either due to national constitutional identity (Article 4(2) TEU) or higher national standards of fundamental rights’ protection (Article 53 of the Charter of Fundamental Rights). Continue reading
By Mario García
In recent months, the Spanish Constitutional Court (SCC) has issued a series of decisions related to EU law that show an interesting combination of both openness toward the European legal order and a certain degree of apprehension to the growing role of the Court of Justice of the European Union (CJEU) in constitutional matters. In these cases the SCC has arrived at fairly pro-EU results: the SCC decided that preliminary references from Spanish courts to the CJEU take precedence over constitutional questions submitted to the SCC, and that a non-transposed, directly-effective EU Directive can be taken as a factor in the interpretation of a constitutional provision. But, as discussed below, the details subtly suggest that the SCC does not fully agree with the ways in which the CJEU has asserted its institutional position, and prefers to avoid potential conflicts in the future. Continue reading
By Oliver Garner
Introduction – A Timely History Lesson
On the 24th January 2017, 7 months to the day of the result of the UK’s referendum to leave the European Union, the President of the United Kingdom Supreme Court delivered the judgment in the Miller appeal. The Court held, by an 8-3 majority, that the UK Government did not have the power to give notice under Article 50 TEU to withdraw from the European Union without a prior Act of Parliament .
Lord Neuberger started the announcement in the manner of a history lecture, detailing the United Kingdom’s accession to the then European Economic Community in 1973. This was a fitting introduction to a judgment which at times reads like a lesson in the UK’s constitution. Accordingly, this lesson encompasses the place that EU law occupies within this order. This post will attempt to provide a concise summary of the magisterial judgment, before providing some comment on the salient issues relevant to EU law. Continue reading
by Szilárd Gáspár-Szilágyi
I. SETTING THE STAGE
In recent years ISDS has been on the lips of many politicians, academics, NGOs and even laymen, some of whom have recently ‘discovered’ that there is a mechanism through which foreign investors (often large multinationals, but not always) can bring claims against host-states before an international arbitral tribunal. The arguments in favour and against ISDS are plentiful, but one always catches my eyes. According to this argument (page 3), the EU does not need ISDS in its new free trade and investment agreements (FTIAs) with developed states, because the original rationale of this mechanism was to protect foreign investors from host‑state jurisdictions where basic tenets of the rule of law were not observed. However, trading partners such as the US or Canada have well‑functioning judicial systems that protect foreign investors; therefore, ISDS is not needed.
As a novice to the field of EU investment law, I must confess I am not yet fully convinced by the benefits of ISDS. Nevertheless, the afore-mentioned argument resonates with my previous field of research, concerned with the domestic enforcement of EU and US international agreements, and once again illustrates that there is often a disconnect between the international and the domestic enforcement of treaties.
I will not advocate for the ‘greater’ protection of foreign investors. Instead, I want to shed some critical light on the argument according to which foreign investors already enjoy high levels of protection in advanced domestic judicial systems. I will argue that the domestic protection of foreign investors is more complex. On the one hand, foreign investors can bring a claim before a domestic court against the host-state, invoking domestic standards of protection. On the other hand, they could also potentially bring a claim before the same domestic courts, relying on international standards of investment protection. As I will illustrate, the international and domestic levels of enforcement should not be treated as worlds apart and the interplay between the two can shape the strategies of the treaty negotiators and of the investors. Continue reading
By Laurens Ankersmit and Benedikt Pirker
Challenging EU rules on the basis of EU agreements is very difficult. Challenging EU rules on the basis of the Aarhus Convention is pretty much impossible. In ClientEarth v Commission the Court reasoned once again that the Aarhus Convention could not be relied upon to invalidate EU secondary legislation. In this case, the Court found that ClientEarth could not rely on the Aarhus Convention to challenge the Public Access to Documents Regulation (Regulation 1049/2001) in order to obtain commissioned studies on compliance by Member States with EU environmental law in the context of infringement procedures. One of the arguments put forward by the Court was that the Aarhus Convention could not be relied upon because it ‘was manifestly designed with the national legal orders in mind’. This is an extraordinary statement, since the EU is party to the Convention and thus bound by it. It was no doubt inspired by the concern to protect the infringement procedure contained in article 258 TFEU, raising a number of questions on the relationship between EU primary, secondary and international law. Continue reading
By Christopher Unseld
“Viking, Laval and Beyond”, edited by Mark Freedland and Jeremias Prassl, constitutes the first volume of Hart’s new series on “EU Law in the Member States”. In the series’ foreword Sacha Prechal lays out how crucial it is to understand the “genuine life of EU law in the Member States” since EU law – of course – is generally transposed, applied and enforced at the domestic level. But that is easier said than done. One needs good knowledge of EU law, domestic and comparative (EU) law to come close to some understanding of what Prechal calls EU law’s genuine life. And, let’s be honest, it is often hard enough to keep up with the current developments in EU law while not losing touch with domestic legal issues. Continue reading
By Benedikt Pirker
Should EU secondary legislation be reviewed against the benchmark of the provisions of an international agreement? In 2012 the General Court answered this question in the affirmative and annulled two decisions of the Commission which were based on a regulation which was deemed incompatible with the Aarhus Convention. However, the EU institutions appealed against those judgments. Consequently, in cases C‑401 to 403/12, Council e.a. v. Vereniging Milieudefensie and C-404 and 405/12, Council v. Stichting Natuur en Milieu e.a., the Grand Chamber of the Court was confronted with the same question. There is already quite some case law on the topic of review of legality within the EU legal order in light of international obligations of the EU, typically with the Court being hesitant to undertake such review. In the cases involving the Vereniging Milieudefensie and the Stichting Natuur en Milieu, the General Court and the Advocate General made, in my view, some valuable suggestions in favour of reviewing EU law against international agreements. Unfortunately, the Court decided to stick to its guns, thus continuing in the line of its own previous jurisprudence, and annulled the General Court’s judgments. The result leaves a somewhat sour taste for those who think that EU institutions and their legal acts should be amenable to judicial review under reasonable conditions. Not only is the very purpose of the EU regulation at issue to implement the obligations arising from the Aarhus Convention, but the Grand Chamber’s view also leads to a lacuna in legal protection in EU law exactly where the central aim of the Aarhus Convention would in theory be to provide individuals with access to justice. Continue reading
With the end of the third year of operation of the European Law Blog approaching, it is once again time to take a brief look back at the most popular posts of the year. Based on our Google Analytics statistics and keeping in mind that there is a certain bias in favour of older posts which have had more time to become popular, we receive the following little tour d’horizon of EU law… Continue reading
On 2 October 2013, the Committee of Ministers of the Council of Europe opened for signature Protocol no. 16 to the European Convention on Human Rights. This new Protocol, which has been referred to as the “Protocol of the dialogue” by Dean Spielmann, the President of the European Court of Human Rights (ECtHR), creates the possibility for supreme courts of the Contracting States to the Convention to request an advisory opinion from the ECtHR on “questions of principle relating to the interpretation or application of the rights and freedoms defined in the Convention or the protocols thereto”.
Even though the material scope of Protocol no. 16 is clearly confined to the Convention and its protocols, some concerns have been expressed in the recent past, notably at the recent hearing held by the ECJ on the draft agreement on EU Accession to the Convention (“DAA”), that the use of this new instrument of consultation by courts of the EU Member States might be problematic from the point of view of EU law. More specifically, the question was raised in this context whether Protocol no. 16 would not threaten the autonomy of EU law and the monopoly of the ECJ on the interpretation of EU law, by allowing supreme courts of the Member States to engage in a kind of “forum shopping” between the Luxembourg and Strasbourg courts. This contribution purports to demonstrate that those concerns are unjustified and should not be allowed to undermine the further development of the Convention system initiated by Protocol no. 16. Continue reading
By Mario García
On 13 February, the Spanish Constitutional Court (“SCC” or the “Court”) handed down its awaited judgment in the Melloni case (STC 26/2014). The case concerned the problematic issue of differing levels of protection of fundamental rights at national and European levels in relation to the execution of a European Arrest Warrant (“EAW”). This affair was the source of the SCC’s first-ever preliminary reference to the Court of Justice of the European Union (“CJEU”). Following the CJEU’s ruling last year (Melloni, Case C-399/11, 26 February 2013), which has already been covered in this blog by V. Franssen, the SCC has now agreed to lower the degree of protection afforded by the Spanish Constitution in line with EU law.
On Friday, February 7th, 2014, the German Federal Constitutional Court (BVerfG) requested the CJEU for preliminary ruling for the first time. The request is exceptional in terms of both European Union law and German constitutional law. Commentators call the decision a Spring in the Desert, a Golden Bridge to Luxembourg or simply put Historic. The BVerfG stated its opinion throughout several decisions regarding fundamental questions between the European Union and its Member States (e.g. Solange I, Solange II, Maastricht, Lisbon), but always abstained from requesting a preliminary ruling. This time, however, the BVerfG indeed submitted a question. The stakes in the case are high, as the BVerfG considers giving an ultra vires ruling regarding a decision by the Governing Council of the European Central Bank (ECB) concerning Outright Monetary Transactions (OMT) unless the CJEU announces that that decision is partially incompatible with primary law or restricts its scope. If the “conditions” laid out by the BVerfG are not met by the CJEU, the decision on OMT will be declared incompatible with the German constitution. The consequence would be that German authorities would not be bound to the decision by the ECB. In other words, the German central bank with around 18 % in capital subscriptions (shares) of the ECB would not participate in OMTs. Continue reading
Yesterday, the Court handed down its decision in the much anticipated Association de Médiation Sociale case. The case concerns the question of potential horizontal effect of the workers’ right to information and consultation enshrined in Article 27 of the Charter of Fundamental Rights and implemented through Directive 2002/14 establishing a framework for informing and consulting employees in the Union. We have already covered the opinion handed down by Advocate General Cruz Villalón (see here), who suggested that the Court should allow Article 27 of the Charter in combination with the Directive to be applicable and to exclude thus the application of the national norm that was contrary to EU law despite the setting of proceedings between private parties. In contrast to the Advocate General, the Court did not grant Article 27 and the Directive such effect. Rather, it decided to follow its previous case law, with the unfortunate consequence of leaving quite some questions unanswered. Continue reading
Bananas are back on the menu of the Court of Justice of the EU. The court of first instance of Brussels (Interim Decision of 17 May 2013, 196/33/13, in Dutch, not online) decided to refer a preliminary question to Luxembourg concerning the consistency of Council Regulation 1964/2005 regarding import tariffs for bananas with the EU’s obligations under the GATT. Soon the Court is to decide whether to address this question in a regular panel, or instead in a Grand Chamber. This decision itself will signal whether the Court considers this a fresh legal argument warranting scrupulous attention, or regards this simply as old, long-settled questions. In this post, I will argue that authoritative judicial clarifications would indeed be desirable in this case. Continue reading
Today’s decision by the Grand Chamber in C-617/10 Åkerberg Fransson is a landmark decision on the scope of the Charter of Fundamental Rights, EU constitutional law, and the relationship between national and EU law in general. As I explained in an earlier post, it was not clear, until today, whether the Charter had the same scope of fundamental rights protection as under the ‘old’ regime of fundamental rights protection ensured by the CJEU. The CJEU dealt with the issue head on stating that article 51 (1) of the Charter ‘confirms the Court’s case-law relating to the extent to which actions of the Member States must comply with the requirements flowing from the fundamental rights guaranteed in the legal order of the European Union’ (para. 18).
This Opinion of Advocate General Bot, given in response to a preliminary reference raised by the Spanish Tribunal Constitucional, gives interesting insights on the relation between national and EU fundamental rights standards, and gives an important interpretation on the ambiguous wording of Article 53 of the Charter on Fundamental Rights. AG Bot reaffirms the autonomous nature of the EU fundamental rights standard. He clearly rejects the idea that Article 53 entails that the Charter merely lays down a minimum standard of rights protection above which Member States would be free to apply a higher –national- standard of protection. However, he admits that a provision of secondary law may be challenged where it infringes national constitutional identity. Continue reading